fight off a possible threat to the economy by the US Congress.

On Wednesday night Congress introduced legislation which it hopes will close a so-called "tax loophole'' that allows offshore insurance companies to not pay US income tax.

The Bermuda International Business Association (BIBA) said the move was an attack not just on the insurance industry, but on Bermuda as a whole.

And Finance Minister Eugene Cox said last night that Government would take whatever steps were necessary to ensure the well- being of the insurance and reinsurance industry and to ensure the stability of the economy.

See Business, Page 19 Businesses condemn Congress BIBA described the bill, which was introduced to the House of Representatives on Wednesday night and effectively opens the battle between Bermuda-based insurers and reinsurers and their US competitors, as "protectionist''.

The legislation, which some say could be passed this year, appears to target companies like ACE and XL which have recently acquired US property and casualty insurers as well as a number of US reinsurers like PXRE and Everest Re which have moved to the Island.

The move comes after US insurers -- Chubb, Hartford, Kemper and Liberty Mutual -- went to Congress to get them to pass laws which will demolish the "tax shelter in Bermuda'' and close a "tax loophole'' they say will stop companies based in Bermuda -- but actually operating in the US -- to avoid paying certain taxes in America.

A BIBA spokesman said: "The legislation introduced in the US Congress by Johnson, Neal and Matsui, appears to be a protectionist measure, backed by some US insurers, which BIBA regards as an attack on our jurisdiction as a whole and not just the insurance industry here.''