a top industry magazine highlighting the "loophole'' that some US companies say gives Bermuda companies an unfair advantage over their American rivals.

The latest issue of Business Insurance carries a front-page lead article headlined "Bermuda tax status under fire''.

The in-depth article discusses the issues originally raised in the New York Times several weeks ago.

The article reported that four of the major US insurers had gone to congress crying unfair at tax exemptions available to companies set up in Bermuda.

Then US Congressional and administration officials raised concerns about the so-called tax loophole which the companies say allows insurance companies to avoid paying millions of dollars in federal taxes by relocating their firms offshore.

The Treasury Department also got its oar in and estimated that the government could lose up to $7 billion a year in tax revenue if all property and casualty insurers took advantage of the "loophole''.

The Business Insurance article by Gavin Souter in Washington said: "Lobbying efforts by four major US insures to eliminate alleged tax advantages held by Bermuda rivals are triggering congressional and regulatory concern.'' The article added: "Given the interest by Congress, legislation to change the tax code could be introduced and passed this year, some US insurer executives say. Any changes in tax treatment, however, are likely to be virulently opposed by Bermuda insurers and reinsurers that have US subsidiaries.

"Those companies say that the so-called "tax loophole'' should not be viewed in isolation and argue that when other issues, such as taxable ceding commissions and excise taxes, are factored in any advantage they might have is significantly reduced.'' The article also says that Bermuda companies have said that moves to penalise Bermuda-based reinsurers are protectionist and contrary to the spirit of free trade.

The four US insurers pushing for change are Chubb Corp, Hartford Financial Services Group Inc, Liberty Mutual Insurance Co and Kemper Insurance Co.

The New York Times has quoted prominent US Senators expressing concern about the "tax loophole'' that permits insurance companies to avoid federal taxes by moving to Bermuda or being acquired by a Bermuda company.

The Wall Street Journal has also been carrying stories on the tax status of Bermuda.

The articles describe in detail an offshore transaction in which a handful of insurance companies have avoided taxes on investment and underwriting income by reinsuring their business in a `tax haven' like Bermuda.

The Business Insurance also runs a commentary by the magazine's publisher and editorial director, Kathryn McIntryre, entitled "sour grapes sparks Bermuda outcry.''