ACE CEO Brian Duperreault said there was a world of difference between his company being incorporated in the Cayman Islands while its operations are in Bermuda compared to US companies that set up shell companies on the Island for tax reasons while leaving their operations in America.

Mr. Duperreault, who made a speech to Hamilton Rotarians last week denouncing the Island's policy of allowing companies to inverse their place of incorporation to Bermuda as a means of reducing their tax bill with Uncle Sam, has come in for some criticism over his company operating from the Island but having its place of incorporation in the Cayman Island.

In his speech Mr. Duperreault said Bermuda had 'lowered the bar' in taking in these types of companies, often referred to as corporate inversions: "Having fought so hard to earn the imprimatur of 'blue chip jurisdiction', it doesn't make sense to risk that hard-won reputation by allowing companies to invert here from the US without asking that they bring something more than the cost of incorporation to Bermuda."

The Island has been cast into a negative spotlight after a number of high-profile corporate inversions eyed up the Island as a means of cutting taxes. The moves have come in for heavy criticism from international media and American politicians who have gone so far as drafting legislation that if passed could deny federal contracts to Bermuda companies.

In recent days however callers to The Royal Gazette , who asked not to be identified, said it was ironic that Mr. Duperreault would take such a stance when his own company is incorporated in the Caymans but domiciled in Bermuda. There was also debate on Bermuda Web message boards citing the "irony" of the insurance chief's comments.

Yesterday ACE spokesperson Wendy Davis Johnson said: "Mr. Duperreault's point was not that it was inappropriate to incorporate in one jurisdiction and be domiciled in another. This is generally accepted throughout the world. His point was that any company receiving benefits from and creating risks for its place of domicile should be prepared to contribute to that place of domicile."

As for why the company held its place of incorporation in the Caymans, Mrs. Davis Johnson said: "ACE was incorporated in the Caymans on the advice of its original legal advisors but always intended to be domiciled in Bermuda. It is a Bermuda exempt company."

Asked if the company would consider moving its place of incorporation from the Caymans to Bermuda, she said: "ACE's current situation is satisfactory and there is no reason to make this change."

The company declined to comment on how much a presence it had in the Caymans or on contributions it may make to the Cayman Islands.

She added: "The fact of the matter is ACE creates no risk or problem and we have not hurt the Cayman's reputation or image as a jurisdiction for international business and we have created no burden to the Cayman's by being incorporated there."

Mrs. Davis Johnson continued: "The issue that Mr. Duperreault was addressing was the great damage done to Bermuda's good name and hard-won reputation by the negative publicity that resulted from inversions to Bermuda.

"In his speech he outlined what he felt was a just solution for avoiding this type of impact in the future."

Mrs. Davis Johnson said Mr. Duperreault's motivation in speaking out had been the potential for lost benefits to Bermuda and Bermudians.

She added: "Many companies incorporate in one country and operate in another."

Following his comments, Mrs. Davis Johnson said Mr. Duperreault, who is one of the few from the Island's business community to speak out on the subject, had had an outpouring of support - both letters and personal telephone calls - from representatives of the local and international business community and other sectors of Bermuda.

Mrs. Davis Johnson said she was not aware of Mr. Duperreault having received any negative feedback personally, following his speech.