Finance Minister Paula Cox moved to reassure the business community in the wake of XL Capital Ltd. reportedly seeking a buyer and three Bermuda-based companies - Tyco International, Foster Wheeler and Weatherford - announcing plans to move to Switzerland.

Ms Cox also revealed in statement yesterday that Government is set to sign a Mutual Legal Assistance Treaty with the US. Bermuda already has an exchange of tax information agreement with the US that goes back 20 years.

She said that a number of rival domiciles were competing for existing and new business during these tough economic times, with each one gaining and losing out as a result.

"While yesterday's developments in the business community are cause for close monitoring, it should be clearly articulated that the ebb and flow of a company's operations has always been a cyclical trend," she said.

"Many jurisdictions with similar qualities to Bermuda are vying for existing and new business in these uncertain times. Each jurisdiction will experience gains as well as losses.

"However, in Bermuda's case, coming on the heels of recent successes in the negotiation of Tax Information Exchange Agreements with OECD Member countries, the forthcoming signing of an important Mutual Legal Assistance Treaty with the US will add to Bermuda's attraction as a premier jurisdiction for international business.

"Ms Cox said Government was aware of the challenges facing Bermuda and the Ministry of Finance had redoubled its efforts at economic diplomacy, the strengthening of strategic alliances and legislative reform to ensure that the Island maintains its position among the top business centres.

"The issue of legislative reform was clearly evidenced this week by the passage in the House of Assembly of the Insurance Accounts Amendment Regulations Act 2008, the Insurance Returns and Solvency Amendment Regulations Act 2008 and the Bermuda Monetary Authority Amendment (No.2) Act 2008. These amendments raise the standard of insurance supervision and regulation in Bermuda," she said.

Ms Cox pointed out that despite perceptions that other jurisdictions offer preferential tax treatment, the Bermuda model continues to hold its place in the upper echelon of the leading global reinsurance hubs. And she added that the Ministry will continue to aggressively market and promote the Island as a prime destination to do business.

"Global companies continue to view Bermuda as a premier hub of operations," she said. "We are a proven, quality jurisdiction, with the assets of speed of execution, effective regulation coupled with a well-known reputation for operational efficiency.

"Such depth and diversity provides for endurance and stability. And we expect that Bermuda will continue to be an inviting place as a premier domicile of choice."