XL Capital chief executive officer Brian O’Hara yesterday described comments attacking Bermuda as a tax haven as “cheap political fodder”.

Speaking at a conference in New York, Mr. O’Hara also said he believed potential US tax changes in future were unlikely to impact on companies that were “Bermuda born and raised”.

During a question-and-answer session at the Merrill Lynch Insurance Investors Conference in New York, he also spoke of how transparency had increased markedly in the insurance industry in recent years.

The possibility of tax legislation changes aimed at Bermuda companies doing business in the US has increased with the Democratic Party taking control of the US Congress and Senate in recent elections.

During the last US Presidential campaign in 2004, Democratic candidate John Kerry said: “If I’m President our government won’t provide a single reward for sending our jobs overseas, or exploiting the tax code to go to Bermuda to avoid paying taxes while sticking the American people with the bill.”

Mr. Kerry’s named US companies moving offshore to save on their taxes as “Benedict Arnold” firms — after the notorious American traitor.

Last month the Democratic-controlled US Senate Finance Committee voted to impose penalties on companies that redomiciled in Bermuda for tax-avoidance reasons between March 2002 and March 2003.

Mr. O’Hara told an investor who asked if he had concerns about future tax legislation challenges: “I think a lot of the talk is more smoke than fire.”

He said that some “inverters” — US companies who redomiciled to Bermuda — could have some vulnerability from tax law modifications.

Bur Mr. O’Hara added that companies like XL, which were “born and raised in Bermuda”, had less to fear.

“We don’t see what could be done that would interfere with our model,” he said.

“You can’t attack Bermuda, without attacking Switzerland, Germany and everyone else. It’s a globalised industry now and it needs to be a globalised industry.”

He said insurers and reinsurers were trying to communicate, through vehicles such as the Insurance Information Institute, the benefits of that globalised industry.

“In 2005 (after hurricanes Katrina, Rita and Wilma) the US industry lost only $5 billion,” Mr. O’Hara said. “That’s because it exported $30 billion worth of losses to the rest of the world.”

Mr. O’Hara told the audience at the Millennium Broadway Hotel of how transparency had improved in the insurance industry in the post-Sarbanes-Oxley Act world.

He said there was now “no finite reinsurance to smooth earnings” as there had been before, especially in the mid-1990s.

Insurers and reinsurers could no longer benefit from gaining market share through cutting rates, as those who tried it these days would be downgraded by the ratings agencies.

A sustained period of lower interest rates meant that companies could no longer count on making up the shortfall in investment income after cutting rates to gain business.

“There is so much transparency now that you can’t do anything below the surface,” Mr. O’Hara added.

The XL CEO also sang the praises of the company’s growing operation in India, based at Gurgaon, near Delhi.

“We now have 200 people in India and every process we have moved there we do cheaper, faster and better — the quality is phenomenal,” Mr. O’Hara said.

“Even if the cost advantage went away, we would still do it because of the quality.”

XL had no plans to make any reinsurance acquisitions in the near future, Mr. O’Hara added, as the company was “right where we want to be” in terms of size.

Last week XL the company said net full-year operating income for 2006 was $1.76 billion, or $9.83 per share, after a fourth quarter that yielded record profits.

O’Hara praises India operation