The US financial bailout plan will benefit Bermuda's insurance industry, according to John Kephart, president and CEO of Capital G Bank.

The plan, which was passed by the US House of Representatives by 263 to 171 on Friday in its revised form after having been rejected last Monday, aims to rescue America's financial sector by buying up the bad debts of failing institutions on Wall Street.

Mr. Kephart also raised fears about US presidential candidate and Democrat Senator Barack Obama's threats to shut down tax havens and whether Bermuda was on his hit-list.

Despite Sen. Obama not making direct reference to Bermuda, the Island was on a list of jurisdictions taken from Internal Revenue Service court filings identified as "probable locations for US tax evasion" under the "Stop Tax Haven Abuse Act" introduced by Sen. Obama, Democratic Sen. Carl Levin and Republican Sen. Norman Coleman last year.

Mr. Kephart said that the removal of sub-prime mortgage securities was positive for the Island's re/insurance market.

"Anything that continues to stabilise the reinsurance market by providing an opportunity for these securities that continue to plague these organisations to be removed from the equation is a positive for us," he said.

But he warned that Sen. Obama's threats over tax havens could come to fruition if he got into power and that Bermuda might well be in the firing line.

"Our next big challenge in the short-term is related to the US election, because we have got on the one hand Barack Obama promoting closing tax havens and I am concerned about Bermuda being included as a tax haven," he said.

"Ithink the bailout plan creates some stability and look forward to what is happening in the reinsurance industry, but I think the next side of it regarding the election should be of concern to us, but we will just have to wait and watch on that one.

"It would be terrible if we do get everything resolved and the companies got back into decent condition again and then Barack Obama came down and removed Bermuda's tax status.

"In the long-term, Mr. Kephart reckons the bailout plan will bode well for the future of the US and wider global economy as it looks to get back on its feet.

"This is the reason why the bailout bill is important because we are seeing issues being resolved. I am optimistic that we are going to see less volatility in the future."