NEW YORK--The head of a U.S. property-casualty insurer is soincensed about tax advantages foreign competitors have over U.S.counterparts that he's set a personal goal to have the situationchanged, he announced last week.

William Berkley, chairman and chief executive officer of W.R.Berkley Corp. in Greenwich, Conn., made these comments at aninsurance industry conference in New York last week.

His remarks came during the opening panel of the 18th AnnualExecutive Conference for the Property-Casualty Industry, after hewas asked about the U.S. market impact of competitors in theforeign markets--particularly those in Bermuda--that don't pay thesame level of taxes.

"My goal is to get those guys to pay taxes. It's my number onecompensation goal for 2007," Mr. Berkley said, directing hiscomments to "everyone who owns stock in a Bermuda company."

Mr. Berkley reported that a foreign competitor that wrote asimilar amount of U.S. commercial business last year paid only $19million in taxes, while W.R. Berkley paid $260 million. "That's asignificant competitive advantage," he said.

He also said that making his case that foreign counterpartsshould pay comparable tax amounts won't be a hard one to sell inWashington. Seemingly outlining his pitch to federal lawmakers, hesaid that companies in Bermuda and other offshore locations canoutsource their processing jobs to places like India, leaving nobusiness here beyond shell companies collecting U.S. dollars.

At a later session, Edward Noonan, chairman of Bermuda-basedValidus Reinsurance, responded, saying that "Bermuda plays a vitalrole in financing American risk competitors" and that Bermuda hasits own local tax regime.

Changing tax rules to create a more level playing field, hesaid, would "only increase the cost of risk to the United States,"adding that U.S. companies "would be hard-pressed to deliverBermuda capacity."

John Charman, CEO of Axis Capital, said, "We are where thecapital wants us to be."

During the opening session, Mr. Berkley, when asked to identifythe most worrisome risk facing insurers, focused not on tax issuesbut on the potentially temporary nature of capital coming in fromreinsurance sidecars being set up in Bermuda, and other financialarrangements that are not classic insurance.

Noting that some companies are "betting their survival" on newvehicles backed by lengthy contracts, Mr. Berkley asked, "How willthose 65-70 page documents play out if something goes wrong?"

Joseph Brown, non-executive chairman of Seattle-based Safeco andexecutive chair of Armonk, N.Y.-based MBIA, countered that the newvehicles have some positive consequences.

"They are bringing capital market efficiencies to other playersin the market," he said. "You don't have to use them directly forthem to have an effect," he said, suggesting, for example, thattheir existence eats into the profits of some reinsurance behemothslike Berkshire's National Indemnity, led by Ajit Jain.

"It keeps Ajit's returns from being this big to this big," hesaid, gesturing to make his point that the vehicles are "keepingthe market honest in terms of capital returns."

While Mr. Brown noted the ability of capital to move in at anaccelerated pace--potentially shortening the length of theinsurance cycle--Mr. Berkley posed questions about how quickly itwill move out. "What happens when the first event happens andyou've used up your financial transaction, and those players don'twant to come back in? A second event happens and you're naked," hesaid.