NEW YORK (Reuters) - U.S. money managers with reinsurance companies in Bermuda and the Cayman Islands could lose a valuable loophole under Republican proposals to overhaul the tax code unveiled on Thursday.    The plan includes a 20 percent excise payment on payments from domestic firms to foreign affiliates that could affect private equity firms and hedge funds that have overseas reinsurance operations. The proposal would effectively kill the so-called Bermuda reinsurance loophole under which money managers are able to invest the premiums they raise as reinsurers in their funds without paying any tax on the gains. The plan is part of a 429-page bill that would represent the largest overhaul of the U.S. tax system since the 1980s, and many analysts have raised doubts about the likelihood of it being passed. [nL2N1N80E2] “Our base call is that this tax package will fail. That would remove the immediate threat to the Bermuda reinsurance loophole,” said Jaret Seiberg, an analyst with Cowen Washington Research Group.     “We cannot, however, say there is no risk here. This is because we do expect a smaller bill that deficit-finances temporary tax cuts that extend through the next presidential election. It is possible that there could be a few revenue offsets in that bill.” Shares in private equity firm Apollo (APO.N) ended down 3 percent on Thursday while its Bermuda-based division Athene Holding (ATH.N) closed nearly 7 percent weaker. Athene reinsures retirement savings products for people and institutions and has helped drive profits at Apollo.  Third Point Re (TPRE.N), the Bermuda-based reinsurance arm of hedge fund Third Point, finished 0.6 percent weaker while Greenlight Re (GLRE.O), a Caymans reinsurer run by hedge fund Greenlight ended down 0.23 percent.     Representatives of Greenlight and Third Point were not immediately available to comment. Included in the draft is also a proposal that would exclude non-traditional insurers based overseas, including hedge funds and other investors, from qualifying for favorable tax rates if certain insurance-related assets, such as some types of reserves and unearned premiums, represent less than 25 percent of their business. “The threshold in the bill is too high,” said Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers. “These alternative capital vehicles took real losses from Hurricanes Harvey, Irma, Maria,” Kading said. 