Cayman Islands governor appoints new premier
* Governor rejects ousted premier call to dissolve parliament
* Says he is confident new premier will provide stability
* British territory will hold elections in May as scheduled
By Shurna Robbins
GEORGE TOWN, Cayman Islands, Dec 19 (Reuters) - The Cayman Islands' governor appointed Deputy Premier Julianna O'Connor-Connolly as premier of the British Caribbean territory on Wednesday, refusing a request by the ousted premier to dissolve parliament and call early elections.
O'Connor-Connolly, 51, succeeds McKeeva Bush, who was ousted in a no-confidence vote of the legislature on Tuesday, a week after his arrest on suspicion of corruption.
British-appointed Governor Duncan Taylor said he appointed O'Connor-Connolly on the advice of a majority of lawmakers from the ruling United Democratic Party, which holds nine seats in the 15-member Legislative Assembly.
"I am satisfied that the Honorable Julianna O'Connor-Connolly can form a stable, functioning government," Taylor said.
The Cayman Islands are a major financial center, offshore home to more than half of the world's hedge funds, and a leading global tax haven.
The governor said Bush had asked him to dissolve parliament and call new elections but that "after careful consideration and using my discretion as the Constitution entitles me to do," he instead appointed O'Connor-Connolly as premier.
General elections are to take place as previously scheduled on May 22 and O'Connor-Connolly planned to meet later on Wednesday with her newly shuffled Cabinet.
"My colleagues and I are determined to move this country forward in a united fashion with honesty and integrity and in all-inclusive government," she told Reuters.
"We will continue to work on enhancing our relationship with the United Kingdom and we are certainly going to make all efforts to empower the people so that our modus operandi is one of a consultative government."
O'Connor-Connolly was first elected to the legislature in 1996 and was a founding member of the United Democratic Party.
Bush, a veteran politician who became premier in 2009, has lost his Cabinet post as minister of finance, tourism and development but retains his seat in the legislature at least until the next election.
Police arrested him on Dec. 11 as part of a corruption investigation. He was released on bail until February, pending the possible filing of criminal charges. Authorities declined to give specific details of the investigation but said it included allegations of theft and misuse of a government credit card.
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