When most people think of insurance, they think of a form to be filled out, a cheque to be sent off annually, and a claim that will never be paid. For the man in the street, that's insurance.

During the second day of the 13th Annual Reinsurance Congress yesterday, anyone whose understanding of insurance extended only that far would have sunk without trace in a sea of "special purpose vehicles'' -- which have nothing to do with cars -- "15 percent haircuts'', which means taxation, not a short back and sides, and "uncollateralised contingent capital,'' which means not much more than "a promise to pay''.

That said, for the 230 delegates to the conference, yesterday afternoon's sessions on securitisation, the structuring of trusts and Bermuda's role as the incubator of the New World Market were the heart of the conference, the reason they have travelled from Switzerland, France and points further afield.

Among the esteemed panellists was David Brown, formerly the chief executive officer of Centre Re, almost the chief executive officer of Gemini Re and now a bearded fellow "doing something on the Internet,'' as one of the conference organisers put it.

Mr. Brown, accompanied by Rob Lusardi, the chief financial officer of XL Capital and David Goverin, a director of Arrow Reinsurance, batted it around for a while. They were followed by a panel of lawyers, made up of Charles Collis of Conyers, Dill & Pearman and two gentlemen, Martin Minkowitz and Vincent Laurenzano of Stroock, Stroock & Lavan LLP, a US firm.

Then, around 4.15 p.m., came the master. Bryon Ehrhart, of Aon in Chicago, is generally credited with inventing the Cat-E-Put, a device for securitising insurance transactions. Securitisation is the process by which money up front, rather than a promise to pay later, gives the insured the confidence that a claim, should one arise, will be paid.

When haircuts don't mean a short back and sides Mr. Ehrhart spoke fluently, and largely incomprehensibly from a layman's perspective, of the $8 billion in securitisation deals already done, and of "lots more in the pipeline''.

Tellingly, Mr. Ehrhart spoke of the first "onshore securitisation'', carried out in Illinois, and how "we worked with some terrific regulators in Illinois''.

That phrase might have sent shivers down the spines of listening Bermudians, who have built a major industry on the back of the fabled unfriendliness of onshore regulators.

But the folks in Illinois may be the exception that proves the rule; the other 48 securitisation transactions completed to date have all been offshore, most of them in the Cayman Islands, a jurisdiction which has made them a specialty.

The news that Bermuda is to offer segregated cell structures will allow the Island to join the party, most likely without submitting the players to haircuts of any sort.

13TH ANNUAL REINSURANCE CONGRESS BUSINESS BUC