Bermuda is speeding toward a milestone of having 10,000 operating international companies.

And Finance Minister Grant Gibbons has told an annual international captive insurance conference at the Princess Hotel that Bermuda is also fast becoming one of the leading offshore domiciles for health care captive insurers.

The Minister was signalling Bermuda's increasing acceptance of health care captives, which were shunned until the end of the last decade.

The inaugural two day conference, which concluded on Friday, was aimed at developing strategic risk management solutions through innovative uses of health care captives, and was produced by Cambridge Health Resources.

The conference was used as a forum to bring together health care and captive insurance executives.

But Dr. Gibbons, in welcoming the delegates, talked of Bermuda's international business sector, half of which is represented by insurance and reinsurance.

"An independent report published recently showed that during 1995, international companies spent $527 million in Bermuda, 22 percent more than during 1994,'' he said.

"More than one in three jobs in Bermuda are now dependent on the presence of international business. Last year appears to have been equally buoyant.

"And in the first quarter of 1997, the rate of new incorporations was 40 percent more than in the previous year, bringing the total number of active international businesses on the register to 9,515.'' Dr. Gibbons said: "Driven by the increasing emergence of managed care programmes and other changes taking place in the US health care industry and attracted by the benefits of being located at the undisputed global hub of the captive insurance movement, approximately 90 health care captives have been incorporated in Bermuda over the last few years.

"They are a diverse collection of companies. Their US ownership ranges from groups to single hospitals, from not-for-profit, tax exempt hospitals to for-profit health maintenance organisations and physician-controlled entities.

"Why are they here? I understand that many of these organisations are seeking cost effective access to the reinsurance markets in order to offer competitive insurance coverages to participants in their programmes.'' Dr. Gibbons said Bermuda had been more cautious in courting health care and medical malpractice business than other insurance domiciles. He said incorporation policy from 1975 to the 1980s sought to protect Bermuda's image as a well-regulated and reputable insurance centre.

The guidelines recommended that companies insuring medical malpractice should not be admitted unless the coverages they offered were limited to the malpractice and general liability risks of shareholder hospitals and hospitals owned or managed by a captive's parent organisation.

He said: "Indeed, there was a general reluctance on the part of the Bermuda regulators and the industry to encourage the incorporation of captives insuring the risks of so-called "non-employed physicians''.

"It was largely because of these guidelines that growth in health care captive numbers in Bermuda was slow to materialise. I am happy to tell you that the guidelines were actually scrapped in 1989.'' This year there is more interest in establishing health care captives in Bermuda, than ever before, he said.

Dr. Gibbons also explained that unlike other captive jurisdictions, Bermuda also boasts a thriving commercial insurance market, providing risk managers and other buyers a wide range of risk transfer solutions.

Grant Gibbons The Royal Gazette welcomes any business announcements you would like to see publicised. Such announcements could include information about staff promotions or the start-up, purchase, or expansion of a business. Contact the business section at 295-5881 ext. 247 or 248. Fax: 292-2498.

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