budget are the near 1,199 percent increase in annual fees, and the near 548 percent increase in initial registration fees for class four insurers and reinsurers, scheduled to begin April 1.

Fee increases will help pay for closer scrutiny of (re)insurers by Bermuda regulators, the Minister, Grant Gibbons said yesterday.

He added: "It probably reflects a little more closely the level of regulation that class four insurers require under the Insurance Act Amendment.

"But also, the Registrar has been looking for a few months at how he can upgrade his services. We're trying to be more on-line oriented in having electronic storage of documents, electronic registration and filing.

"So, the reason for increasing the fees goes directly to trying to increase the efficiency and the manner in which the actual companies are dealt with.

That does not only include the class three and four firms, but also the class one and two insurers.'' The initial registration fee for class four insurers shoots up from $2,315 to $15,000. The annual fee also climbs from $1,155 to $15,000. The old fees had applied to all classes.

Class one and two insurers carrying on general business will enjoy a reduction as a result of this year's budget, with registration fees dropping to $1,500 and annual fees dropping to $800. The fees rise to $2,500 if they are also carrying on long-term business.

The fees for class three insurers both will rise to $2,500.

The Minister said that the Insurance Advisory Committee, which includes executives in the industry, vetted the increases before they were accepted.

Dr. Gibbons said, "It was discussed with the Insurance Advisory Committee, which has as members a good complement of insurance sector representatives. So they were aware of it and (Registrar of Companies) Kymn (Astwood) had some consultation back, I think, in December.

"Before it was put in the budget, we were careful to have a chat to make sure the increases were not deemed to be unduly onerous. With any form of increased government fee, while you are looking to raise revenue, at the same time you have to balance that with what the market can bear.

"So it didn't seem to be an unreasonable fee in the grand scheme of things.'' The Minister also stated: "There were a number of members of the property catastrophe (reinsurance) companies and some of the larger other companies that were present when it was discussed. It was discussed with the IAC, but there are also other members of the industry who may not be on the IAC specifically, or who may be on a sub-committee.

"They definitely did have some input into this. I would be foolish to say that anybody is pleased to pay more taxes. But the direct feedback I got from individuals who were there, representing larger insurance companies with a physical presence here, and also some of the property catastrophe companies, was that it was not unreasonable.

"Obviously, given a choice, they'd prefer not to have to pay any more registration or annual fee. But they understood it to be a reasonable balance and understood the reasons for trying to make the class one and two companies more competitive, and adjusting the three and four companies appropriately.'' BUSINESS BUC