Act, which could have repercussions for Bermuda's captive insurance companies, is set to be formally approved at the association's Hawaiian meeting this week.

The Act, which contains a clause including offshore captives in its measures, will go before the NAIC's executive committee. An exemption for offshore captives is considered unlikely, because the executive has never turned down on of its committee's proposals.

The Act aims to tighten up the reporting procedures of offshore captives, which use US insurance companies as a go-between or "front''.

Most captives in Bermuda use fronting arrangements to conduct their business.

Although the new regulations are not expected to radically change requirements for single parent captives based in Bermuda, it could result in onshore domiciles in the US persuading new companies to set up in their jurisdictions.

Association captives and those entities which also write third party business are expected to be most affected.

Registrar of Companies Mr. Malcolm Butterfield arrived in Honolulu, Hawaii on Saturday to act as Bermuda's representative at the NAIC meeting.

Some US state insurance regulators are reported to have stayed at home, rather than be seen to travel to a vacation spot like Hawaii.

Although last year's winter meeting in Atlanta was popular, this year, several commissioners have decided not to attend or to reduce the number of staff members attending, even though controversial issues will be raised this week.

Thirty-four insurance commissioners and 214 insurance department staff members were expected to attend this week's meeting at the Hilton Hawaiian Village -- down almost 50 percent on last year's meeting.

Overall attendance in Hawaii, including insurers, lobbyists, attorneys and others, was down by about a third to an expected 1,116 this year.

Image, and not expense is, apparently, the main factor that has deterred commissioners from attending.

Commissioners, who do not attend, can vote via proxy.

The NAIC was scheduled to announce yesterday the accreditation of six new states: Delaware, Georgia, Oklahoma, Washington, West Virginia and Wyoming.

The US-based National Risk Retention Association is still considering taking legal action against the NAIC to halt its attempts to indirectly regulate risk retention groups.

Mr. Malcolm Butterfield.