put on hold for as much as a year.

That was the word this week as reinsurers and other industry participants attended the annual Rendezvous de Septembres, the annual reinsurance conference in Monte Carlo.

The Council of Lloyd's bypassed an opportunity to adopt the necessary byelaw enabling captives to become part of the market's infrastructure.

The lack of passage transpired because of unresolved negotiations between Lloyd's and US state insurance regulators regarding the market's US trust fund commitments, Insurance Day reported.

Bermuda remains the largest captive insurance domicile in the world, with by far more captives registered here than anywhere else in the world.

Lloyd's proposed a possible structure for the admission of captive syndicates to its market, including rules for admission and monitoring of captives. The use of captive insurers grew significantly in recent years as more companies realised their importance as a risk management tool.

The industry included total premium of some $20 billion last year and Lloyd's chairman Max Taylor said recently he was confident that the proposals would be accepted by the participants of the Lloyd's market.

He was quoted as saying, "Certainly the Lloyd's regulatory regime and the UK tax code are not as lenient as those in some other captive domiciles. Yet I genuinely believe that we can offer an attractive environment for captives.'' He said that captive syndicates at Lloyd's would be able to take advantage of that market's global licences, rating and expertise as well as its position at the heart of the global insurance market and the City of London.

Potential benefits for Lloyd's would include direct involvement with a growing sector of risk management, better access to reinsurance opportunities and an expansion of Lloyd's business base. Once a captive syndicate had been established, he added, a parent company may be willing to commit itself further to the Lloyd's market, possibly by establishing itself as an Integrated Lloyd's Vehicle.

To ensure that the inclusion of captives at Lloyd's would pose no unacceptable level of additional risk to the Central Fund nor a threat to the integrity of Lloyd's chain of security, Mr Taylor said that captive syndicates would be subject to the same "stringent regulatory requirements'' as other Lloyd's market practitioners.

They would be required to fulfill a number of basic admission criteria, and each syndicate would require a managing agent that is fully independent from the captive parent to act as its sponsor.

Captives wishing to write third-party business at Lloyd's would have to do so through a separate syndicate to ensure separately managed premiums trust funds for each portfolio.