of buying and selling insurance and reinsurance products, in the first quarter of next year.

CATEX Bermuda will be a joint venture between New York-based Catastrophe Risk Exchange (CATEX) and the BSX. CATEX is an intranet which allows primary insurers, reinsurers and brokers to anonymously post risk they would like to sell, or swap for other risk or cash.

"We will enable people to communicate,'' BSX chief executive officer William Woods said. "It's an automatic process of moving quotes around and the documentation. It's an electronic application for insurance contracts.'' So far the BSX has signed up 37 members to CATEX including AON Corp., Everest Reinsurance Co., Sedgwick Re, Pix Re, and Enron Corp. The BSX is now working on getting Bermuda-based companies to join.

Mr. Woods said the exchange was waiting for the BSX board's approval to spend money on setting up CATEX. Then the BSX expects the Bermuda market will begin signing up.

Mr. Woods said CATEX trading would work well with the trading in catastrophe risk options at the Bermuda Commodities Exchange.

"We both see a complementary fit,'' he said. "Over-the-counter trading will encourage use of their hedging contracts.'' The BSX is also working with FTSE International -- owned by the London Stock Exchange and the Financial Times -- to create an insurance index based on the stock market performance of Bermuda-based insurers and reinsurers.

Once it is set up the BSX plans to create options based on the index. The options will allow investors to buy into the overall performance of the Bermuda insurance market. The BSX is in negotiations about listing the index options with the Bermuda Commodities Exchange.

William Woods