effects on insurers and reinsurers is being held in Bermuda next week.

Chicago-based law firm Lovell, White, Durrant is hosting the one-day Year 2000 (Y2K) workshop to get the industry up to speed on how to handle claims arising from the problem.

About 100 people are expected to attend.

The Y2K problem refers to a glitch in computer software and hardware in the way dates are read. With the change over to 2000 many computer systems are expected to fail or produce errors. The problem is forecast by some to produce billions of dollars in losses.

Joe McCullough of Lovell, White, Durrant said while many insurance and reinsurance companies are working to make their own computer systems and software programs Year 2000 compliant, relatively few have adequately prepared for the widely anticipated flood of claims stemming from the year 2000 date change.

The law firm is taking the workshop presentation to Chicago, New York and London as well as Bermuda. The concept grew out of a similar workshop done on behalf of Hannover Re at the end of September last year.

"It was a smash success,'' Mr. McCullough said. "We decided to do it again.

Bermuda is a big insurer of the US market and is also a reinsurer of worldwide risk. Big losses are going to be coming from around the globe. Given Bermuda's prominence we decided to do it in Bermuda for companies on the Island.'' The focus of the workshop will be getting underwriters and claims managers used to dealing with and resolving any Y2K coverage issues. Speakers will address identifying the types of insurance policies, years exposed and coverage issues. Others will discuss means of assessing the potential exposure to claims.

Arbitrating Y2K coverage disputes and steps the companies should consider to minimise potential exposure will also be on the agenda.

Then the workshop participants will sit down for half of the day and work through an embellished version of what is considered to be the first Y2K suit and settlement.

"They will be asked to negotiate an amicable resolution of coverage issues,'' Mr. McCullough said.

Last year Michigan-based grocer Produce Palace International received a $250,000 settlement from Tec America Inc. earlier this month. Produce Palace claimed Tec America had sold it a cash register system that did not always process credit and debit cards with expiration dates of "00'' representing the year 2000.

The cash registers in the store shut down completely when someone with a credit card that expired in 2000 tried to run up a charge.

"The case shows how this sort of loss will impact and which policies will be exposed and be impacted,'' Mr. McCullough said. "Lawyers will be looking for ways to attack insurance companies for coverage.'' Another unknown factor is whether coverage claims will extend to prior years.

Comprehensive general liability insurance companies could be hit for coverage for equipment, such as computer chips, that had been sold and installed prior to 2000.

"Y2K is a problem for the present and it's a problem for the past,'' he said.

"There may be exposure for old years.'' Bermuda-based panelists will include representatives from XL Capital Ltd., J&H Marsh & McLennan, Starr Excess Liability Insurance International, Ltd., ACE Ltd., Zurich Insurance Co. Global Energy and Milligan Whyte & Smith.

BUSINESS BUC