Bermuda is actively pursuing captives in the US health care industry, Registrar of Companies Kymn Astwood has told the IBC Captives Conference at the Princess Hotel.

Mr. Astwood said, "Health care captives is an area that we are concentrating our marketing efforts on. It's especially important to us because historically, there have been a lot of misconceptions with respect to our attitudes to health care captives.'' And Mr. Astwood said that of the 97 insurers formed in Bermuda in 1996, just 23 were registered as Class One insurers, a 30 percent decline from the previous year, as more companies seek a Class Three designation so that they would be allowed to write more third party business to achieve certain tax benefits from their country of origin.

Meanwhile, the number of Class Three insurers incorporating was 30, up by 36 percent. And while Class Two insurance incorporations stayed the same at 28, three Class Four insurers were formed, representing a 200 percent increase.

With incorporations from non-traditional markets, like Hong Kong, Korea, Canada, Australia, Japan, Central and South America, Mr. Astwood said they are the areas from where the largest percentage increases in captive formations can be expected in the future.

He said, "According to the World Bank, the growth in the GDP of developing countries will out pace industrial countries by more than 75 percent. As a result, we are positioning ourselves to take advantage of these opportunities.'' By 1995, the Bermuda market had gross premiums written of $23.4 billion and net premiums of $18.4 billion. Total assets were up to $95 billion and capital & surplus was $36.9 billion.

The huge success of the Bermuda market was put down to a number of factors including: the low expense ratio of local insurers -- Operating expenses of Bermuda insurers are some of the lowest in the world because of efficient operations with low staff ratios. It gives them a significant competitive advantage.

unencumbered capital & surplus -- Bermuda's commercial carriers are largely newer companies which do not have the problems of the past that are shared by Equitas and some US insurers. In 1995 many major US insurers made significant adjustments in their reserves for asbestos and environmental impairment liability. And Mr. Astwood predicts further revisions will be needed.

a substantial resource of intellectual and financial capital -- Bermuda's property catastrophe reinsurers have attracted management and underwriting talent of the highest international order. The companies, as a consequence, have out-performed traditional multi-line companies and have maintained or expanded their market positions amid fierce competition.

The balance sheets of these companies are also quite impressive, a point supported by strong ratings from rating agencies, that in some cases were given before the normally required five years of operations.

quality control -- Bermuda has long put more emphasis on quality over quantity, because of the Island's limited land resource. As a result most of the Fortune 100 companies have some representation here.

Mr. Astwood said in addition to the catastrophe reinsurers, Bermuda also had pioneering excess liability companies and the largest concentration of financial reinsurers in the world. Bermuda-based insurance facilities also have a lock on the oil spill liability protection market, as required by US law.

For the future, securitisation of risk is gaining more attention and more electronic commerce has been targeted with a view to eventually having companies file statutory financial returns electronically.

Mr. Astwood said, "In addition, service providers will be able to pay government fees and reserve company names online. They will also be permitted to do public searches of scanned documents from the comfort of their offices.'' BUSINESS BUC