Premier Alex Scott told delegates of a reinsurance conference taking place on the Island they could bank on Government making sure the attributes that had made Bermuda a leading financial services sector in the first place would be safeguarded.

Mr. Scott gave the opening remarks at the third annual international reinsurance conference, hosted by Ruark Insurance Advisors, as it kicked off at the Fairmont Hamilton Princess yesterday.

Mr. Scott told the group ? all familiar with the Island as a business domicile ? that he recognised the importance the Bermuda market played in providing reinsurance capacity.

"Facilitated by a friendly regulatory environment, the industry has been able to seize opportunities almost as soon as they present themselves, and continues to demonstrate a remarkable capacity for innovation."

By the 1970s, the Island was already known in insurance circles as a 'captive domicile' after pioneering work here on this self-insurance mechanism.

Today Bermuda is still the leading captive domicile today, but in the last five decades the sector has developed into a much broader multi-dimensional re/insurance market on the cutting edge of alternative risk transfer mechanisms.

"My administration will continue to do all it can to foster an innovation-friendly environment for your industry," Mr. Scott told delegates. But he recognised that an intense, high-profile probe of insurance industry practices in the US may have cast an unwelcome spotlight on the Bermuda market.

Authorities, including New York attorney general Eliot Spitzer, the US Securities and Exchange Commission (SEC) and the Department of Justice, have been investigating the sector since early last year.

In recent months AIG has come under intense scrutiny, including scrutiny of transactions with offshore firms it secretly controlled in Bermuda, Barbados and Dublin.

One AIG Bermuda executive was dismissed as a result of not cooperating with regulatory questions and four others quit the local AIG office, because of concerns about the investigation.

Mr. Scott told the reinsurance group gathered this week: "It would be remiss of me, considering recent and ongoing events, not to point out that we will do this [encourage innovation without neglecting the need to meet, and exceed, international standards as it concerns corporate governance issues.

"Our commitment to work with other regulators is unwavering and irreversible," he said. The Bermuda Monetary Authority, regulator of Bermuda's financial services sector, has said it is conducting its own investigation in the AIG matter.

Mr. Scott said: "My administration will not lose sight of the need to respond appropriately to any winds that could potentially threaten our reputation. We trade on our reputation, we are proud of our reputation and you can bank on our reputation."

The Ruark-sponsored conference continues through today, having attracted representatives from a dozen leading US financial services companies.