This week, Bermuda plays host to ICAP '99, an international conference which will address all the latest issues surrounding captive formation, ownership and management.

ICAP '99 is a three and a half day event expected to draw an unprecedented number of risk management executives from around the world. Four dozen industry experts are scheduled to speak.

In response to extensive research by conference organisers International Business Communications, a new, multi-level programming system will be in use at the conference to cater to both risk management professionals entering the captive market as well as those with established captives, regardless of domicile. This year, a Healthcare and Tax-Exempt Entity tutorial has been added to the programme.

The conference will feature what IBC describes as a new concept in professional education: the Masters Summit Series. In addition to plenary sessions and main conference sessions, ICAP '99 will feature Summits that cater to the specific professional educational needs of established captive owners. In response to the overwhelming demand by owners of established captives to receive more advanced information on captive ownership.

The Summits are designed to provide a more sophisticated level of content.

Intensive working sessions are led by top industry professionals and will focus on particular areas of interest to owners of mature captives in smaller, roundtable settings.

Bermuda is the perfect location for a conference on the captives. The Island's international insurance and reinsurance industry began more than 50 years ago, but only began to gather steam with the introduction of the captive insurance company, a term first used in Bermuda in the 1960s.

Captive insurance has flourished in Bermuda and underpins the recent development of the Bermuda insurance industry. Bermuda continues to hold the lead in the captive market worldwide, which is now practiced in two dozen jurisdictions, all trying as hard as possible to emulate Bermuda's success.

At heart, a captive insurance company is used to self-insure the risks of its parent company or other group companies. This basic idea has been embroidered and developed and now covers a number of types of captive, of which some of the largest, such as ACE and XL Capital, are themselves turning into major international businesses.

More than 1,200 captive companies have made Bermuda their home. Bermudians service providers are the most experienced in the world in many of the support disciplines needed by captive insurance companies.

Insurance has driven Bermuda's international business sector to a disproportionate size and influence. Bermuda must be the only country in the world in which the term captive insurance is in broad daily use. Bermuda's 20 square miles, and more specifically the 177 acres of Hamilton, process captive insurance premiums well in excess of $10 billion a year.

The majority of Bermuda's captives are American-owned. Among their uses are reinsuring the deductibles on general liability, auto liability, workers compensation, property and marine programmes. Captives also provide access the reinsurance markets.

The basic model has never gone out of style. To this day, many of Bermuda's captives are "single-parent'', which insure only the risks of their parents and affiliates. Others are group-owned or association captives, which are formed by members of a common industry, such as ACE and XL.

In the past few years, growing numbers of health-care or medical malpractice captives have been added to the Bermuda register.

"Rent-a-captive'' facilities are available in the Bermuda market which provide captive-type services for programmes whose size may not justify the use of a separate captive insurance company.