Bermuda is rolling out a trial regime for the supervision and financial reporting of insurance and reinsurance companies.

If successful it will become part of the Island's regulatory supervision armoury and place Bermuda in "good stead" for future reviews by the likes of the International Monetary Fund (IMF) or bodies from the US, Europe or elsewhere.

That is the belief of Jeremy Cox, who is supervisor of insurance at the Bermuda Monetary Authority.

And only days before the expected public release of the latest IMF report on Bermuda, Mr. Cox revealed that in the Island's standards of supervision of the insurance industry has been is viewed in a positive light by the international inspectors.

"Certainly the news is very good for Bermuda. We had a very detailed review done of our supervision of our commercial sector," he said, during a panel discussion on regulation at the LexisNexis-sponsored Mealey's Global Reinsurance Forum.

"When the IMF goes around the world and reviews jurisdictions, what they do on the insurance side is compare a jurisdiction's level of supervision to the International Association of Insurance Supervisors' (IAIS) core principles.

"One of the most positive comments I saw in the final draft of the IMF report was that Bermuda has achieved a very high level of observance with the IAIS core principles."

Mr. Cox told delegates at the two-day forum, held at Elbow Beach Hotel, that since 2003 - when Bermuda had been reviewed by the IMF - the Island has created a supervision framework guided by the IAIS' core principles which co-incidently were laid down in 2003.

With co-operation from the Association of Bermuda Insurers and Reinsurers and a number of companies outside the group, Bermuda's regulators have "developed a new model that really is quite unique for Bermuda and the companies that we have here," said Mr. Cox.

"We are looking to introduce that model this year so that the first financial reporting can be done next year and use that first year to make sure that we are comfortable with how the model is calibrated for our market and then kick-off in 2009 with reporting under that regime."

He said, as a result, it would put Bermuda in good stead when there is any future review of the Island's supervision and regulation by the IMF, or agencies from the US, EU or elsewhere.

The Bermuda model has been in the works for four years and "really matches up well with what has been put out by the IAIS," he said.

"After the IAIS introduced the first standards for the supervision of reinsurance Bermuda's view was 'Look, we've got to make sure that being known as this very key reinsurance centre, we have to make sure that we are considered one of the best supervisors.' You can't have companies of a class of our Class 4 companies - global players - and have supervision that doesn't match up to that.

"We introduced a regulatory reinsurance project which really continues today. It focuses on us addressing our staffing issues, it focuses on us building a whole new model of supervising the companies that we have that are risk-based.

"We always wanted to maintain the pragmatic approach that we had to supervision, but we wanted to have a system of supervision that was acceptable internationally.

Mr. Cox was speaking on a panel that focused on regulation of the insurance and reinsurance sector.

He was joined by Ramon Calderon, deputy commissioner within the financial surveillance branch of California's department of insurance, and Texas' department of insurance's former senior associate director Betty Patterson.

Central to the discussion was the desire for global standards of supervision of the insurance industry.

Mr. Cox said: "The IAIS has created a mutual recognition framework. The work is in the very early stages.

"What we are talking about is finding a way for regulators around the world to interact in a positive way so that companies that are global, and clearly reinsurance companies are global in their operations, are able to operate effectively and with less cost than if they were to have varying standards that they must adhere to around the world."

He said the IAIS was geared towards achieving mutual recognition of standards worldwide.

"Trust really is critical (between regulators).

"Sitting around the table of the IAIS clearly there has been a move to better understand the various standards and the approaches that other regulators around the world have to the issue of reinsurance regulation," he added, saying that understanding how other regulators operate and their supervision framework was a step towards finding a comfort level of trust and "equivalence" of standards across borders.

On the question of Bermuda working with other regulators overseas, particularly the US Securities and Exchange Commission, Mr. Cox said: "Bermuda has within its insurance legislation the ability to very easily work with other regulators, be they insurance regulators or organisations like the SEC.

"There will never be an instance where Bermuda puts up roadblocks to the SEC gaining information that allow it to do its job.

"Bermuda being the world class market that it is, it would be quite ridiculous for us to do that. Most of our Class 4 companies are SEC registrants.

"We would always want to have a very positive relationship with the SEC."