international business interests that their capital could be endangered by political changes in the Island.

Asked during the IBC Captives Conference about Independence for Bermuda, Mr.

Astwood first made it clear that the issue was firmly rejected by the electorate during the 1995 Referendum.

But he said Bermuda was politically stable and insurance supervisors were civil servants. In the event of a change in government, he said, there would still be the same supervisory stability.

He also said, "Both the ruling party and the opposition party recognise the importance of Bermuda's international business sector to the economy. So there is little chance that either would institute laws or regulations that would hamper that industry.'' And Mr. Astwood revealed that Bermudian officials are reconsidering a prior decision against the establishment of an elective tax structure to cater to non-US captives that have zero tax status.

Some captive domiciles (including Isle of Man) have successfully allowed an elective tax structure where captives can determine if they would pay taxes there, instead of the higher taxes in their originating home land, and, what such taxes might be.

Mr. Astwood also was drawn into discussion of President Clinton's tax proposal to raise the tax deductibility cut-off point from 30 percent to 50 percent, forcing captive insurers in non-US domiciles who seek tax breaks, to write more third party business.

He said Bermuda's new multi-licence system would require captives writing 50 percent non-related business to be subjected to more stringent regulation as Class Three insurers. Many of the captives are at present Class One and Class Two insurers and subject to minimal regulation.

The types of unrelated business being entertained by Bermuda captives can be written in a controlled fashion.

BUSINESS BUC