he would not expose Bermuda's captive insurance companies to tighter financial reporting restrictions in the United States without their agreement.

"Confidentiality and privacy have been one of the cornerstones of our success in Bermuda,'' said Mr. Butterfield.

"We would have to look at how it would change people's perception of Bermuda as a jurisdiction. We would not want to be seen to be throwing the baby out with the bathwater.'' Mr. Butterfield was responding to a question at a Bermuda Insurance Symposium session on `Fronting -- Is it a dirty word?', where he came face-to-face with Mr. Steven Foster, president of the US National Association of Insurance Commissioners.

Mr. Butterfield repeated his call to the NAIC to exempt from its Model Fronting Act those US insurance carriers which act as fronts for offshore reinsurers, to whom they cede all or part of their risks.

The NAIC is seeking to impose tighter financial reporting regulations on fronting carriers in a bid to combat the threat of company insolvencies but offshore captives oppose the move, which will mean extra expense in complying with the regulations.

Mr. Butterfield said that the regulations that exist in Bermuda, which is the world's leading captive domicile, were "unique and effective''.

"If there are problems with companies we have a process set up which allows us to act accordingly and in a timely fashion,'' he said.

Mr. Foster admitted that he felt "lonesome'' at the Symposium yesterday after other panelists agreed with Mr. Butterfield that offshore captives should be exempt.

Earlier, he had listened to Mr. John Gantz, president of AIG Risk Management, say: "We need fronting arrangements to maximise long-term results.'' And Mr. Neil Pearson, a partner in the Wall Street law firm of Carter, Ledyard & Milburn, said that the current draft, although a "vast improvement'' on previous drafts, is "far from perfect''.

But Mr. Foster gave no indication that the NAIC will give in to extensive lobbying to have the Act changed.

"The purpose of the draft is to ensure proper disclosure and regulation of reinsurance transactions in which licensed carriers delegate to unlicensed reinsurance entities,'' he said.

"This does not attempt to directly regulate fronting carriers or captives. We are not trying to eliminate fronting carriers or captives.'' Mr. Foster said that the current version of the Model Fronting Act is scheduled to go before the NAIC Summer National Meeting in June.

But he appeared to emphasise that the Act in its current form is by no means final and could be subject to changes.

OPPOSING VIEWS -- Bermuda's Registrar of Companies Mr. Malcolm Butterfield (left) and Mr. Steven Foster, president of the National Association of Insurance commissioners get together at the Bermuda Insurance Symposium.