Outgoing top insurance regulator, Mr. Malcolm Butterfield, said that he is delighted that the new insurance regulations have become law within his forecast timeframe.

The Governor, Lord Waddington, has signed the Insurance Amendment Act 1995 into law, amending the 1978 Insurance Act.

Mr. Butterfield, who leaves his job as Registrar of Companies for a job in the private sector in June, had initially felt that the new provisions would be law by the second quarter of the year.

He said: "The effective date was March 29. It has been a challenging exercise and I think that it is going to be a very useful piece of legislation for ensuring that Bermuda maintains its leading role as a credible jurisdiction.'' Local officials said that the new regulations are important to the future of the $29 billion insurance market, comprising the world's largest captive domicile and a major provider of global commercial and reinsurance capacity.

Mr. Butterfield brushed away criticisms from other jurisdictions that the new laws would have little effect, and would change very little.

He said: "If you want to look at just captives, well yes, very little will change. I agree with that. But it was designed that way.

"However, when you start to look at the Class Four companies, i.e. the specialty reinsurers and the property catastrophe companies, there will be changes. If you look at the Class Three, there's only one falling in that category, but yes there will be changes.

"There was a real interest in being able to regulate them in line with the type of business and type of risk exposure that they have. That's what the rates were designed to do.

"It was a diversification of the market that drove the need to have such an extensive review and revamp of our regulations. That was really the whole impetus behind it.'' Class Four firms will have until the end of the month to be in compliance with the new rules and other companies will have until the beginning of the new year.

There are no problems expected in the companies meeting the deadlines. Many were said to be in compliance before the legislation was approved by Parliament.

The changes mean that reinsurers and commercial insurers generally will have to meet more stringent regulatory requirements for capital and surplus.