Bermuda still leads the way as the top captive domicile, and efforts are underway to ensure that continues, Roger Gillett, chairman of the Island?s Insurance Development Council, said yesterday.

The IDC, the Bermuda Insurance Management Association, the Finance Ministry and regulatory authorities at the Bermuda Monetary Authority are now meeting regularly to discuss initiatives to extend the Island?s reign as the king of captives, Mr. Gillett revealed, in an interview.

While guarded on how much he revealed ? saying he didn?t want to tip off the competition ? Mr. Gillett allowed some measures were cosmetic, such as providing greater, and more timely, statistical information, while other initiatives went deeper.

Under the captive insurance concept, pioneered decades ago in Bermuda, corporations establish special vehicles to effectively provide self-insurance. Through the years other captive domiciles have sprouted, but Bermuda has continued to attract the largest number of captives. Many of the world?s Fortune 500 corporations own Bermuda-based captives.

Now the Island is moving to shore up its advantage as a captive domicile as rival jurisdictions, including an increasing number of US domiciles, become more established.

In 2005, Bermuda saw 75 new insurance companies form. Ten of those were ?class four? companies, major insurers generally capitalised with in excess of $500 million.

The way monthly insurance statistics from the BMA are tabulated, it isn?t clear how many are captive insurers, but Mr. Gillett said most of the 65 will have been.

For years there has been talk of the Cayman Islands, a captive domicile that attracts healthcare captives, gaining on Bermuda. Mr. Gillett said he is more concerned that the growing number of US captive domiciles will take a bite.

Last year, the Caymans saw 59 new insurance incorporations. In comparison, major US captive domiciles ? Hawaii, Nevada, New York and Vermont ? collectively saw 77 captive insurance companies form.

That appears to put the US slightly ahead of everyone else, including Bermuda, but Mr. Gillett said a key piece of information is missing: the number of rent-a-captive companies that formed.

?Many of the companies that would have previously formed a captive now are forming a rent-a-captive or segregated cell company,? he said. The number of rent-a-captive incorporations aren?t currently counted in the BMA?s insurance statistics. Mr. Gillett said that is one thing on the agenda to be changed.

Under a rent-a-captive structure the insured gets to ?rent? space in a company, forming, in effect, a mini-captive. It is common for the structure to be designed as a segregated cell which legally separates each ?mini-captive? from the liabilities of any other cells.

The structure is attractive to corporations because of being easier and more affordable to set up then a stand-alone captive.

Critics say Bermuda?s captive market has come under threat not only from growth in rival captive domiciles, but from the runaway success of the Island?s traditional insurance and reinsurance markets. That market now counts about $40 billion in capital, ranking it as one of the world?s largest reinsurance centres.

?Outside of Bermuda, it is easy for people to have the perception we have moved on from being a captive domicile; that the two markets are mutually exclusive,? Mr. Gillett said. ?This is not the case, they can live side by side quite comfortably. And the numbers display we are still the leader in the captive field.? Bermuda has in the region of 1,000 captive insurers.

Bermuda continues to draw wide interest from major corporations wanting to form captives because of the expertise resident in the Island?s captive management firms, Mr. Gillett said. And the Island?s stature as a leading insurance and reinsurance market is complementary, he added.

Captives can provide significant risk management to corporations, but some form of traditional insurance or reinsurance coverage is also generally needed. Bermuda, as both a captive and traditional insurance market, is a one-stop shop, he said.

?That, and the expertise, is why you will find major corporations still domicile their captives here.?

And he said costs, while rising, aren?t threatening to outweigh Bermuda?s other benefits. ?We have increasing costs here but we also have the expertise,? he said. ?Our challenge is to ensure that we provide a good value product and that our clients and prospective clients understand this value.?