Supervisor of Insurance Jeremy Cox said the fundamental purpose of his position is to protect policyholders.

"The fundamental purpose of my position is to protect the interest of policyholders. This is the primary role of an insurance regulator," he said.

But Mr. Cox added that there were differences in the local market: "The Bermuda market is somewhat unique in that you don't have a significant retail market. You don't have a significant number of companies providing insurance to the man on the street. What we have is predominately business to business relationship with sophisticated buyers and sophisticated sellers. That is something a lot of people don't understand about the Bermuda market. They see all of this capital here, they see all of this premium and they forget to take in to account who you are protecting.

"When you talk about protecting the interest of policy holders, generally in Bermuda you are talking about a sophisticated entity," Mr. Cox said. Mr. Cox has been at the head of the insurance division since its separation from Government at the start of the year. The Insurance Division had previously been a part of the Registry of Companies as a department of the Finance Ministry but it became part of the Bermuda Monetary Authority (BMA) in January. Mr. Cox, as then Registrar of Companies was picked to head up the new division.

In announcing that the division would become separate, Finance Minister Eugene Cox said: "In

co-operation with the United Kingdom, the Government will continue to implement recommendations contained in a KPMG Review. Legislative initiatives will be aimed at improving Bermuda's competitiveness as a jurisdiction.

"The goal is to be seen to be transparent and more efficient," Mr. Cox Sr. said. He added that the move will strengthen the Island's reputation as a jurisdiction with "clean regulatory authority above reproach". In a similar vein, Mr. Cox Sr. said Government had already turned over the licensing of banks and financial institutions to the BMA, a job that previously fell to the Finance Minister.

The net result of these changes, the Finance Minister said, is that the BMA will now become the sole regulatory body for insurance and the financial services sector in Bermuda. Although protecting the interest of policyholders, Mr. Jeremy Cox conceded that regulation in turn protects the Island's reputation as an insurance jurisdiction: "In fulfilling the primary role of protecting policy holders you are protecting Bermuda's interests and Bermuda's reputation," he said.

Mr. Cox said that although not a direct result of the insurance division moving to the BMA, the Authority recently made changes to its management structure. He said the organisation previously operated under a hierarchical model of the board, then the chairman of the board, and the general manager.

He added: "Now you have the board and the chairman, and two executive directors: one an executive director for insurance, which is myself, and the other is the executive director for banking, trust and investments, Monroe Sutherland."

Mr. Cox said the new division, including himself has 15 staff. The majority of those would have already been employed within the insurance division at the Registrar of Companies, but he said the numbers have increased slightly: "We took all of the insurance division and have hired an additional senior analyst and one additional post at the senior analyst level to fill," he said.

s Insurance Supervisor Mr. Cox said he is keeping an eye on the increasing attention on Bermuda - from both the international media and US legislators - following a growing number of high-profile corporations, including Stanley Works, Ingersoll-Rand and Tyco, have changed their place of incorporation to the Island for tax reasons. Although the furour is not focused on the insurance industry, legislative changes might affect formerly US insurers that have moved to Bermuda. Mr. Cox said: "Certainly as supervisor of insurance you have to be mindful and keep a watching brief on anything that could pose a threat to your activities. "I personally believe - and I am just dealing with insurance companies, not Stanley Works and so on - in a lot of ways all we need to do is educate people a little bit more about what we do in Bermuda."

Mr. Cox added: "The people that do business here know the way that we regulate and the level of sophistication that we have here. They know the level of intellectual capital that has been drawn here and know that we have companies like ACE and XL which have a significant stake in the Island and have a significant physical presence." Mr. Cox continued: "We just need to get that message out there a little bit more and what it may require is the regulator being more visual at conferences where there are international regulators.

"We are operating in a global marketplace. I don't want to start getting in to clich?s but that is for real. And that says it all, you cannot sit here in Bermuda and isolate yourself. There has to be discussion and interaction with overseas regulators, because the companies you are regulating are operating in their realms. And certainly September 11 is a good example, as it prompted discussion with UK regulators on what we were doing and how we and the companies were responding. And certainly we did not shy away from that scrutiny."

Mr. Cox concluded: "We have done some work to get that message out there, but we need to do more. And in other quarters besides the US, we also need to do it in the European market. And high on my list of priorities is taking a more visual role. "With our prominence from an insurance standpoint, we have to be active, we have to be out there and involved in the work that is being done to develop and enhance international regulatory standards. "When we do that we will see some of that misperception disappear," he said, but added: "The other thing that is funny and needs to be recognised is that we are extremely successful in this market. We have to remember that we are being watched by other jurisdictions, and success itself is going to bring additional scrutiny. But also there are those who may not want to see us be so successful. We have to be mindful of that, there is going to be some level of negativity, as has been seen written about Bermuda that we just won't be able to do anything to change as it is mainly driven by jealousy that finds its way to the press," Mr. Cox said.

r. Cox underscored that Bermuda has been able to achieve prominence in the global marketplace through careful regulation of the sector. He said significant changes to the Island's Insurance Act took place in 1995, and set the framework for regulation. As part of that, Mr. Cox said there are times that he does have to step in and take action with local insurers. There have been two notable examples of this in recent months with regulatory action being taken against Enron Re in January, and more recently, the appointment of a review team to ailing local insurance services company Mutual Risk Management. Of the regulatory process, Mr. Cox said: "Every registered Bermuda insurance company must file its statutory financial returns with us annually. These are financial statements prepared in line with our insurance act which is a generally more conservative approach than general accounting procedure (GAP) statements.

He added: "They also would have certain reporting requirements, they are required to report if anything of significance happens to their company. That would be falling below certain levels of solvency, if they were going to alter their business approach, anything that could have an impact on policyholder interests, they would be required to report those changes in the space of 21 days."

Mr. Cox said company information "is looked at closely and we utilize the network that we have with players in the industry as they also have an interest in protecting the credibility of this jurisdiction." But in support of local insurers, Mr. Cox said: "We have had good relationships with the companies. And if you look to the companies that we have here, you would be hard pressed to find fraud elements. In general, companies may have failed because of bad business decisions, poor underwriting or what have you. But people are very forthright with information and the companies and directors take their responsibilities under the Insurance Act very seriously," he concluded.