The Bermuda Monetary Authority (BMA) sees no need to make its admissions procedure more rigorous, Supervisor of Insurance Jeremy Cox said on the second day of the Bermuda Insurance Conference ? ?but (the Authority is) going to take the current system of reviewing applications and bring it totally in-house,? Mr. Cox said.

The present system, which he described as ?a partnership between some industry professionals ? and the Authority? will no longer apply.

Mr. Cox added that the Authority has accumulated the resources necessary to make this change.

The BMA is working with PricewaterhouseCoopers, he said, ?to introduce a Bermuda risk-based capital model, which we are trying to have in place late this year or early next year?.

Day Two of the conference featured a panel discussion entitled: ?Rating agencies: Do they understand? Are they understood??

John Scheid, chairman of PricewaterhouseCoopers? Americas? insurance group moderated, and the panel was composed of Michael Butt, chairman of Axis Capital, Don Kramer, chief executive officer of Ariel Re, James Bryce, president and chief executive officer of IPC Holdings, and Mark Puccia, managing director of Standard & Poor?s (S&P).

Mr. Bryce was the first to introduce an element of frankness into the conversation. The turnover of rating agency staff is so high, he said ?that we?re constantly explaining to a new face what we?re doing. It?s a constant merry-go-round.? He also suggested that the agencies? ?bedside manner could also be improved?.

Mr. Butt spoke of a ?massive compression? in the way companies are rated, pointing out that most companies fall within a narrow rating band.

?Each of us is frustrated,? Mr. Butt said. ?The process doesn?t encourage us. There is a credibility gap.?

Mr. Kramer, who began his career at Moody?s, a rating agency, has started several major insurance and reinsurance companies. He spoke of his frustration at being regarded as ?a 69-year-old freshman?, not being given sufficient credit for his past experience.

Lightening the mood, he added: ?I?m a AAA insurer trapped in an A- body.?

For his part, Mr. Puccia explained the difficulties he has telling acting from the truth in his interviews with insurers.

The second session, on start-ups, was less controversial. Paul Markey, chairman of Aon (Bermuda) Ltd., commented: ?Our business is beginning to become sophisticated, but still has a long way to go.

?Bermuda is a melting pot, a laboratory.?

A session on catastrophe risk, climate change and new structures preceded Mr. Cox?s lunchtime speech, and another on the 2006 hurricane season followed, bringing the conference to an end.

Among the many conclusions reached during the second day: a wave of consolidation among the Bermuda companies is possible, but less likely than was the case after 2001; an A- rating is critical to a company?s forward motion (summed up as ?it?s A- or die? by Mr. Bryce; companies can no longer recover from serious mis-steps as they once did, a single big mistake now leading to extinction; the Class of 2001 was a case of management in search of capital, where the Class of 2005 was the reverse, capital in search of management; personnel is now the key factor affecting the growth of the Bermuda market; and hedge funds appear to be the big winners from the 2006 hurricane season, having bought into the peak (and therefore the best-priced) risk through sidecars, of which they will soon disinvest themselves.