The head of the Argus Group said that spiralling prices of for healthcare could not be indefinitely borne by the customer, and urged Government to better regulate pricing in this sector.

In his letter to shareholders Gerald Simons, president and chief executive office of Argus expressed surprise that Government recommended that health insurance should go up by 22 percent and confirmed it would actually go up by about 12 percent with Argus.

?Clearly, employers and their employees who, in most cases, share these costs cannot tolerate increases of this magnitude indefinitely,? said Mr. Simons in a letter to shareholders this week.

And Mr. Simons said Argus hopes that a health council will be set up by Government to regulate the health care industry - and stop the costs going out of control.

?Each year in April the fees for services provided in the local hospitals and the insurance premium to be charged for these services are set by government,? he said.

? We also review the experience of our health insurance portfolio at this time.

?For the third year in succession the increase in health insurance premiums will exceed the rate of inflation in Bermuda by a factor of three.

?The standard premium, which covers public ward accommodation primarily, will increase by 12 percent although it should be noted that government?s actuary recommended an increase of 22 percent!

?The cost of other insured benefits is rising by similar amounts.?

But he said that Argus was encouraged that the government is pressing ahead with plans to create a health council which will oversee and regulate the health care industry.

?We have called for such a body for years. As the largest health insurer in Bermuda we will play our part to ensure its success,? he said.

Finance Minister Paula Cox said in her Budget Statement that the Government?s actuary recommended a 22 percent price rise, but that this would be kept at 12 percent.

Mr. Simons had already warned customers in The Bermuda Sun this month that the rates for health insurance could rise by as much as 12 percent this year.

And Glenn Titterton, chief executive officer of rival BF&M confirmed earlier this month that prices with BF&M would also rise by about 12 percent - but said it would not be across the board.

He said in an interview: ?For health care, costs have in general gone up and there are really two factors. One is that the cost of health care has increased and secondly, is usage; people are using (medical services) much more than ever before. For us, as insurers paying the cost, this makes it a double whammy.?

Mr. Titterton said health care premium increases were expected to vary widely, based on loss experience. He stressed that those with ?good? loss experiences may experience little shift in coverage costs, while other groups with high use of the policy, could be hit by paying more for their insurance policies.

?If a group had good loss experience (a reasonable level, rather than high level, of health policy claims) their increase might be contained between zero to three percent.?

The board of directors of Argus also declared a dividend of 22 cents per share payable on April 15, 2004 to shareholders of record on March 31, 2004.

The recent sale of the Bank of Bermuda gave the Argus Group a significant gain. Together with the special dividend paid at the time of sale, it contributed some $3 million to earnings for the year ended March 31, 2004, and served to offset the negative earnings effect of Hurricane Fabian.

In light of the strong performance in most areas of our business Argus expects earnings for the year ended March 31, 2004 to exceed the level achieved last year.