When some of the biggest names in the global capital markets meet at a remarkable behind-closed-doors gathering in New York City next week, the recent 'rescue' of the remnants of Bermuda's PXRE reinsurance company is expected to be shown as an example of the way ahead for dealing with troubled insurers and reinsurers.

The one-day gathering is so select and unpublicised it has yet to hit the radar of the world's major financial media, but The Royal Gazette can today provide details of what will be on the agenda when some of the world's super heavyweight financial figures shut the doors and, out of sight of all media, start to talk.

The outcome is likely to have an impact on the future of insurance and reinsurance companies in Bermuda and elsewhere. The top-level meeting will feature Forrest Krutter of Berkshire Hathaway, Christopher Flowers of JC Flowers and Company and New York State insurance superintendent Eric Dinallo amongst others.

It is invitation-only and restricted to just 200 attendees, however Bermuda business lawyer John Milligan-Whyte is on the planning committee and can arrange invites for Bermuda insurance sector leaders whom he hopes will attend the exclusive and potentially ground-breaking gathering.

The International Association of Insurance Receivers is hosting the 'Emerging Investment Opportunities: Bridging the Gap between the Capital Markets and Troubled Insurers' programme at the Ritz-Carlton New York on October 24.

Mr. Milligan-Whyte said Bermuda has been cast in a favourable light as a result of the rapid and effective merging of PXRE and US company Argonaut Group earlier this year to create the holding company Argo Group.

Despite being one of the Island's older Class 4 reinsurers, PXRE ran into trouble when it suffered massive insured losses as a result of the 2004 and 2005 hurricane seasons. When it was given unfavourable assessments from the rating agencies its ability to re-load capital was effectively ended. But rather than crash towards insolvency it was picked up by Argonaut in a swift financial rescue that shows what is now possible.

The gathering a week on Wednesday comes in the wake of a call by New York Governor Eliot Spitzer to create a commission to identify ways for New York to retain and enhance its status as a world financial capital.

In May, Gov. Spitzer said: "This panel will help the State bring its regulatory structure into the 21st century, encouraging the use of cutting edge technology and techniques to provide capital, insurance and other services to companies and individuals around the country and globe."

The commission is seeking to reorganise the State's antiquated financial regulation structure to make it more competitive and innovative and take into account the evolution of the financial markets with banks, insurance companies and securities firms becoming increasingly indistinguishable.

Amongst its members is the head of the world's biggest company Citigroup, as well as the bosses of AIG, AXA, JP Morgan, Bank of New York, and the president of the Federal Reserve Bank in New York.

New York insurance superintendent Mr. Dinallo is chair of the commission and is one of the 'big three' who will be at the Ritz-Carlton Hotel one-day gathering, which is billed as an "innovative and unprecedented programme bringing together key leaders in the financial, insurance and regulatory communities to explore means of bridging the historical gap between the capital markets and troubled insurers."

Resolving the challenges faced by troubled insurers seeking bridging finance and asset sell-offs and alike will form a central part of the meeting.

Mr. Milligan-Whyte, of Hamilton-based Milligan-Whyte & Smith, said: "The calibre of people (in the commission) shows that Spitzer is going to do something. When you have these types of super heavyweights together it is a very serious initiative for the financial regulations of New York City and that can have a large impact on Bermuda."

No Bermuda representatives are on the commission. However the October 24 closed-doors gathering is a chance for some of the Island's insurance/reinsurance leaders to take-part in the discussions, which are being held in the absence of any media to allow candid discussions to take place.

New York Commission to Modernise Regulation of Financial Services chair Mr. Dinallo made a comment at a private meeting in March that the New York Insurance Department was going to take a different approach to dealing with troubled insurance and reinsurance companies.

Mr. Milligan-Whyte believes this will be a good thing for the sector.

He added Bermuda had shown itself in a good light through the resolution of a merger-style rescue of PXRE by San-Antonio's Argonaut Group this year.

"PXRE has made Bermuda look really good because you could not do a rescue that quickly before. Along came Argonaut and by merging the profitable business held by PXRE was saved. Mark Watson (Argo Group CEO) is potentially going to be flavour of the month," said Mr. Milligan-Whyte.

"The purpose of the meeting is to synchronise the expectations of the capital investment market, the insurance market and the regulators - discussing the type of deals that can be done and those that shouldn't be done.

"The type of things that they want to do could be done through Bermuda holding companies. We are the best place in the world for this; it could be an Argonaut buying a PXRE or a top five US company becoming insolvent and investment through a Bermuda holding company saving that big company."

Mr. Milligan-Whyte said any CEOs or executives from Bermuda who would like to attend should contact him at Milligan-Whyte & Smith on 295-4294.