Bermuda's tally of insurance and reinsurance company formations made 1993 a truly unique year.

Mr. Malcolm Butterfield, Registrar of Companies, said that although he expected growth in the insurance sector to continue, 1994 would not see a repeat of what has been acclaimed internationally as the "astonishing'' influx of property catastrophe reinsurers.

"Last year's growth was a response to a need for capacity,'' said Mr.

Butterfield at a press conference organised by the Bermuda Insurance Institute.

"The response has been good, and while the market can take more of these formations, I anticipate there could be some tapering off.

"We could see an average amount of activity in this area, but do not expect to see the same amount in 1993.'' As for additional regulations for the complex new property catastrophe reinsurers, Mr. Butterfield said a review, involving the Government and the private sector, was in progress.

The Registrar's annual review of insurance and reinsurance company formations revealed that 1,315 international insurers were registered as of December 31, 1993.

No other offshore centre is domicile to a compatible number of insurers and reinsurers.

Sixty-one new companies were added to the Bermuda register during 1993.

However, the total number of insurance companies on the Registrar dropped below the 1992 level of 1,324, because of an unusually high number of removals last year, totalling 70.

Mr. Butterfield said many of the removals were inactive companies. "Removals are an inevitable fact of life in a mature insurance jurisdiction'', he said.

"The number of companies formed last year is of less significance than their size and quality,'' said Mr. Butterfield, referring to the 10 property catastrophe reinsurance companies, whose formation brought close to $4 billion in new capital to the Bermuda market last year.

The influx of catastrophe reinsurers has contributed to the change in the risk profile of the market's new incorporations from one dominated by pure captive insurance companies to one in which the reinsurance of unrelated risks accounted for 41 percent of the business being written by companies formed here in 1993, according to the Registrar.

Mr. Butterfield said the US body, the National Association of Insurance Commissioners' decision at its Hawaiian meeting in December to adopt the much-debated Model Fronting Act will not have an impact on the captives domiciled in Bermuda.

"The impact from our perspective as an on-shore captive domicile is negligible, and, not withstanding the act's adoption, there will be a lengthy process whereby the US states implement the bill.

"When it is implemented, it will not have a great impact, because there are certain clauses that ensure that our captives will not be affected.

"We can expect to see the modest growth in captives continue,'' said Mr.

Butterfield.

During 1993, 16.4 percent of business written by insurers incorporated was by pure captives.