over the future of the new Bermuda reinsurers in a report published this month.

"With most of the new insurers writing relatively risky business and their capital bases unprotected by reinsurance or retrocessional capacity, one must question whether this is a catastrophe waiting to happen,'' said the report published in Standard & Poor's title `Focus'.

On an upbeat note, the researchers find the reputable nature of the reinsurers backers "comforting''.

"Most of the capital directed at Bermuda insurance operations in the past few years has come from institutions that have staying power.

"While their commitment to their Bermuda investments must always be reevaluated and questioned, many at least have the ability to support future losses should they occur,'' it said.

However, the report continues to state that although Bermuda's regulatory environment encourages investment in the Island's insurance companies, from the perspective of policyholder security, the regulations are considerably more lax than those in the US.

"By themselves, the regulations do not protect policyholders from greedy parent companies or investors who may want to take out most or all of a company's earnings,'' said the report.

New property catastrophe reinsurer Centre Cat's president Mr. Charles Kline hit back at the criticism. He described the article as "disparaging'' and said some of the comments were "premature''.

"For a market that has only been in operation for less than a month, the writer reached some long range conclusions,'' he said.

"The participants, who represent the capital behind the Bermudian companies are unlikely to behave in the way the article implies they will,'' said Mr.

Kline.

"The main point I will emphasise is that the reinsurers understand the risks and rewards. Do not underestimate the technical knowledge and expertise of the people here. Time will prove my point,'' he said.

Standard & Poor's questions whether or not there is enough business to generate healthy returns on surplus for all the new companies that formed in Bermuda last year.