other than Bermuda are likely to grow in the futre, according to a top captive isnruance company expert.

Mr. Robert W. Virtue, president of International Risk Management (Bermuda) Ltd., also forecast the birth of more spin-offs in reinsurance that may not be directly related to captives, but that may contribute to the enhancement of the captive industry.

Speaking at the Bermuda Market Briefing on Tuesday, he added: "(There's an) increase in disturbing trends toward an increase in litigation, arbitration or mediation, between parents and captives.'' Earlier in hos speech, Mr. Virtue said corporations form captive insurance companies because conventional insurers do not meet their financial needs.

Mr. Virtue said a main reason why many corporations are against traditional insurance is because they are paying more to the insurance company to cover the company's expenses and commission payments to brokers.

"(They are) usually paid in advance,'' Mr. Virtue said. "This means that the insurance company holds on to the premium until claims are paid back to the company and it earns investment income on this retained premium.

"It also earns investment income on the profits made from the insurance transaction.'' He added that companies retained more risk, but felt that insurers did not adequately compensate for the discount for deductible. He said that the captive helped solve this problem, putting the buyer in the same position as an insurance company, enabling them to retain all of the risk they wanted within their own operations while pushing levels they did not wish to retain out to reinsurers.