When Bermuda Premier Ewart Brown released a video on YouTube onNov. 2, he tried to convince his fellow citizens that the island'sfuture is bright.

"Bermuda's future is boundless," he said. "Our economic futureis strong; it's the envy of much of the world." However, during thesame message, he also addressed growing political tensions anddisclosed that Parliament was being dissolved in advance of amid-December general election.

The message came in the wake of a political corruption scandalthat three days earlier had culminated in a ruling by the PrivyCourt in London--the island's highest court of appeal--allowing themedia to report on some damaging police documents related to thecontroversy.

Coincidentally, it also followed a string of media reports amonth earlier suggesting that insurance and reinsuranceexecutives--who are supposedly dissatisfied with the politicalclimate in general and, more particularly, frustrated with workpermit time limits and delays--might consider packing up andleaving Bermuda.

Articles in Bermuda's Royal Gazette as well as the UnitedKingdom's Global Reinsurance and Reinsurance magazine reportedoff-the-record conversations with Bermuda executives that tookplace at the Rendezvous de Septembre in Monte Carlo, suggestingthey were readying their companies for what some of thesepublications called an "Island Flight" scenario.

In the United States, a few days after the Monte CarloRendezvous, Mr. Brown addressed attendees of an annualcongressional dinner with the Caribbean community hosted by theInter-American Economic Council, proposing a policy that would tiethree-year work permits for some types of workers, withrequirements to the permit holders to train local workers to dotheir jobs when the three years are done.

While such rules could make life more difficult for Bermudainsurers, two experts who spoke to National Underwriter recentlysaw the "flight" scenario as unlikely.

"We have not seen any suggestion of a wholesale move ofheadquarters off the island. That would be very much of a surpriseand it would generally be a big issue for companies to do that,"said Alan Murray, senior credit officer for Moody's InvestorsService in New York.

"There certainly has been some political tension on the island,which is just naturally a phenomenon of the local population andhow the government is balancing the needs of the local populationand the desire to have a very favorable and prosperousinternational business environment," he said.

"The growth pace of insurance in particular, and financialservices overall, is huge, and it's a small island, so it leads toresource issues," he said, adding that the accessibility to thepublic schools for expatriate workers in Bermuda has been achallenge for several years now.

Marty Becker, CEO of Max Capital, said that "Bermuda today isprobably the world's most attractive single domicile in which tohave an insurance company when you weigh all factors."

"It remains very robust. The people who work in Bermuda arereally pleased to be working in this market, and it continues to bea market that attracts creative talent," he said.

"I think that most of the stories that cast the Bermuda marketnegatively are typically [sourced from] players in other markets,"he continued. "You sort of have to question their motivations."

Mr. Murray said Moody's has seen that some Bermudainsurers--"partly for cost and maybe partly for work-permit related[issues], have sent some of their executives back to offices inEurope or the [United] States. So they're lightening up the staffcount relatively in Bermuda."

He said he's also seen some companies outsourcing orelectronically sending front-end catastrophe analytics onsubmissions to India or other places so they're not top-heavy backin Bermuda.

Will the next wave of startups come to Bermuda?

Mr. Murray responded that he wasn't even sure additionalcompanies would be needed to respond to the next loss crisis if onearises. The scope of opportunity was limited for the "Class of2005," he said, noting that very few companies were actually takenout of the market--"and most companies already in business wantedto fortify their capital and get back in."

Between sidecars, catastrophe bonds and opportunistic companiesthat raise capital when they need it, there may not be as muchdemand for startups in the future, he said.