Mr. Zeller took issue with co-panelist Ray Barrette, chairman and CEO of White Mountains Insurance Group, who suggested that an OFC would not have a dramatic impact on reinsurers, which are not heavily regulated in the United States and are basically regulated by only one state.

It is the foreign reinsurers that have a problem with U.S. regulation, Mr. Zeller stressed. Giving some figures to demonstrate the impact of their problem, he said that Lloyd's for instance must put up collateral of between $12- and $14 billion each year, and Hannover has to put up $7 billion, at a cost of $70 million to obtain letter of credit.

Because this issue "is of utmost relevance to us," Mr. Zeller said he went to Washington in October. He reported details of a conversation with Rep. Paul Kanjorski, D-Pa., who has introduced the house bill on OFC.

"He told me he is very confident that this will happen because the NAIC [National Association of Insurance Commissioners]--the state-based patchwork regulation system--seems to be incapable of bringing about change," Mr. Zeller reported.

"The feds have to step in, but that will take seven or eight years until they agree on something, and then another five years to establish a new federal bureaucracy to take care of the matter," he speculated.

"So not too many of us will experience this" during our careers, he said.

Kicking off the panel about operating a reinsurance company in a global economy, S&P Managing Director Rob Jones asked for comments on the likely impacts of recent and pending European regulatory changes on global reinsurers.

Mr. Jones said Solvency II, with a 2012 implementation date, is the "modernization of European insurance supervision."

He said that, "until recently, most reinsurers had a pretty light regulatory burden in Europe," but the situation was changed with the introduction of the European Reinsurance Directive in 2005 and Solvency II to expand what S&P believes is a "revolution in regulation."

Mr. Zeller said the Reinsurance Directive provides for "a single passport," or one-stop supervision. If you have a license to do business in one EU member country, you can do business without supervision in any of the other 26, he said. "Imagine if this took place in the United States," he added.

Going forward, he said Solvency II will replace the Directive expanding the concept of "mutual recognition" beyond Europe for the supervision of entire multicompany groups, such as AXA and Allianz.

"Groups from jurisdictions with equivalent systems can agree on mutual recognition." In other words, he said, if Bermuda brings its regulatory system up to the standards of other jurisdictions under Solvency II, then groups domiciled in Bermuda can be supervised solely by the Bermuda Monetary Authority.

Mr. Zeller said the BMA "is heavily working toward mutual recognition," reporting that during a recent meeting of the Committee of European Insurance and Occupational Pensions Supervisors (the "European NAIC"), the BMA indicated it is working to beef up its staffing from 120 people to 180 people.

Neill Currie, CEO of Bermuda-based RenaissanceRe Holdings, said the BMA is also looking to introduce risk-based capital standards. He suggested, however, that the activities are being driven by the increasing number and complexity of Bermuda companies, rather than Solvency II.

Mr. Zeller said U.S. companies operating internationally "will be heavily disadvantaged" if the United States doesn't also rework its current regulatory system.

"Mutual recognition would help you," he said, "if the United States were in position to recognize that in other jurisdictions throughout the world there is also, or maybe even better regulation--and mutually recognize that [reality], instead of depending on assets being on shore," Mr. Zeller noted.