AS&K 'The Brief' - CATEX (Bermuda) Ltd - A Proposed Electronic Risk Exchange

INTRODUCTION

The Bermuda Stock Exchange ("BSX") and The Catastrophe Risk Exchange, Inc. ("CATEX Onshore") are proposing to create a new exchange in Bermuda which will be operated by a joint venture company to be called CATEX (Bermuda) Limited ("CATEX Bermuda"). Upon inception, CATEX Bermuda will be the world's first offshore, computer-based risk exchange where members may cede, exchange or purchase risk electronically.

PURPOSE AND OVERVEIW OF CATEX BERMUDA

Ninety percent of the most costly catastrophes in history have occurred in the last eight years - insured losses for Hurricane Andrew amounted to $15.5 billion; the Northridge earthquake amounted to over $10 billion; and the Kobe earthquake amounted to approximately $3 billion! If this disconcerting trend continues, as is predicted by some insurance industry experts, many property and casualty insurers could face the threat of insolvency. CATEX Bermuda is intended to provide a means for primary insurers and re-insurers of