Bermuda-based Montpelier Re Holdings Ltd. (NYSE – MRH) announced that its wholly owned operating subsidiaries, Montpelier Reinsurance Ltd. and Montpelier Agency Ltd., have entered into agreements with the Overseas Private Investment Corporation (OPIC) to form an insurance facility to underwrite stand-alone terrorism insurance products.
OPIC is a U.S. government agency that promotes U.S. private investment in developing countries and transition economies. One of OPIC’s principal objectives is helping U.S. investors manage business risk by issuing political risk insurance. For those businesses whose main insurance concern is related to terrorism, the new facility will provide cost effective stand-alone terrorism coverage for limits of up to $250 million per project. Montpelier Agency Ltd. will manage the facility on behalf of OPIC, providing underwriting and related services.
“This important initiative helps us to continue supporting foreign direct investment in those areas that have become potential targets for terrorist activities overseas,” OPIC vice president for insurance, Michael Lempres, said. “We are pleased to team with Montpelier Re and its experienced staff in this endeavor, which will certainly broaden the distribution of our terrorism insurance products and further protect American businesses abroad.”
Lempres noted that in November 2002, Congress passed the Terrorism Risk Insurance Act of 2002 (TRIA) to ensure the continued availability of terrorism insurance domestically. “OPIC’s new terrorism products will do the same for insurance of American projects abroad, which TRIA does not cover,” he said.
OPIC’s terrorism insurance will cover violent acts with the primary intent of achieving a political objective, undertaken by individuals or groups that do not constitute a national or international armed force. In addition, coverage will include protection against threats posed by weapons of mass destruction. OPIC will offer protection of up to 10 years and in countries for which private sector insurance is not readily available.
Montpelier Re Holdings Ltd., through its operating subsidiary Montpelier Reinsurance Ltd., is a provider of global property and casualty reinsurance and insurance products. Montpelier Reinsurance Ltd. is rated “A” (Excellent) by A.M. Best Company, “A3” (Good) by Moody’s Investor Service and “A-” (Strong) by Standard & Poors, and was founded in December 2001. During the 12 months ended December 31, 2003, Montpelier underwrote $809.7 million in gross premiums written. Shareholders’ equity at December 31, 2003 was $1.7 billion. Additional information can be found in Montpelier’s public filings with the Securities and Exchange Commission.
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