Montpelier buys surplus lines unit

HAMILTON, Bermuda— Montpelier Re Holdings Ltd. is purchasing an excess and surplus lines company and has begun sending business to its Lloyd's of London syndicate under newly gained coverholder status in the continuing expansion of the group's operations in the United States.

It has agreed to buy General Agents Insurance Co. of America Inc., a unit of Dallas, Texas-based GAINSCO Inc. for up to $4.75 million plus the amount of policyholder surplus held by the insurer at closing, Hamilton, Bermuda-based Montpelier Re said in a statement.

The company, which writes excess and surplus lines insurance in 38 states, will be renamed Montpelier U.S. Insurance Co. and will be based in Scottsdale, Arizona, primarily writing excess and surplus lines business in the continental United States.

Meanwhile, Montpelier Re's Hartford, Conn.-based unit Montpelier Underwriting Inc. has sent its first piece of business, a property facultative reinsurance risk, to Syndicate 5151 at Lloyd's, which was recently granted coverholder status at the marketplace, according to the statement.