New Bermuda-based financial guaranty reinsurer Channel Re is up and running with funding and strong financial ratings from two leading rating agencies.

In a press statement issued on Friday, the company?s investors said Channel Re had received financial strength ratings of ?Aaa? from Moody?s Investors Service and ?AAA? from Standard and Poor?s. The company is to be run by former MBIA managing director, Michael Maguire as CEO and MBIA?s former chairman and CEO, David Elliott as board chairman.

Two of the four companies behind Channel Re are well-established Island reinsurers with ownership being divided between between Bermuda-based RenaissanceRe (32.7 percent), Koch Financial (29.9 percent), Bermuda-based PartnerRe (20 percent) and MBIA (17.4 percent). The quartet announced they were setting up the company late last year.

Channel Re will be capitalised with equity capital of approximately $366 million. The company will assume approximately $27 billion portfolio of in-force business from MBIA, participate in its reinsurance treaty and provide facultative reinsurance support.

As the largest investor, RenaissanceRe CEO Jim Stanard said: ?We are very pleased to be involved with such a strong group of investors and believe Channel Re is well positioned to be a very successful financial guarantee reinsurer. The strategic relationship with MBIA allows Channel Re to rapidly deploy its capital by the assumption of an in-force portfolio, and gain the benefit of MBIA?s market leading expertise.?

New CEO Mr. Maguire said: ?The unique structure of Channel Re?s preferential relationship with MBIA and the provision of long-term stable, highly rated reinsurance to MBIA are expected to produce attractive long-term returns for the investors. With the Triple-A ratings from both Moody?s and Standard & Poor?s, as well as its large capitalisation and strong investor group, Channel Re will provide MBIA with high quality reinsurance and increased capacity.?

Mr. Maguire has spent the last 13 years at MBIA, where he held positions of increasing responsibility, most recently as head of the Emerging Markets Group. Prior to that, he oversaw the company?s insured portfolio and market risk management areas. In 1991, he spearheaded MBIA?s international expansion by opening its first overseas office in Paris and later oversaw Japan, Asia, Latin America and the global securitisation unit.

Mr. Elliott is a 30-year veteran of the insurance and financial guarantee industries.He was previously was chairman of the Municipal Bond Insurance Association, predecessor of MBIA Insurance Corporation, from 1976 to 1980 and from 1984 to 1986. With the formation of MBIA in 1986, he was appointed president and chief operating officer, then served as chairman and CEO from 1992 to 1999. He began his career at The Aetna Casualty and Surety Company in 1969 and quickly rose in the company to become the vice president in charge of the financial guarantee department. He acted as chairman of the Association of Financial Guaranty Insurers, the industry?s trade organisation, from 1988 to 1990.