A reinsurance unit of Bermuda-based White Mountains faces regulatory action in Florida.

It is understood that Sirius International Insurance Corp., a subsidiary of White Mountains Re, has been issued with a notice from the Florida Department of Insurance Regulation for allegedly selling insurance in the state without a licence.

White Mountains Re general counsel Don Emeigh told on Saturday he had not yet seen the notice but thought it had to do with allegations the company had sold insurance in Florida without a licence.

?I have an idea, there was an application for a licence pending and there was an allegation that, at one time, Sirius, had done business there [in Florida without having a licence. That is questioned, but I have not seen the paperwork so I am really not sure,? Mr. Emeigh said.

He said there had been certain requirements made by state regulators as a result of the licence request from Sirius, but he said he wasn?t sure what the status of Sirius? licensing application was.

When asked if Sirius was currently selling insurance in Florida, Mr. Emeigh said: ?No, not that I?m aware of. I?m not sure it ever did.?

Besides being the unit of a Bermuda-based reinsurer, Sirius also does business with at least one other firm on the Island, Olympus Reinsurance.

White Mountains regulatory filings show that Olympus has had a quota-share agreement with both Sirius and sister company, Folksamerica Re, since 2003 and 2002, respectively.

Olympus took a significant hit last year from its exposure, through these quota-share agreements, to claims from a wave of devastating hurricanes causing costly property damage across Florida.

Olympus was set up as a privately-held property excess reinsurer in late 2001 in response to a void in reinsurance capacity following the September 11, 2001 terrorist attacks in the US.

The quota share agreements ? through which Olympus takes on a stated percentage of the risk from certain policies sold by the White Mountains Re units ? with Folksamerica and Sirius account for the bulk of Olympus? business.

WTM holds about 20 percent stake in another Bermuda reinsurer set up after the September 11 attacks, Montpelier Re.

White Mountains trades on the New York Stock Exchange (WTM) and took a secondary listing on the Bermuda Stock Exchange after redomiciling to Bermuda from Delaware in 1999. It sells insurance and reinsurance around the world, and has total net assets of about $19 billion.

One of the company?s largest shareholders is General Re-New England Asset Management, a division of insurance titan Warren Buffett?s Berkshire Hathaway.

Mr. Buffett sat down with New York attorney general Eliot Spitzer, representatives of the US Securities and Exchange Commission (SEC) and others from the US Department of Justice earlier this month to answer questions about a finite risk policy between Gen Re and the American International Group that has come under scrutiny.

AIG has been under a high-profile investigation by these bodies as part of a widening probe of insurance industry practices underway since early last year.