agreement with the French Government Export Credit Agency, COFACE.

Effective April 1, the 10-year agreement will provide COFACE with $80 million of private sector reinsurance coverage for COFACE's portfolio of French equity investments located in China.

Sovereign will be the lead reinsurer for this China-specific reinsurance facility, providing $70 million in capacity. French reinsurer, SCOR, will provide the balance of $10 million.

French Finance Ministry officials said that it was the first time that either COFACE, or any other European Export Credit Agency, had enlisted the support of the private political risk insurance market in a cooperative reinsurance arrangement.

Ministry officials said, "This first operation reflects the growing importance of the private political risk insurance market and exemplifies cooperation between public and private guaranties.'' Sovereign's president and CEO, Price Lowenstein, said the deal was a significant milestone in Sovereign's development.

Sovereign, which began last summer, underwrites political risk on behalf of ACE Insurance Co., Ltd., XL Insurance Co., Ltd. and Risk Capital Reinsurance Co.