million is cash and $35 million contributed surplus, to start a new reinsurance business on the Island.

North American Fidelity and Guarantee Ltd. is wholly-owned by Canadian Mr.

John Grant Marshall through his Bermuda-based holding firm, Indemnity Finance Ltd.

NAFG reinsures non-marine -- mostly property -- marine and aviation business and is managed by Stockholm Management, which is based at Windsor Place, Hamilton.

Mr. Marshall is also acquiring three smallish property and casualty companies in the United States in what are his first moves into the insurance industry.

He said that his financial advisors had told him that now was a good time to invest in insurance.

"I've been looking at the insurance business for four years now,'' he said.

"The various investment bankers I talked in the US said they thought the insurance cycle was right.

"Rates were low and I was told that it would be an appropriate time to get into the industry.'' NAFG was actually incorporated as a Bermuda company in 1989 by lawyer Mrs.

Lynda Milligan-Whyte.

But it only became operational earlier this year after Mr. Marshall bought the company. NAFG began writing business about four months ago.

NAFG's balance sheet as at June 30, 1992, shows that it had assets of $102.9 million and loss reserves of $1.16 million.

Mr. Marshall, who is in his 60s, has been resident in Bermuda since 1969 and lives at Mizzentop.

He said he made his money from banking, spending 25 years with the Bank of Nova Scotia, and the financing industry, which he has been involved with since the early 1970s.

In his career as a banker, he has worked throughout the Caribbean, including Jamaica, Antigua, the Bahamas, Trinidad and even Cuba, before the revolution which swept Fidel Castro into power.

Mr. Marshall's last banking position was as manager of the Bermuda National Bank (BNB), which was 40 percent owned by the Bank of Nova Scotia and 60 percent owned by Bermudian interests. BNB was later bought out by the Bank of Butterfield.