David Fox reports Bermuda domiciled Centre Reinsurance Holdings Ltd., is buying Massachusetts Casualty Insurance Co., an individual disability income (IDI) insurer, from the US unit of Sun Life Assurance Co. of Canada.

Centre Re, parent to Bermuda-based Centre Solutions, has signed a definitive agreement for the purchase with Mass. Casualty's parent, Sun Life US, contingent upon regulatory approval.

Mass. Casualty principally writes IDI insurance throughout the US, but after the acquisition, Centre Solutions will treat Mass. Casualty's existing IDI writings as a closed block of business that will continue to be serviced.

In addition, Centre Solutions plans to use the vehicle to provide a variety of innovative life and health insurance and reinsurance based solutions to US clients. Centre Solutions' CEO David Wasserman commented, "The purchase reflects our belief that solutions can take many forms.

"When we heard that Sun Life wanted to exit the business through a sale of Mass. Casualty, we worked with them to find a mutually acceptable transaction.

"This purchase worked for Sun Life because they wrote all of the business in a separate legal entity. "For other companies, a purchase is not necessarily a viable solution and, therefore, reinsurance or some other financially oriented solution would be needed.'' "We see this transaction as part of a larger strategy of acquiring books of business that can, with active management and the ability to take risk, be serviced efficiently,'' said Centre Solutions chief technical officer Frank Pierson.

"In addition, we believe that more and more companies will realise that previously desirable business units are no longer strategic or core businesses. This reappraisal will come from increased competitive pressures, mergers and acquisitions and demutualisation activity.'' Mr. Pierson will become Chief Executive Officer of Mass. Casualty after the purchase.

As part of the acquisition, the servicing of Mass. Casualty's IDI business will be managed by Disability Management Services, a Centre Solutions affiliate and an experienced third party disability claims administrator.

In addition to this transaction, Centre Solutions has entered into other similar arrangements covering IDI, and property & casualty insurance including asbestos & environmental liabilities.

"This is a win-win scenario for Sun Life and us,'' said Centre Solutions senior vice president Eileen Sweeney, who will become president of Mass.

Casualty following the acquisition.

"Sun Life is able to meet its strategic goals while Centre Solutions acquires an on-shore presence that will serve as a platform for future opportunities in the life and health field.'' Senior vice president and general manager for Sun Life's US operations, Jim Prieur said, "When we determined that individual disability insurance was not a business line that fit into Sun Life's strategic direction in the US, our goal was to find a suitable buyer that could absorb the Mass. Casualty business with minimum disruption to our policyholders. "We found that provider in Centre Solutions.'' And Mass. Casualty. president James McNulty said, "While Sun Life has valued the Mass. Casualty business, we are pleased that the organisation we are selling the business to, has a respected, established presence in the financial services marketplace.'' Headquartered in Boston, Mass. Casualty has served the individual disability insurance needs of its clients since 1926. Sun Life purchased the company in 1987.