Bermuda-based Quanta Capital Holdings Ltd. yesterday announced it has formed a joint venture called Pembroke JV Ltd. with Lloyd's insurer Chaucer Holdings.

The new entity will own Pembroke Managing Agency Ltd., which has received authorisation from Lloyd's of London and British regulators to manage Lloyd's Syndicate 4000.

Since last year, Quanta's insurance and reinsurance lines besides Lloyd's have been in run-off.

A statement from the Bermuda company said yesterday that Quanta's capital remained committed to Syndicate 4000 through 2009. Additionally, Chaucer and Quanta will work closely together to continue to diversify the provision of capital to the Syndicate to support its presence and profitable growth in the Lloyd's market.

Chaucer has agreed to provide the capital to support 10 percent of the Syndicate's underwriting in 2007 and to support underwriting in 2008 and 2009.

Syndicate 4000 underwrites a portfolio of specialist lines products, such as financial institutions, management liability, professional liability, fine arts and kidnap and ransom.

James Ritchie, Quanta's executive chairman, said: "This is a critical step towards solidifying Pembroke as a managing agency. It reiterates our commitment to providing Syndicate 4000 and its team of underwriters with the financial resources it needed to maintain a competitive presence in the Lloyd's market.

"We believe that the start of diversification of the capital base and added technical support from Chaucer will strengthen the Syndicate's growth platform, and today's announcement is a step forward in Quanta's continued capital preservation efforts."

Quanta has been accused of violating US federal securities laws in a class action lawsuit filed in the US District Court in New York. Several US law firms have announced their involvement in the action on behalf of those who bought Quanta shares during the class period — between December 14, 2005 and March 2, 2006.

The filing claims that Quanta had issued a series of materially false and misleading statements to the market during the class period which had artificially inflated the Bermuda company's stock price.