Insurer and pension provider The Argus Group has agreed in principle to buy the Bermuda offshore insurance affiliate of Tremont Group Inc. in a move the company says will position subsidiary Bermuda Life Insurance Company Ltd. as a leading offshore insurance provider in this area.

Terms of the deal, which is expected to be concluded on November 30, were not disclosed.

Tremont International Insurance Limited, which is based in Tremont House on Park Street in Hamilton, offers variable annuities and life insurance products with a focus on hedge fund investment strategies.

Argus Group chief executive officer Gerald Simons said: "We are very pleased to continue to grow our international life insurance business, a business that is not restricted by the limited size of Bermuda. With this acquisition, we believe that we are uniquely positioned to provide the highest level of service that this niche market expects."

TIIL was formed in 1996 by Tremont, which offers hedge fund of funds investment management.

James Selvaggi, president of TIIL, said in a statement: "The sale of TIIL is an opportunity for the Tremont Group to realise a return on its investment in the offshore insurance business.

"Furthermore, it advances the group's strategy to strengthen its global leadership role as a discretionary investment manager of hedge fund of funds products and services among a broad set of institutions, including investment organisations, insurance companies, pensions and endowments."

Under the terms of the deal, Bermuda Life will take over all of the policy issuance and administration functions that comprise TIIL's business, while Tremont will continue to provide investment management services to the existing TIIL policy portfolio.

In addition, Tremont Capital Management will maintain its commitment as a leader in the investment management of insurance-dedicated hedge fund of funds portfolios.

In an interview, Mr. Simons said he could not reveal assets under management held by Tremont or the number of customers it had.

But he said Tremont was a "very significant player" in a highly specialised market and would add to Argus's existing business, which was boosted last year when it bought New York Life Worldwide, which was an important player in the same sector.

Mr. Simons said Argus was interested in the business because it hgave the company opportunities for growth that did not exist in Bermuda's mature and competitive domestic insurance and pension market.

"We are are attracted to it because it is highly specialised and is not restricted to Bermuda," he said, adding he did not believe TIIL had any Bermuda customers.

Mr. Simons said the Tremont operations would move into Hurstholme on Trott Road where Argus Financial and Argus' international life insurance operations are located.

The acquisition is Argus' first in more than a year. It bought Norwich Union's insurance portfolio in Gibraltar and Aviva's Bermuda insurance portfolio in January last year.

Because of the small size and maturity of Bermuda's insurance and pensions markets, all of the Island's insurance companies have been expanding overseas, although both BF&M and Gibbons Group-owned Colonial have expanded more widely in the Caribbean.

In February, BF&M bought the shares it did not already hold in the Insurance Corporation of Barbados Ltd, while Colonial subsidiaries have major presences in the health insurance market in the Bahamas and in the Cayman Islands.