Bermuda-based Chartis has announced that it has entered into a reinsurance transaction with Lodestone Re, which will provide $450 million of protection to Chartis against US hurricanes and earthquakes.“This represents a substantial increase from the $250 million of protection originally sought by Chartis,” said the bulletin. “To fund its obligations to Chartis, Lodestone Re issued a catastrophe bond in two tranches - $125 million of Class A-1 notes and $325 million of Class A-2 notes.”Lodestone Re is a special purpose insurer, incorporated under the laws of Bermuda, which has established a programme structure enabling potential future catastrophe bond issuances.The transaction, which closed on December 20, provides Chartis with “fully collateralised coverage against losses from US hurricanes and earthquakes on a per-occurrence basis through December 2013 using an index trigger with state-specific payment factors”.Risk analysis for the transaction is based on Risk Management Solution’s (RMS) Hurricane Model Version 9.0 and RMS North America Earthquake Model Version 9.0.The new transaction follows Chartis’ earlier reinsurance transaction with Lodestone Re, which closed on May 12, 2010 and provided $425 million of protection to Chartis against US hurricanes and earthquakes on a per-occurrence basis until May 2013.