Bermuda insurers ACE and XL Capital are in the hunt for pieces of General Electric's insurance business, according to the New York Post.

US industrial giant GE is in talks with possible buyers about its financial guarantor unit and its life reinsurance unit, which is part of its money-losing reinsurance subsidiary Employers Re, the newspaper said.

The move comes as GE looks to unload subsidiaries that fail to meet a 20 percent return on equity standard.

The Post said GE has retained Goldman Sachs Group to advise on a potential sale of Financial Guaranty Insurance Co., whose basic business is insuring municipal bonds. The investment bank has begun quietly approaching possible buyers, people familiar with the situation told the newspaper.

"Parties interested in GE's Financial Guaranty Insurance Co. unit include competitors Ambac Financial Group, MBIA Inc. and Radian Group.

"Financial Security Assurance, owned by Franco-Belgian lender Dexia, and Bermuda-based property/casualty insurer XL Capital Ltd. might also take a look. The unit has a book value of $2.2 billion."

However, FGIC might sell for less because some of its publicly traded peers trade at a discounts to their book value. FGIC provides financial guaranties for debt securities, focusing on municipal bond insurance for debt issued in the primary market or traded in the secondary market.

A GE spokesman told The New York Post: "We're constantly evaluating our portfolio of businesses."

The newspaper also reported that both ACE and XL may be interested in buying Employers Re's life reinsurance division. GE has retained Morgan Stanley to handle that sale.

Other potential buyers in that deal include Swiss Re and Met Life's Reinsurance Group of America.

"But there is no guarantee that the Life Reinsurance business, which has an estimated book value of roughly $2 billion, will be sold," the newspaper said. "Sources say buyers are skittish about purchasing reinsurance because of potential contingent liabilities the buyers may have to make payments on later."

"Not many buyers will have the stomach to buy a life reinsurance business right now," a banker familiar with the business told the newspaper.