Jeffrey Greenberg (pictured), former chairman and chief executive of Marsh & McLennan Cos., is proposing to set up a new insurance company in Bermuda with capital from a private-equity firm he and partners are establishing.

Mr. Greenberg?s proposal is one of several such business plans to be put on the table since Hurricane Katrina, people familiar with developments said.

Only two or three new companies are expected to successfully get off the ground in contrast to the dozen or more reinsurance start-ups being founded on the Island after the September 11, 2001 terrorist attacks and 1992?s Hurricane Andrew.

Funding for the fledgling ventures is coming from hedge funds and private-equity firms. (See separate story)

Mr. Greenberg?s proposal is to set up a Bermuda company funded by Aquiline Capital Partners, the private-equity firm he and partners from New York-based Venturion Capital are currently raising money for.

Matt Grayson, Aquiline?s managing director and a co-founder of Venturion, on Friday told by telephone from New York he could not divulge details of Aquiline?s plans until after the fund?s private placement closed. International news reports have reported the possibility of up to $1 billion in new capital being raised by Aquiline. Mr. Greenberg?s interest in setting up a new insurance company comes nearly a year after he stepped down from his posts with Marsh & McLennan.

His departure from the leading insurance brokerage followed New York Attorney General Eliot Spitzer hitting the company with a lawsuit in October 2004 that alleged illegal bid rigging practices between Marsh and several companies it bought insurance from on behalf of customers.

The suit was settled after Mr. Greenberg?s ouster. He has not been accused of any wrongdoing.

Mr. Greenberg?s father, Maurice (Hank) Greenberg, was chairman and chief executive of New York-based American International Group Inc. until this spring.

And Evan Greenberg, chief executive of Bermuda-based insurer ACE Limited, is a younger brother.

Both Jeffrey and Evan Greenberg were at one time in grooming to succeed their father at AIG. Each eventually quit senior posts to pursue opportunities with other companies.

The elder Greenberg was forced from the helm of AIG after nearly four decades amid a probe led by Mr. Spitzer of the commercial insurance giant?s offshore structure and misaccounting of finite reinsurance policies it may have used to mask losses.

AIG and former management, including Mr. Greenberg Sr., are named in a suit brought by Mr. Spitzer alleging practices were misleading to regulators and investors, among other allegations.

If Jeffrey Greenberg succeeds in setting up a new Bermuda insurance venture, the development will effectively make the Island an outpost for the Greenberg insurance dynasty. Evan Greenberg, as head of ACE, controls a Bermuda-based global insurer with a market capitalisation of $14.15 billion.

He divides his time between Bermuda and New York.

And Mr. Greenberg Sr., who makes his home in New York, is the chairman of Starr International Co., a privately-held Bermuda company that counts AIG stock worth about $18 billion as its biggest asset.