A deal worth up to $4.75 million which will see Montpelier Re's wholly-owned subsidiary Montpelier Re US Holdings buy US excess and surplus company General Agents Insurance Company of America is expected to lead to improved ratings for General Agents, according to AM Best.

Earlier this week Bermuda-based Montpelier Re announced the proposed US expansion having entered into a stock purchase agreement with Texas corporation Gainsco for the acquisition of General Agents. General Agents Insurance Company is a licensed admitted insurer in the State of Oklahoma and is authorized as an excess and surplus lines insurer in a further 37 states although it discontinued writing business in 2002.

AM Best has placed the financial strength rating of B (fair) and the issuer credit rating of "bb" of General Agents under review with positive implications.

In a statement, AM Best said: "Upon completion of the pending transaction and following regulatory approval, a final ratings determination for General Agents will be made. Based on the rating of the acquiring entity, the ratings of General Agents will likely be positively impacted.