will accumulate capital for investment in the insurance industry.

The fund, Insurance Partners LP, which is being set up now, has a $200-million commitment from three prime backers.

The fund has been set up to exploit acquisition and investment opportunities in the fast-changing worldwide insurance market.

Aside from Centre Re, the other partners are investment company Keystone Partners, formerly The Robert Bass Group, and the Chase Manhattan bank.

The partners are proposing to raise between $400 million and $500 million from other institutional investors by October or November.

The New York-based investment advisory company managing Insurance Partners LP, International Insurance Advisors, is affiliated with Centre Re. An industry source said the company is currently raising capital for the fund and exploring ways of investing the capital.

The prime aim of the fund appears to be investing in the US insurance market, although the partners have not ruled out the possibility of spending corporate capital in the Lloyd's and Bermuda markets.

The Keystone and Centre Re partnership began in 1990 when the pair acquired the National Reinsurance company from Lincoln National.

The fund is believed to be in the process of buying a London market company Union American.

Insurance Partners LP is reported to have made a bid for the reinsurance arm of the Prudential Insurance Company of America, but Prudential has now decided not to sell.