its insurance operations to Argus Insurance Company.

The sale is the second major deal in recent months for LPG, which merged its deposit taking company and real estate division with the Bank of Bermuda to form Bermuda Home earlier this year.

All of LPG's insurance business, including the agency for Commercial Union Assurance Company plc, will be transferred to Argus July 1.

Argus will then hold the agency for the London company that handles the property insurance for the Bermuda Government.

The transfer will include the move of the six staff to Argus which the principals believe will lead to a smooth transition for clients and personnel.

The two companies in a joint press statement said: "The operation of the insurance business under this agreement will continue unchanged for the time being and Argus looks forward to its further growth and to other areas of business development with Commercial Union, including captive management.

"This acquisition by Argus effectively doubles its involvement in the local property market and adds significantly to its captive operations.'' The agreement was signed by LPG president Mr. David Gutteridge and Mr. John Sainsbury, managing director of Argus.

The sale leaves LPG with just a travel office that it now run out of a Church Street office, the American Express agency and its holding in Bermuda Home Limited.

Mr. Gutteridge said: "We (LPG) had an opportunity to participate in a formation of a new financial services company, Bermuda Home. We merged together with the bank (Bank of Bermuda) on that. The insurance operation was not a part of it.'' "I had given a commitment to Bermuda Home to participate in that venture,'' said Mr. Gutteridge, who is deputy chairman of Bermuda Home. "It was a question of you can't run too many shops and be too split up.

"It became apparent that the prudent thing to do from our point of view and possibly Commercial Union's too, was to transfer the business to somebody who could dedicate full time management to it. I discussed that with Commercial Union and they were agreeable to that idea and we thought we should proceed along those lines.'' Overtures were made to LPG by more than one company about Commercial Union's future as early as several weeks ago. It appeared to be no secret after the Bermuda Home deal was announced that LPG would not try to hold on to the Commercial Union agency.

The two companies eventually only met about a handful of times for negotiations.

Mr. Sainsbury said that it is a composite deal with four years to run its complete course, with contingencies involving the continued business.

He said: " In terms of the property market, we've probably now got 16 to 20 percent of the market with BF&M remaining in the premier position.

"In terms of the captive operations it adds roughly 20 per cent in fees. But there are also opportunities that it opens up in Europe for captive management. There are already a number of those out of the UK and we hope to develop that business possibly more aggressively and energetically than it has been done in the past.''