Gerova Reinsurance Ltd. has won approval from regulator Bermuda Monetary Authority to establish a new life reinsurance operation on the Island.

The company will be headed by Lou Hensley, chief executive officer of the reinsurer's parent Gerova Holdings Ltd., which has recently incorprated on the Island.

The company is a subsidiary of international specialty reinsurer Gerova Financial Group.

Gerova's new home will be a 2,300 square-foot space on the fifth floor of Cumberland House.

Mr. Hensley told The Royal Gazette: "Bermuda is a heavily respected domicile as far as reinsurance goes and there's a lot of talent on the Island."

He added that the BMA's effort to achieve regulatory equivalence with the new standards set to be introduced in the European Union - known as Solvency II - added appeal to the Island as an insurance domicile.

"Bermuda is taking action to adopt Solvency II and so when we carry out transactions in Europe, we should not have problems," he said.

He said the company's initial focus would be on reinsuring fixed annuity products and variable annuities further down the line.

"We submitted our business plan to the BMA last week and we received approval yesterday in writing," Mr. Hensley said.

"We hope to start writing business by late this month or early next month. Until we hire staff, we'll outsource some operations to third parties."

Mr. Hensley, who was hired by Gerova on March 23, has more than 20 years' experience in the insurance industry.

He was an executive of Wells Fargo's Bermuda-based reinsurance subsidiary, Union Hamilton Reinsurance Ltd., and helped it to grow from a start-up to a multi-billion dollar reinsurance company.

He was the co-founder of Pivot, an insurance-focused technology company, which he sold to Wachovia/Wells Fargo.

He also held senior executive positions with Jackson National Life, an $87 billion subsidiary of Prudential plc., with Swiss Re affiliate The Midland Life Insurance Company, and with Conseco.

Gerova Holdings is a subsidiary of the Gerova Financial Group, which was incorporated in the Cayman Islands in January "to take advantage of opportunities arising from financial market dislocations", the company said at the time.

In addition to underwriting, Gerova makes what it describes as high-yield senior secured commercial loans to middle market companies in select industries.

At the time of its January 2010 public listing, Gerova acquired some $650 million in equity capital, including an existing loan portfolio at what the company believed was a significant discount from its value.