The Bermuda Stock Exchange (BSX) has approved of the listing of Merna Reinsurance II Ltd. Principal-at-Risk Variable Rate Notes – due on April 8, 2013.

The notes were issued under the BSX's restricted marketing provisions for qualified investors and its listing regulations for international issuers of insurance related securities, effective from March 31, 2010.

Merna Reinsurance II, the issuer, is a Special Purpose Insurer formed in accordance with the Bermuda Insurance Act 1978, as amended.

The purpose of offering the notes is to raise capital to deposit into the collateral account to provide the issuer with funds to support its obligations under a reinsurance agreement with State Farm Fire & Casualty Company, the ceding insurer, including its obligation to fund the reinsurance trust account.

Merna Reinsurance II Ltd. was incorporated in Bermuda as an exempted company and its registered office is at Clarendon House, Church Street, Hamilton.

The Principal At-Risk Notes provide the Issuer with funds in order to support its obligations under the respective risk transfer contracts it enters into with the risk Transfer contract counterparty. The $350,000,000 Principal-at-Risk Variable Rate Notes are exposed to loss events and are subject to extension by State Farm Fire & Casualty Company.

First Bermuda Securities Ltd. sponsored the listing of the notes.

James McKirdy, chief compliance officer of the BSX said: "We are delighted to welcome Merna Reinsurance II Ltd. Principal-at-Risk Variable Rate Notes – due April 8, 2013 to the official list of the BSX.

"The BSX listing regulations for international issuers of insurance related securities are specifically designed to facilitate the listing of notes that are offered to institutional and sophisticated qualified investors.

"This is another example of these securities that have taken advantage of the Exchange's listing regulations for insurance related securities and we are extremely pleased to be working with Merna Reinsurance II Ltd."

Michael Schroter, of First Bermuda Securities, said: "It has been a pleasure to assist in bringing another listing of this type to The Exchange. The co-operation and assistance of the BSX officers made it a very smooth exercise."