Max Re Capital Ltd. today announced that it will join the listof Bermuda companies that have set up excess and surplus linesplatforms in the United States.

With plans to launch a proposed new subsidiary in the firstquarter, Max Re said the new company, Max Specialty InsuranceCompany, will be based in Richmond, Va., and will have offices inAtlanta, San Francisco and Philadelphia.

Max Re said that Max Specialty is expected to operate across twodivisions--a brokerage division and a managing general agencydivision--and that the divisions will offer property, inlandmarine, casualty, excess liability and umbrella insuranceproducts.

Stephen J. Vaccaro Jr. will join Max Specialty as its presidentand chief executive officer, the company said. Mr. Vaccaro, a30-year insurance industry veteran, was previously with EssexInsurance Company, an affiliate of the Markel Corporation, from1993 to 2004.

In a statement announcing the launch, W. Marston Becker,chairman and chief executive officer of Max Re Capital, said: "Welook forward to the launch of Max Specialty, which will add asignificant new distribution channel and base of potential clientsto Max Re Capital's global insurance and reinsurance businesses,and enable us to provide a broader range of insurance products andservices to customers in the United States and around theworld."

Mr. Becker noted that the E&S segment of the insurancebusiness has been the industry's fastest-growing segment for twodecades. He said the new subsidiary will enhance Max Re's abilityto generate underwriting profits and produce a growing anddiversified book of business.

Max Re said the brokerage division of Max Specialty will beheaded by Jonathan Hahn, and the MGA division will be headed byBryan Sanders.

Mr. Hahn has more than 15 years of insurance industryexperience. He has worked at Markel since 1995 with responsibilityfor growing the excess property book there.

Mr. Sanders, Max Re said, has more than 25 years in the E&Sinsurance business and has experience in building and developing anational wholesale operation.

Mr. Becker, who became CEO in mid-November, also has a longhistory in the specialty lines arena, in addition to holdingleadership roles at reinsurance companies. Mr. Becker was appointedCEO of Max Re in mid-November, replacing Robert Cooney, whoresigned when the reinsurer announced an internal investigation ofsome finite reinsurance contracts.

Max Re was originally launched in 2000 with a business modelthat focused on writing structured or finite business and anontraditional investment strategy. In 2005, the company began toshift gears in its insurance portfolio by entering the traditionalproperty reinsurance market.

With the launch of an E&S operation, Max Re is not alone inexpanding its strategy to encompass U.S. specialty lines. OtherBermuda players involved in the E&S segment include ACELimited, XL Capital, RenaissanceRe, Aspen Holdings, Arch Capitaland Everest Re.