NU Online News Service, Dec. 9, 3:36 p.m.EST

Specialty insurer Torus said today its parent, First ReserveCorp., has agreed to merge it with the business of its other majorinsurance investment vehicle, Sideris Re--a firm in which MauriceGreenberg holds an interest.

Bermuda-based Sideris is a partnership between C.V. Starr, theinvestment vehicle headed by Mr. Greenberg, and First Reserve.

Sideris Re Holdings (Sideris Re) owns a Bermudian class 3reinsurer and provides the capital supporting Lloyd's energysyndicate 2243. Torus said it will be combined within TorusInsurance Holdings, which was established in 2008 with $720 millionof capital backing from First Reserve Corporation.

The addition of Sideris Re will increase Torus' capital by about$79 million, Torus said in a statement.

Syndicate 2243 writes a worldwide portfolio of upstream andoffshore energy risks as well as non-U.S. and Canadian onshorebusiness. This business is written under an agreement with StarrManaging Agents Limited, Torus said. SMA is a subsidiary of C.V.Starr & Co. Inc.

A.M. Best Co. in Oldwick, N.J., said today that its ratings ofTorus Insurance Holdings Limited (Torus) (Bermuda) and itsoperating subsidiaries remain unchanged following the contributionof Sideris Re Holdings Ltd to Torus by First Reserve Corporation(the sole shareholder of Torus).

Best said SRH owns 100 percent of First Reserve Corporate MemberLimited (to be renamed Torus Corporate Capital Limited), whichprovides 100 percent of the underwriting capacity of Lloyd'sSyndicate 2243.

Although this transaction "represents a departure from thegroup's original plans for 2009-2010," Best said it believes theconsolidated risk-adjusted capitalization of Torus will remainstrong.

The rating agency said the transaction is sufficient to supportSyndicate 2243's agreed capacity for 2010 of ?43 million ($70.1million). Syndicate 2243 writes a joint book of energy businesswith Lloyd's Syndicate 1919, with a 22 percent share of Syndicate1919's international onshore energy business and a 38.875 percentquota share of Syndicate 1919's worldwide offshore energy book.

Both Syndicate 2243 and Syndicate 1919 are managed by StarrManaging Agents Limited., A.M. Best said.

Commenting on the merger Mark McComiskey, managing director,First Reserve Corporation, said, "The amalgamation of our insuranceoperations, under the management of Torus, is a logical step forall parties."

Clive Tobin, Torus' chief executive, said the "Sideris businesscomplements our own existing energy portfolio, increasing ourunderwriting flexibility and underlining a growing commitment toserving clients in this sector."