Hamilton, Bermuda-based Flagstone Reinsurance Holdings Limitedsaid it will restructure its global reinsurance operations, mergingtwo of its wholly owned subsidiaries.

Flagstone said it plans to merge Flagstone Reinsurance Limitedof Bermuda into Flagstone R?assurance Suisse SA. The two units willbe named Flagstone R?assurance Suisse SA.

The carrier said the change will provide clients and the marketa solid, single capital base to support Flagstone's reinsurancebusiness, while offering a choice of either Bermuda or Switzerlandunderwriting access for full participation in both Bermuda marketand the global markets served in Switzerland.

“This restructuring consolidates our capital in one mainoperating entity, maximizing our capital efficiency andcreditworthiness,” Mark Byrne, Flagstone's chairman, said in astatement. “Furthermore, Swiss companies, like Bermuda companies,are expected to obtain 'passport' rights throughout Europe forreinsurance. We remain committed to Bermuda as an operatingplatform and a key marketplace. We have approximately 50 employeesin Bermuda and expect that figure to grow over the years.”

Total underwriting capital is estimated to be $1.6 billion proforma as of Sept. 30, 2008, Flagstone said.

The company said the change would not result in any changes ofmanagement, corporate control, or to the board of directors.

The Flagstone reinsurance platform remains under the ownershipand control of Flagstone Reinsurance Holdings Ltd. It does notaffect its listing on the New York Stock Exchange or its domicileas a Bermuda company.

The restructuring is subject to various regulatory approvals andrating agency affirmation of ratings, the company said.