Hamilton, Bermuda-based Flagstone Reinsurance Holdings Limited said it will restructure its global reinsurance operations, merging two of its wholly owned subsidiaries.

Flagstone said it plans to merge Flagstone Reinsurance Limited of Bermuda into Flagstone R?assurance Suisse SA. The two units will be named Flagstone R?assurance Suisse SA.

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

“This restructuring consolidates our capital in one main operating entity, maximizing our capital efficiency and creditworthiness,” Mark Byrne, Flagstone's chairman, said in a statement. “Furthermore, Swiss companies, like Bermuda companies, are expected to obtain 'passport' rights throughout Europe for reinsurance. We remain committed to Bermuda as an operating platform and a key marketplace. We have approximately 50 employees in Bermuda and expect that figure to grow over the years.”

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

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

The Flagstone reinsurance platform remains under the ownership and control of Flagstone Reinsurance Holdings Ltd. It does not affect its listing on the New York Stock Exchange or its domicile as a Bermuda company.

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