reinsurer's operations on the Island and transfer business written through the company to the United States.

And as many as nine people could lose their jobs as a result of the shut-down.

The Canadian company Fairfax Financial announced plans last week to place the Bermuda subsidiary into run-off, which it acquired in 1997 along with Odyssey Re (London). The two companies were together formerly known as Sphere Drake Underwriting Management. The decision comes after a worldwide reorganisation was announced last year following the acquisition of TIG Re, a Texas-based Reinsurer, and the subsequent closure of Odyssey's London operations in May of 1999.

At the time, the group's then-chief financial officer in Bermuda, Richard Gray, insisted that the changes would not affect Bermuda operations "in the immediate future''.

According to last Tuesday's edition of Insurance Day, analysts have said that it was unlikely that the closure of Odyssey Re (Bermuda) would result in Fairfax writing substantially less business. Fairfax plans for all business previously written in Bermuda to be transferred to Odyssey America Reinsurance Corporation.

They also noted that Fairfax's existing reinsurance coverage would be sufficient to cover against possible loss developments.

The ratings agency Standard & Poor's told the industry publication that current policyholders would be protected by "external and internal reinsurance agreements, Fairfax's representation that all legitimate policyholder liabilities will be honoured and the strong financial flexibility of Fairfax''.

Odyssey Re Bermuda, established as Sphere Drake in 1948, wrote traditional and alternative reinsurance and specialised insurance, mainly to US-based clients.

Odyssey Re office to close In 1998 -- prior to the shutdown of the London operations -- combined net premiums of the two companies stood at $216 million in 1998. At the end of that year, the company had capital and surplus of $324.6 million, with 219 employees.

A lawsuit by Odyssey Re against Bermuda-based Stirling Cooke Brown Holdings remains outstanding in the UK.

Odyssey Re claims that the company engaged in a fraudulent scheme to "improperly extract millions of dollars in commissions in fees'' on business it brokered. The company wants to have several reinsurance contracts voided on the basis that they were drawn up fraudulently.

The suit was dismissed by the US District Court for the Southern District of New York after it was filed a year ago.

A spokesman for Odyssey Re could not be reached for comment before press time.

Fairfax is also the parent of CRC (Bermuda) Reinsurance, a major reinsurer of Lombard Insurance.