Bermuda "Class of 2005" start-up Flagstone Reinsurance Holdings Limited has taken a majority position in Cayman Islands' Island Heritage Holdings Limited.

Flagstone previously had just over a 28 percent stake in the Cayman domiciled Island Heritage Group, which specialises in domestic insurance and insurance services in 16 Caribbean countries and was set up in 1996.

The Cayman Islands insurer was amongst those at the forefront of claims resulting from the devastation caused by category 5 Hurricane Ivan when it barrelled through the Caribbean in 2004.

Other Bermuda interests in Island Heritage comes from Butterfield Bank and Ace Insurance, which remain major shareholders of the Cayman-based insurer.

Further details on the reasons why Flagstone has taken control of Island Heritage is likely to be revealed later this week, with Flagstone due to release its second quarter results first thing on Thursday morning, before the US stock markets open, and hold a conference call at 9.30 a.m. New York time.

Flagstone chairman Mark Byrne is to become the new chairman of Island Heritage Holdings.

In a brief comment Mr. Byrne said: "We are excited to start this new chapter in the Island Heritage story.

"We believe that through technical cooperation with Island Heritage staff, we can further optimise the returns of this business.

"We are pleased that all key members of Island Heritage management, and all strategic shareholders, have chosen to stay involved."

While Flagstone will assume control of the Island Heritage companies there is expected to be further participation in the running of Island Heritage by the local management of the group's companies.

According to a statement released by Flagstone at the end of last week: "This change in control will not alter any of the existing products and services, but over time will enhance service and broaden product distribution."

Property insurance specialist Island Heritage Group currently is rated A- "Excellent" by AM Best.