on top of its quarterly dividend of $0.3175 a share. The special dividend amounts to a $25 million extra payout to shareholders.

"This dividend is a reflection of the quiet Atlantic windstorm season we have just experienced,'' company chairman Joseph Johnson said in a statement yesterday.

Chief financial officer John Weale said in an interview the decision to pay a special dividend was made after assessing falling rates in the reinsurance market. The board decided on a special dividend rather than using the money for a share buyback or a potential acquisition, as others in the market have done with excess capital.

The company declared a special dividend of $1 per share in April as well.

"If reinsurance premiums continue to drop as they have done for the past 18 months -- and we think they will continue to do so -- then if we were to find an opportunity for acquisition that fitted our criteria we would use the funds for that,'' Mr. Weale said. "And if there were no other opportunity then we would make another special dividend.'' The company decided not to do a share buyback as without American International Group's participation IPC would become a controlled foreign corporation according to US standards. AIG holds 24.4 percent in IPC. An interest of over 25 percent would mean US tax laws would take effect.

The total dividend of $1.3175 per share will be payable on December 18 to shareholders of record on December 2.

IPC Holdings writes mainly property catastrophe reinsurance through its subsidiary International Property Catastrophe Reinsurance Co. Ltd.