Bermuda-based Castlewood Holdings has bought reinsurance writer Inter-Ocean Holdings Ltd. in a deal worth $57 million.

Inter-Ocean owns two reinsurers, one based in Bermuda the other in Ireland, both of which are in run-off.

Castlewood, which specialises in acquiring and managing insurers and reinsurers in run-off, has been providing management services to Inter-Ocean for the past 11 months.

The deal is subject to approval by regulator the Bermuda Monetary Authority and ?is expected to be financed by approximately $24.5 million of new bank debt and available cash on hand?, said a statement from Castlewood. The transaction is expected to close during the first quarter of this year.

Inter-Ocean has been subject to regulators? investigations into companies? use of finite reinsurance.

Investigations into a reinsurance deal, which Inter-Ocean entered into in 2001 with Renaissance Re, resulted in three top Renaissance Re executives facing civil fraud charges. Renaissance Re also acknowledged the deal was improperly booked and adjusted its earnings statement accordingly and is believed to be negotiating a multi-million-dollar settlement with the Securities and Exchange Commission.

Castlewood is partly owned by the Enstar Group of Montgomery, Alabama, which owns around half of Castlewood?s voting stock. And the two companies are reportedly in the process of merging their interests into a Bermuda-based holding company, after which Enstar will become a wholly-owned subsidiary of Castlewood.

Castlewood and its subsidiaries have a considerable track record in acquiring companies in run-off.

Two months ago a subsidiary of Castlewood completed the acquisition of Unione Italiana (UK) Reinsurance Co. Ltd., a UK company, for $17.2 million.

A month earlier, Castlewood acquired Cavell Holdings Ltd., a UK company, from Dukes Place Holdings L.P., for $60 million. Cavell owns a UK and a Norwegian reinsurance company, both of which are in run-off, ratings agency A.M. Best reported.

Going back further, in 2004 a Castlewood subsidiary acquired Turegum Insurance Co., a London-based reinsurer in run-off since 1992, from Zurich Financial Services Group. Before that, Castlewood and Japan?s Shinsei Bank Ltd. jointly acquired Toa Reinsurance Co. (UK) Ltd.. Castlewood took a 50.1 percent stake in Toa Re UK, and Shinsei, a Tokyo-based bank, acquired the rest.