New 2005 start-up Lancashire Holdings Ltd. is poised to open an office in the United Kingdom to complement its underwriting operations in Bermuda.

The UK Financial Services Authority is ?minded to grant? authorisations for the company to commence underwriting, however before it can accept risks, Lancashire Insurance Company (UK ) Limited must satisfy certain regulatory conditions including payment of required capital ? which the company said would come from existing resources ? and obtaining a satisfactory rating from AM Best. The company said it expects to meet all of the FSA conditions by the end of August.

Assuming authorisation, LUK will initially be capitalised at approximately $37 million rising to approximately $110 million by January 2007.

Lancashire Holdings was launched by former Lloyd?s underwriter Richard Brindle late last year to take advantage of an expected rise in reinsurance rates after last year?s spate of costly hurricanes. The company was backed by private equity firm Capital Z together and Moore Capital.

LUK would be authorised to write the classes of business currently written by the company?s Bermuda Class 4 insurer, Lancashire Insurance Company Limited. It will enter into a quota share agreement for a whole account session of a percentage of risks written in the UK,

Mr. Brindle, chief executive officer and chief underwriting officer, said that while Lancashire has successfully executed its business plan from Bermuda alone, the authorisation will provide the Lancashire Group with increased flexibility and access to a larger pool of quality risks.

?LUK will leverage existing expertise within the Group, including underwriting,? he said adding that there will be no change in the classes written and no change in risk profile, with no change in the senior management team.

?LUK will better allow us to achieve our existing business plan through enhanced management of our underwriting thought the cycle,? he said.

Neil McConachie, group chief financial officer and chief operating officer, said that the company was following a path already taken by a number of Bermuda insurance and reinsurance group and the new UK company would not diminish the role of the Bermuda underwriting platform.

?We see the two operations as complementary. With no change to Group capital overall, LUK will give us choice in the deployment of capital and improved access to our markets via authorisations throughout the European Union,? he said.