Bermuda-based Mutual Risk Management has been lured by the growing market for offshore variable annuity and variable life insurance products, and has planned a series of initiatives to expand its financial services business.

They include the formation of a new Bermuda life insurance company, MRM Life Ltd., a wholly owned subsidiary offering variable life insurance products in Bermuda, working in conjunction with major US and international financial institutions.

MRM Life was set up in January under the MRM Life Ltd. Act, which allowed the company to segregate reserves, for more buyer security.

Mutual Risk will enter in a series of transactions with Tremont Advisers, Inc.

of New York, a company which just last month became a broker-member of the Bermuda Stock Exchange through local subsidiary, Tremont Capital. The local affiliate, offshore hedge fund advisors Tremont (Bermuda) Ltd., established offices on Park Road in Hamilton three years ago.

Tremont provides consulting and specialised investment services to investment funds, investment managers and high net worth individuals. The company also manages and sponsors a number of proprietary investment funds and maintains a relationship with well established offshore hedge fund managers.

Tremont has used its Bermuda subsidiaries to develop a number of offshore life insurance and annuity programmes.

A Mutual Risk subsidiary will also acquire up to 20 percent of the outstanding Class B Common Shares of Tremont Advisers, through an offer to the existing shareholders of the company at $3.75 per share and the purchase of shares directly from Tremont Advisers. Tremont has about 3.8 million shares outstanding.

Mutual Risk will also acquire 51 percent of Cayman Island-based Tremont International Insurance Co., which Tremont recently opened to write offshore variable life insurance products.

Mutual Risk will invest up to $5 million in the company, which is to become a subsidiary in MRM Life Ltd., through a preferred share investment, to provide capital to support new business.

Mutual Risk will also enter into an agreement with Tremont to jointly market offshore variable life insurance products utilising investment in offshore hedge funds. Mutual Risk will invest $1 million in this venture to provide capital to allow this business to develop.

Financial services is Mutual Risk's newest business segment, which is being built on the acquisition of The Hemisphere Group Ltd., which provides administrative services to offshore mutual funds and other companies.