in Mid Ocean Reinsurance, a huge new firm being set up in Bermuda, it was revealed yesterday.

More details about Mid Ocean have been made available in the run up to an extraordinary general meeting of EXEL's shareholders on August 31 when they will be asked to approve the investment.

EXEL is looking to buy a stake of not more than 32.3 percent of Mid Ocean's common stock for a maximum price of $100 million.

This figure would represent no more than 3.7 percent of EXEL's total assets and 6.8 percent of its net worth based on its balance sheet of May 31, 1992.

EXEL has confirmed a report in The Royal Gazette last week that its chairman Mr. Ian Heap will become chief executive officer of Mid Ocean.

Two other EXEL board members, Mr. Robert Clements and Mr. Roberto Mendoza, will become directors of Mid Ocean.

Mr. Clements is president of giant US broking group Marsh and McLennan and Mr.

Mendoza is vice chairman of investment bank J. P. Morgan.

An unnamed former officer of Marsh and McLennan will serve as Mid Ocean's chairman.

It is believed that Mr. Michael Kevany, head of EXEL's main operating body, Bermuda-based X.L. Insurance, will take over as chairman of EXEL once Mr. Heap resigns. Mr. Brian O'Hara, Mr. Kevany's number two in Bermuda, is expected to take over X.L.

M&M and Morgan will each buy a ten percent stake in Mid Ocean. They are currently trying to raise start up capital of $300 million to get the company off the ground.

For their services, M&M will be paid 1.2 percent of the gross proceeds from the sale of Mid Ocean's shares, which will amount to about $3.7 million.

Morgan will get 0.8 percent of the gross proceeds, which will be approximately $2.5 million.

On top of this, M&M and Morgan will be given options to buy shares in amounts equal to 7.2 percent and 4.8 percent, respectively, of the fully diluted outstanding common stock of Mid Ocean at the time of exercise of the options.

The options are intended to be ten-year options at an exercise price of $100 a share, subject to adjustment in certain events, including the distribution of dividends to Mid Ocean shareholders.

Mid Ocean is seeking subscriptions for 3.1 million shares at a price of $100 a share, with the minimum subscription being $10 million.

Mid Ocean will write worldwide reinsurance business specialising substantially in property catastrophe reinsurance at the outset.

It also intends to engage in quota share reinsurance of selected Lloyd's syndicates. The company's business will be generated through independent reinsurance intermediaries.

A notice by EXEL to its shareholders said: "Mid Ocean believes that recent loss occurrences in the property catastrophe insurance market place have resulted in a significantly increased demand for property catastrophe reinsurance and a significant contraction of available reinsurance capital.'' Mr. Ian Heap.