In addition, the company will run off Converium Reinsurance North America and replace it essentially with a new unit known as Converium Insurance North America (CINA) that will be bolstered with $350 million of additional capital and granted a parental guarantee from Zurich-based Converium AG.

"These steps will represent the most painful part of the process," said company Chief Executive Officer Dirk Lohmann. "There will be a loss of jobs in North America."

But he said there would be no changes in top management of the North American operation, asserting that many of the problems dealt with market conditions in general, rather than specific company actions.

The company will seek to commute business from the old CRNA unit, but Mr. Lohmann said there could be no guarantees that it would not fail.

"In the interests of our shareholders we have to be cautious," he said.

On July 27 the company announced a reserve strengthening of $385 million, along with a six-month net loss of $594.3 million. The move was described as one to address pre-IPO legacy business of the company's U.S. casualty covers.

Company officials disputed about $50 million of the Tillinghast shortfall estimate focusing in on the area of the directors and officers and errors and omissions covers in 2002 following the sharp rate hikes in the aftermath of the Enron-WorldCom scandals.

The company said it plans on a rights offering worth $420 million underwritten by a syndicate led by Credit Suisse First Boston and J.P. Morgan. The move is seen as necessary to obtain the key A-level ratings from Standard & Poor's and Moody's for the new North American operation.