The second coverage provides $67.5 million of annual aggregate reinsurance for losses resulting from certain earthquake, hurricane, tornado and hailstorm events within the continental United States.

Goldman, Sachs & Co. acted as sole book runner and lead manager for the transaction and BNP Paribas served as co-manager, The Hartford said.

Risk Management Solutions provided the modeling services in support of the transaction and will serve as the calculation agent for Foundation Re II, the insurer explained.

Jeff Berg, a Moody's Investors Service said there were tax advantages in using the Caymans for the transaction. Whether the deal made The Hartford a better company is debatable, he said.

In Mr. Berg's view, the arrangement is interesting because it involves two different types of coverage--individual risk and aggregate coverage

He said this was a complementary program to an earlier one involving Foundation I. Although the company announced it as a complementary arrangement, Mr. Berg wondered whether it involved replacement coverage or over and above. "Existing programs change over time," he noted.

The deal also demonstrates the growing trend to use risk-linked securities, he said, noting an increase in sales of catastrophe bonds in the marketplace since reinsurers suffered major 2005 losses from Hurricane Katrina

Mr. Berg said the continuing development of alternative mechanisms to reinsure is a good thing, "There's competition between capital markets and traditional reinsurance."

The Hartford had 2005 revenues of $27.1 billion.

Thomas Upton, managing director of Standard and Poor's financial services ratings for North American Insurance, said given the size of The Hartford, the transaction should have no material effect on the company. "With The Hartford it's not a big number," he said.