Connie Lee Insurance Co. has about $2.5 million of exposure to the Sacred Heart Hospital of Norristown, Pa., which closed its doors last week after defaulting on about $25 million of outstanding bonds.

Connie Lee's exposure to the hospital stems from a reinsurance agreement the firm made with another firm that had reinsured the exposure for Municipal Bond Investors Assurance Corp., the primary insurer on the deal. Connie Lee officials declined to name the original reinsurance company, but sources familiar with the transaction say it was Enhance Reinsurance Co.

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