Genstar Capital Management, LLC, a middle market private equity firm announced Wednesday that it has partnered with insurance industry veteran David M. “Mac” Armstrong to set up an earthquake insurer.

Palomar Insurance Holdings, funded with $75 million of equity capital from Genstar and the management team, will initially serve as a pure-play provider of commercial and residential earthquake insurance.

Genstar Capital focuses on investments in selected segments of the financial services, software, healthcare, and industrial technology industries, the announcement revealed.

Armstrong is the former President of Arrowhead General Insurance Agency, Inc., a program administrator with over $800 million in written premium. He will lead Palomar as chief executive officer.

Concurrent with the investment, Palomar Insurance Holdings acquired an admitted insurance company from a national insurer that is licensed to underwrite business in seven states and subsequently changed the name to Palomar Specialty Insurance Company (“Palomar”).

Palomar initially will focus on the residential and commercial earthquake markets in quake-exposed states such as California, Oregon, Washington and Missouri where consumers tend to have limited options to purchase earthquake insurance.

Joining Armstrong on the management team are President Heath Fisher, Chief Underwriting Officer Andrew Robinson and Chief Operating Officer Jon Christianson.

Palomar’s board of directors includes Armstrong, two members of Genstar Capital, Mr. Clark and Geoff Miller, as well as independent director Tom Hutton, the former Chief Executive Officer of Risk Management Solutions and White Mountains Re.

The company will also be advised by Dennis Chookaszian, the former CEO of CNA Insurance; Bob Dowdell, the former CEO of Marshall & Swift; and Richard Taketa, President of York Risk Services Group.

Palomar has received a financial strength rating of A- (excellent) from A.M. Best Company with a stable outlook.

Palomar will distribute its product through a network of program administrators as well as selected retail producers and wholesale brokers.

Genstar’s other investments in the insurance industry include Acrisure, a leading Midwest retail insurance brokerage; Insurity, a leading provider of policy administration software solutions for the property and casualty insurance industry; Granite Global Solutions, a leading Canadian provider of risk mitigation services to insurance and corporate clients; and Innovative Aftermarket Systems, a premier marketer, administrator and underwriter of vehicle protection products and related services sold through automobile dealers. In 2012 Genstar sold Confie Seguros, a leading national insurance distribution company primarily focused on the insurance needs of the Hispanic consumer, after growing the company from a single platform of 30 stores at its inception to more than 300 retail locations today and more than $200 million in revenue.

Genstar has more than $3 billion of committed capital under management and targets investments focused on selected sectors within the financial services, software, healthcare, and industrial technology industries.