<PAGE>

                                   EXHIBIT B-1








                  ---------------------------------------------


                       AMENDED AND RESTATED

                               MANAGEMENT CONTRACT

                                 BY AND BETWEEN

                    PCA PROPERTY & CASUALTY INSURANCE COMPANY

                                       AND

                   HUMANA WORKERS COMPENSATION SERVICES, INC.

                  ---------------------------------------------





                               [________] 1, 2000


<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

SECTION                                                                                                        PAGE

<S>                                                                                                              <C>
1.  Duties of the Manager.........................................................................................1
         1.1  Claims Processing...................................................................................2
         1.2  Loss Statistical Analysis...........................................................................3
         1.3  Premium or Monies Collection........................................................................3
         1.4  Regulatory Liaison..................................................................................4
         1.5  Accounting to the Company...........................................................................4
         1.6  Preparation of Financial Statements; Books and Records..............................................4
         1.7  Retention of Accountants and Actuaries..............................................................5
         1.8  Case Management.....................................................................................5
         1.9  Ministerial Functions ..............................................................................5
         1.10  Information Systems  ..............................................................................5

2.  Limitation of Authority.......................................................................................5

3.  Relationship of the Parties...................................................................................6

4.  Claims Account................................................................................................7

5.  Expenses of the Manager.......................................................................................7

6.  Expenses of the Company.......................................................................................7

7.  Compensation of the Manager...................................................................................8

8.  Term..........................................................................................................8

9.  Budgets and Controls   .......................................................................................9

10.  Covenants ...................................................................................................9
         10.1  Use of Service Fees  ..............................................................................9
         10.2  Notice of Default    ..............................................................................9
         10.3  Conduct of Business  ..............................................................................9
         10.4  Taxes                ..............................................................................9
         10.5  Provision of Medical Care and Service Contracts....................................................9

11.  Licensing and Countersignature Requirements.................................................................10

12.  Amendment & Waivers   ......................................................................................10

13.  Assignment .................................................................................................10
</TABLE>


                                       -i-


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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

SECTION                                                                                                        PAGE

<S>                                                                                                             <C>
14.  Inspections ................................................................................................10

15.  Termination ................................................................................................10
         15.1  Due Cause Defined    .............................................................................10
         15.2  Termination for Breach; Cure Rights...............................................................11
         15.3  Termination With Notice...........................................................................11
         15.4  Remedies Upon Early Termination...................................................................12
         15.5  Additional Agreements Upon Termination............................................................13

16.  Limitation of Liability of the Company and its Agents.......................................................13

17.  Limitation of Liability of the Manager......................................................................13

18.  Special Administrator Provisions............................................................................13

19.  Errors and Omissions Insurance..............................................................................14

20.  Notices ....................................................................................................14

21.  Arbitration ................................................................................................14
         21.1  Resolution of Disputes............................................................................14
         21.2  Composition of Panel .............................................................................15
         21.3  Appointment of Arbitrators........................................................................15
         21.4  Failure of Party to Appoint Arbitrator............................................................15
         21.5  Choice of Forum      .............................................................................15
         21.6  Submission of Dispute to Panel....................................................................15
         21.7  Procedure Governing Arbitration...................................................................15
         21.8  Arbitration Award    .............................................................................15
         21.9  Cost of Arbitration  .............................................................................16
         21.10  Tolling of Statutes of Limitation................................................................16

22.  Service of Process    ......................................................................................16

23.  Regulatory Notices    ......................................................................................16

24.  Divisibility          ......................................................................................16

25.  Headings              ......................................................................................16

26.  Governing Law         ......................................................................................16

27.  Entire Agreement      ......................................................................................16
</TABLE>

                                      -ii-


<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

SECTION                                                                                                        PAGE

<S>                                                                                                            <C>
28.  Counterparts   ............................................................................................16

MANAGEMENT CONTRACT        ......................................................................................1
         Calendar Year   ........................................................................................2
</TABLE>


                                      -iii-


<PAGE>



                    AMENDED AND RESTATED MANAGEMENT CONTRACT

         THIS AMENDED AND RESTATED MANAGEMENT CONTRACT ("Agreement"), effective
as of the 1st day of [_______], 2000 (the "Effective Date"), by and between PCA
PROPERTY & CASUALTY INSURANCE COMPANY, a Florida corporation (the "Company"),
and HUMANA WORKERS COMPENSATION SERVICES, INC., a Florida corporation (the
"Manager").

         RECITALS:

         A. The Company is a Florida-domiciled property and casualty stock
insurer.

         B. The Manager is a licensed insurance administrator and agent and has
expertise, systems, and personnel to provide comprehensive management for the
Company's insurance business.

         C. The Company and the Manager are parties to a Management Contract
dated as of January 1, 1996, pursuant to which the Manager was retained to
manage the Company's insurance operations, subject to the supervision of the
Company (the "Original Agreement").

         D. Pursuant to a Stock Purchase Agreement, dated as of December __,
1999 ("Stock Purchase Agreement") among Physicians Corporation of America, a
wholly-owned subsidiary of Humana Inc. ("Humana") and the sole shareholder of
the Company ("PCA"), Humana and Folksamerica Holding Company, Inc.
("Folksamerica"). PCA sold to Folksamerica on the date hereof all of the issued
and outstanding capital stock of the Company (the "Acquisition").

         E. The parties hereto now desire to amend, restate and replace the
Original Agreement in its entirety in conjunction with the Acquisition, upon and
subject to the terms and conditions set forth in this Agreement.

         AGREEMENT:

         NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto, and other good and valuable consideration, the receipt and sufficiency
of which each party hereby acknowledges, the parties hereby agree as follows:

         1. DUTIES OF THE MANAGER. The Manager undertakes, by itself and through
its subcontractors, to provide to the Company comprehensive management and
administration of the Company's insurance business, subject to the terms and
conditions stated herein and the corporate policies promulgated from
time-to-time by the Company. Company shall have the right to approve the
appointment of all subcontractors who provide material services for Manager
under this Agreement. Without limiting the generality of the foregoing, the
Manager shall perform the following services, except as the Company may from
time to time otherwise expressly direct.


<PAGE>


                  1.1 CLAIMS PROCESSING. The Manager shall provide comprehensive
claim processing, administration, adjusting, and settlement services for the
Company, subject to the limitations contained in this Agreement and as stated
(and communicated in writing to the Manager) in the policies and procedures
(consistent with the terms and conditions contained in this Agreement) developed
and promulgated from time to time by the Company. Without the prior approval of
the Company, the Manager has no authority to pay or commit the Company to pay a
claim over a specified amount other than as set forth in Exhibit B. Without
limiting the generality of the foregoing, the Manager shall:

                  (a) give the Company prompt written notice after the Manager
has actual notice of any demand, action, suit, or proceeding raised, brought,
overtly threatened, made, or commenced against the Company that relates to any
matter to which the provisions of this Agreement apply;

                  (b) fully investigate and adjust all claims against the
Company for coverage or benefits under its policies;

                  (c) report to the Company in a timely manner as set forth in
Exhibit B;

                  (d) use only properly licensed adjusters to adjust claims;

                  (e) notify the Company as soon as it becomes known to the
Manager that a claim:

                           (1)  exceeds the limits set by the company in
Exhibit B;

                           (2) could potentially involve a coverage dispute;

                           (3) exceeds the Manager's claims settlement
authority; or

                           (4) is closed by payment of an amount awarded by
         final judgment of a tribunal of competent jurisdiction (and not
         appealed or subject to appeal) or an amount set or agreed to by the
         Company;

                  (f) pursue all salvage and subrogation rights of the Company,
and forward the proceeds from all such recoveries to the Company, or deposit
them to its fiduciary account if the check is made payable to Manager and
immediately forward such proceeds to the Company, upon receipt;

                  (g) submit and prosecute to completion claims for
reimbursement or recovery from the Florida Special Disability Trust Fund, and
forward all proceeds thereof to the Company, or deposit them to its fiduciary
account if the check is made payable to the Manager and immediately forward such
proceeds to the Company, upon receipt and immediately forward to the Company;

                  (h) pay claims and allocated loss adjustment expenses only on
drafts of and as authorized by the Company (the Company shall maintain a funded
claims account for this purpose);

                                       -2-


<PAGE>



                  (i) ensure that any draft prepared by the Manager, its agents,
or its employees is signed and issued in accordance with the procedures and
limitations set forth in Exhibit B to this Agreement and incorporated herein;

                  (j) adjust all claims according to applicable state law, the
terms and conditions of the Company's policies of insurance, and any written
standards provided by the Company;

                  (k) provide the Company, no later than the 10th business day
of each month, with management information reports for the preceding month which
include a loss run, a check register, a reserve transaction journal, and such
other information as the Company may reasonably request; and

                  (l) the Manager shall not have authority, nor shall any person
appointed by the Manager have authority, to amend the Company's policies of
insurance, or contracts of assumed or ceded reinsurance or waive any such
insurance policy or contract provision or condition without the Company's
express written consent.

                  1.2  LOSS STATISTICAL ANALYSIS.

                  (a) The Manager shall provide professional staff for claims
management coordination under a risk management program, including, but not
limited to, for loss statistical analysis and, in an advisory capacity to
management of the Company, propose the establishment of policies relating
thereto.

                  (b) The Manager agrees to compile and furnish, and where
appropriate file, all pertinent statistical information as from time-to-time
requested by the Company in the form reasonably required by the Company,
including specifically, but without limitation, data required for submission to
or use by the National Council on Compensation Insurance, any other rating
bureau or service used by the Company, and the National Association of Insurance
Commissioners and its operating divisions or instrumentalities such as the
Securities Valuation Office.

                  (c) The Manager shall be responsible for conducting quality
assurance programs for all premium, accounting, and statistical reports and all
policy transactions to assure compliance with all terms of this Agreement and
reconciliation procedures.

                  1.3  PREMIUM OR MONIES COLLECTION.

                  (a) The Manager shall remit to the Company all premiums or
other monies received or collected on business subject to this Agreement by the
Manager or by agents contracted by the Manager on behalf of the Company, whether
or not collected directly by the Manager or by agents from insureds. All such
premiums or other monies received by the Manager pursuant to this Agreement
shall be held by the Manager as bailee thereof in a fiduciary capacity for the
Company.

                  (b) All monies received on behalf of the Company shall be
promptly deposited in the Company's bank account or in a fiduciary account for
immediate transfer to the Company account if the check is made payable to the
Manager. The Manager shall not commingle any premium monies

                                       -3-


<PAGE>


collected pursuant to this Agreement with operating funds or funds held by the
Manager in any other capacity. The Manager shall procure and maintain a
fiduciary account dedicated to monies collected on behalf of the Company for
deposit in the Company account in the event monies belonging to the Company are
made payable to the Manager.

                  (c) The Manager shall conduct premium audits and adjustments
on the Company's behalf, whether called for by the policy terms or at the
initiative of the Manager or the Company, and report to the Company the results
thereof.

                  (d) The Company and Manager may, by written notice to the
other, offset any balance or balances due from the Manager or from the Company
under this Agreement with any balance the Company or Manager holds and that is
then due and payable to the Manager or the Company, as the case may be.

                  1.4 REGULATORY LIAISON. As and when requested by the Company,
the Manager shall act as a liaison between the Company and the Florida
Department of Insurance (the "Department") and any other regulatory or
governmental body or authority to facilitate compliance by the Company with
applicable provisions of law and to submit information, reports, and filings
required or requested by any such body or authority.

                  1.5 ACCOUNTING TO THE COMPANY. The Manager shall provide, no
later than the 10th business day of each month, a detailed accounting to the
Company of all monies, funds, securities, and similar instruments handled in the
Company's name or on its behalf for or during the prior month.

                  1.6  PREPARATION OF FINANCIAL STATEMENTS; BOOKS AND RECORDS.

                  (a) The Manager shall keep complete and accurate records of
the Company's business subject to this Agreement, including but not limited to
all policy claims and financial records. The policy and premium records so
retained by the Manager on behalf of the Company shall be in hard copy form,
microfilm, electronic format, or other generally accepted information storage
medium, as well as in any reasonable back-up form requested by the Company.

                  (b) The Manager also shall prepare and maintain the books and
records of the Company on behalf of the Company, including without limitation
all accounting records and reports, general and other ledgers, financial
statements, and statutory financial reports and filings. The Company and its
designated consultants and advisors shall have the right to examine such books,
files, and records at any time and to make copies of such records as it may deem
necessary, at its cost and expense. All books, accounts, or other documents
relating to the business of the Company, except computer software systems and
the books and records of Manager, are the property of the Company whether paid
for by it or not. The Department shall be permitted reasonable access upon
proper request to books, bank accounts, and records of the Manager to which it
is entitled under applicable law. The records shall be retained in accordance
with the Florida Insurance Code and the Internal Revenue Code in accordance with
procedures established from time to time. No provision of this Agreement shall
be construed or operate to waive or relinquish any legal privilege, proprietary
right, or business confidence of the Company.

                                       -4-


<PAGE>


                  1.7 RETENTION OF ACCOUNTANTS AND ACTUARIES. The retention of
any accountants and actuaries shall be made by the Company at its expense. The
Manager shall keep financial records of the Company open for examination by the
Company and its accountants, auditors and actuaries to examine the financial
condition and results of operation of the Company in accordance with statutory
accounting principles.

                  1.8 CASE MANAGEMENT. The Manager shall perform the specific
services relating to on-site case management, and network access for fees
outlined in Exhibit A attached hereto, and these fees will be assigned to
Allocated Loss Adjustment expenses. All managed care services will be provided
in accordance with AHCA provisions, inclusive of maintaining AHCA approvals.

                  1.9 MINISTERIAL FUNCTIONS. The Manager shall obtain or furnish
and supervise the performance of such ministerial and incidental functions in
connection with the administration of the Company as may be agreed upon by the
Manager and the Company.

                  1.10 INFORMATION SYSTEMS. Manager shall maintain the computer
hardware and the software licenses described on Schedule 1.10 hereto, and upon
termination of this Agreement, Manager shall use its reasonable best efforts to
provide to the Company access to the systems and the data contained therein.
[Schedule 1.10 is to be provided for review of the Company prior to the Closing
Date of the Stock Purchase Agreement.]

         2. LIMITATION OF AUTHORITY. In addition to any other limitations
expressly contained in this Agreement, any Exhibit hereto, bulletin, or
instruction which may be issued from time to time by the Company to the Manager
consistent with this Agreement, and except as otherwise permitted by this
Agreement, the Manager has no authority to and shall not:

                  (a) Make, accept or endorse notes or otherwise incur any
liability which is not incurred in the ordinary course of business of the
Manager on behalf of the Company in accordance with this Agreement.

                  (b) Waive a forfeiture or issue a guaranty for or on behalf of
the Company, other than as permitted expressly in writing by the Company.

                  (c) Extend the time for the payment of premiums or other
monies due the Company.

                  (d) Institute, prosecute, defend, or maintain any legal
proceedings in connection with any matter on behalf of the Company; provided,
that at the Company's request (which may be a continuing or standing request)
the Manager shall conduct such proceedings, at the Company's expense and subject
to its direction, respecting collection of premiums, defense of claims under the
Company's business, and other matters deemed routine or otherwise designated by
the Company for this purpose.

                  (e) Directly or indirectly solicit, sell, offer, bind, issue
or deliver any insurance or reinsurance or buy retrocessional coverage for the
Company without the approval of the Company.

                                       -5-


<PAGE>


                  (f) Transact business, or cause the Company to transact
business, in contravention of applicable laws, rules, lawful orders, or
regulations or in contravention of written instructions issued by the Company to
Manager consistent with this Agreement and as agreed from time to time.

                  (g) Hold itself out as an agent of the Company in any other
manner, or for any other purpose, other than as specifically authorized or
permitted by or in accordance with this Agreement or as otherwise expressly
authorized by the Company from time to time.

                  (h) Waive or forgive premium payment.

                  (i) Withhold or use of its own purposes (except as authorized
in this Agreement) any monies or property of the Company.

                  (j) Offer or pay any rebate or return of premium other than as
prescribed by the Company's policies of insurance.

                  (k) Bind (or commit to bind) coverage subsequent to its
effective date without express approval of the Company.

                  (l) Appoint any agent or producer.

                  (m) Permit agents or sub-agents of the Company to serve on the
Manager's Board of Directors.

                  (n) Endorse checks that are payable to the Company or its
order, except that the Manager may endorse such checks for deposit into a
fiduciary bank account where such checks are received on behalf of the Company
but made payable to the Manager. The Manager shall endorse and deposit in the
account on behalf of the Company all premium checks or other monies received on
behalf of the Company that are made payable to the Manager or its order.

                  (o) Commit the Company to any claims compromise or settlement
from a reinsurer without express approval of the Company.

         3. RELATIONSHIP OF THE PARTIES. The Company and the Manager are not
partners or joint venturers with each other, and nothing herein shall be
construed so as to make them partners or joint venturers or to impose any
liability of such on either of them. The Manager shall perform its duties
hereunder as an independent contractor and, except as herein expressed or as
hereafter expressly authorized by the Company, not as an agent of the Company,
but the Manager may act and hold itself out as the Company's agent to the extent
and for the purposes so authorized. The Manager shall be free to exercise
independent judgment as to the time, place, and manner of servicing
policyholders, administering, adjusting, and settling claims, and otherwise
performing its duties under this Agreement. However, the Manager shall perform
its duties at all times in accordance with this Agreement.

         4. CLAIMS ACCOUNT. The Company shall maintain a funded or zero-balance
fiduciary claims account upon which the Manager shall draw drafts as described
in Section 1 of this

                                       -6-


<PAGE>



Agreement. The Company shall, if necessary, deposit additional funds into the
claims account on a daily or weekly basis to maintain it at a level sufficient
to allow the Manager to pay claims under Section 1.1(g) and to carry out its
obligations under this Agreement. The Manager shall regularly provide
information and estimates to the Company to enable the Company to maintain the
claims account at an appropriate level. The Company shall provide to the Manager
such information as is necessary for the Manager to draw drafts on the Account
and shall from time to time designate to the Manager blocks of draft numbers for
the Manager to use in discharging its obligations under this Agreement.

         5. EXPENSES OF THE MANAGER. Without regard to the amount of
compensation earned or received hereunder by the Manager, the Manager shall bear
the following expenses, provided that the Manager may receive reimbursement for
all or an allocated portion of such expenses as is expressly provided elsewhere
in this Agreement.

                  (a) Employment expenses of personnel or subcontractors
employed by the Manager to render services required to be rendered or furnished
to the Company hereunder, including, but not limited to, salaries, wages,
payroll taxes, mandatory insurances, and costs of employee benefit plans and
temporary help expenses.

                  (b) Rent, telephone, utilities, office furniture, equipment,
machinery (including computer hardware and software to the extent utilized), and
other office expenses of the Manager.

                  (c) Miscellaneous administrative and overhead expenses
relating to performance by the Manager of its functions hereunder.

                  (d) Expenses of professional advisors and consultants engaged
or retained by the Manager for its purposes and not on behalf of the Company.

                  (e) Taxes payable in respect of the income, operations, and
properties of the Manager, and any costs, fines, or penalties imposed on or paid
by Manager because of its actual or alleged conduct or operations.

         6. EXPENSES OF THE COMPANY. Except as expressly otherwise provided in
this Agreement, the Company shall pay all of its expenses not assumed by the
Manager. Without limiting the generality of the foregoing, it is specifically
agreed that the following expenses relating to the business and operations of
the Company shall be paid or reimbursed by the Company and shall not be borne by
the Manager.

                  (a) All filing fees, taxes, assessments, and impositions
applicable to the Company or its business, including specifically, but without
limitation, premium taxes, intangible taxes, and guaranty fund, assigned risk
plan, and Special Disability Trust Fund assessments.

                  (b) All premiums and consideration for reinsurance.

                  (c) All expenses of organizing, financing, converting,
reorganizing, liquidating, or terminating the Company.

                                       -7-


<PAGE>



                  (d) All expenses in the payment and settlement of claims,
together with expenses properly classified or accounted for as allocated loss
adjustment expenses (as further described in Sections (3)(a) and (3)(b) of
Exhibit A attached hereto), but not including expenses properly classified as or
accounted for as unallocated loss adjustment expenses.

                  (e) All expenses for Company membership requested by the
Company in any board, bureaus, associations, or joint underwriting or assigned
risk plan, including the National Council on Compensation Insurance, Inc.,
Insurance Services Office, Inc., and any other such organizations to which the
Company subscribes or approves its subscription but not including memberships
necessary for the Manager to fulfill its obligations under this Agreement.

                  (f) All costs and expenses including professional fees for
legal, accounting, and actuarial services rendered from time to time for the
Company by any legal, accounting, or actuarial firm engaged and approved in
writing by the Company.

                  (g) Audits and examination fees of the Company by the
Department or any other regulatory or governmental entity respecting the
Company.

                  (h) All assessments, charges, or impositions by or for
guaranty associations, residual market mechanisms, the Florida Hurricane
Catastrophe Fund, and all other similar entities.

                  (i) All expenses, fees, or assessments charged by A.M. Best or
any similar rating agency in connection with securing listings and ratings for
the Company.

                  (j) All promotional and advertising expenses initiated by the
Company.

         7. COMPENSATION OF THE MANAGER. The Company shall pay to the Manager as
compensation for services rendered to the Company under the terms of this
Agreement, the amounts listed on Exhibit A. All fees shall be payable monthly
unless the Manager otherwise expressly agrees.

         8. TERM. This Agreement shall commence as of the Effective Date and
continue in force and effect for 15 years, unless the insurance reserves of the
Company are equal or greater than $10,000,000, in which case, this Agreement
shall continue to be in force and all of its terms and provisions shall remain
enforceable until such time as such reserves are less than $10,000,000, or
unless sooner terminated (a) by written agreement of the parties or (b) pursuant
to Section 15 or any other provision of this Agreement expressly providing for
termination. Provided, however, in the event of the termination of this
Agreement, the Manager shall continue to administer and provide the services
agreed pursuant to the terms hereof for a reasonable period of time, not to
exceed 30 days, to enable the Company to find a suitable replacement to perform
such services.

         9. BUDGETS AND CONTROLS. For so long as this Agreement is in effect,
the Manager shall submit to the Company (a) not less than 30 days prior to
December 31 of a year, a detailed operating budget for the Manager's current and
next succeeding fiscal year, showing without limitation the Manager's plans and
ability to fulfill its obligations under this Agreement as they come due, and
thereafter (b) quarterly and annual audited financial statements prepared in
accordance with generally

                                       -8-


<PAGE>



accepted accounting principles showing the Manager's financial condition,
results of operation, and cash flow for the quarter or year last ended, as
applicable. Annual financial statements shall be audited; quarterly statements
need not be audited. The Company shall be entitled to review and audit, through
its employees and agents (including independent accountants and auditors) the
books, records, and financial statements of the Manager, and the Manager shall
cooperate fully therein.

         10.  COVENANTS.

                  10.1 USE OF SERVICE FEES. Except as otherwise permitted
herein, the Manager will use the Service Fees provided on Exhibit A to meet the
working capital and general corporate needs of the Manager.

                  10.2 NOTICE OF DEFAULT. The Manager will give prompt notice in
writing to the Company of (a) the occurrence or any default or (b) the
occurrence of any other development, financial or otherwise which could
reasonably be expected to result in a default or affect the ability of the
Manager to provide the services to Company contemplated herein.

                  10.3 CONDUCT OF BUSINESS. The Manager will (a) carry on and
conduct its business in substantially the same manner and in substantially the
same fields of business as it is presently conducted and shall not establish any
subsidiary or make any material investment in any other company without prior
consent of the Company, which consent will not be unreasonably withheld, (b) not
conduct any significant business except for insurance or insurance related
services, (c) do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction in
which its business is conducted and (d) do all things necessary to renew, extend
and continue in effect all licenses which may at any time and from time to time
be necessary to conduct business in compliance with this Agreement and all
applicable laws and regulations.

                  10.4 TAXES. The Manager will timely file complete and correct
United States federal and applicable foreign, state and local tax returns
required by applicable law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or property.

                  10.5 PROVISION OF MEDICAL CARE AND SERVICE CONTRACTS. The
Manager will furnish to the Company, upon request therefor, copies of each
contract to which the Manager is a party relating to the provision of medical
care and related procedures, which the Manager utilizes in connection with its
settlement and evaluation of claims on behalf of the Company or to which
Claimants are referred by the Manager.

         11.  LICENSING AND COUNTERSIGNATURE REQUIREMENTS.

                  (a) The Manager represents and warrants that it now has, and
it agrees to maintain during the term of this Agreement, the license or licenses
necessary to perform its obligations under this Agreement. If the Manager
complies with licensing laws by using the license of a principal, director,
officer, or employee, then the Manager warrants and guarantees that the licenses
will comply with all requirements of this Agreement and specifically with this
paragraph, and the Manager will be responsible to the Company to the same extent
as if the applicable license were held

                                       -9-


<PAGE>


directly by the Manager. In the event that any license the Manager uses and
requires to fulfill the requirements of the Agreement expires, terminates, or is
suspended for any reason, and the Manager does not use another of its licenses
or the license of a principal, director, officer, or employee, then the Company
may terminate this Agreement and avail itself of any rights provided under
section 15 hereof.

         12. AMENDMENT & WAIVERS. This Agreement may not be amended, modified,
terminated, or discharged in whole or in part, except by an instrument in
writing signed by both parties hereto or their respective successors or assigns.
No waiver of any right, remedy, or benefit provided or accruing to either party
under this Agreement shall be effective unless in writing and executed by the
party against which it operates.

         13.  ASSIGNMENT.

Neither party may assign this Agreement in whole or in part without the prior
written consent of the other, which shall not be unreasonably withheld. Company
may assign its rights under this Agreement to Folksamerica or any affiliate
within Folksamerica , without the consent of Manager, provided that the assets
of the Company are also transferred to Folksamerica or such affiliate and
Folksamerica or such affiliate, as the case may be, remains financially viable.
Further, Manager may assign its rights under this Agreement to Humana or any
affiliate of Humana, without the consent of the Company, provided that Humana,
or such affiliate of Humana, as the case may be, remains financially viable.

         14. INSPECTIONS. The Company may conduct on-site reviews of the
operations of the Manager. The Company shall provide the Manager with a copy of
the reviews as soon as they are completed.

         15.  TERMINATION.

                  15.1  DUE CAUSE DEFINED.  Either party may terminate this
Agreement at any time for Due Cause committed by the other party. "Due Cause"
shall mean:

                  (a) Willful misconduct by the other with respect to a matter
that is a subject of this Agreement;

                  (b) Negligence or recklessness in the performance of the
other's material duties under this Agreement;

                  (c) Any act, error, or omission, whether intentional or
unintentional, by the other, its officers, directors, employees, or sub-agents,
that places the Company or the Manager, as the case may be, in violation (not
promptly cured) of any applicable law, rule, regulation, or lawful and binding
order of the Department, other regulatory agency or authority, or court of
competent jurisdiction in any material respect.;

                  (d) Any breach, non-performance, or violation by the other, or
its officers, directors, employees, or its sub-agents, of any material
provision, term or condition hereof;

                                      -10-




<PAGE>

                  (e) The Manager's persistent failure to follow in a material
respect a lawful directive of the Company that is called for by or not
inconsistent with this Agreement; or

                  (f) (i) the sale, merger, consolidation, share exchange or
other transaction where, immediately following such transaction, there is a
change of ownership or control of more than 50% of the voting securities of the
Manager or the Company, as the case may be, or (ii) there is a sale of all or
substantially all of the assets of the Manager or the Company, as the case may
be, without making provision for the assumption by the acquiror of all
liabilities and obligations of the Manager or the Company, as the case may be,
under this Agreement; provided, the Manager shall have no reason to withhold its
consent to any of the foregoing transactions if the proposed transaction does
not, or is not reasonably likely to, adversely affect the Manager's rights to
receive the compensation, bonuses and other benefits provided for in this
Agreement; provided, further, the Company shall have no reason to withhold its
consent to any of the foregoing transactions if the proposed transaction does
not, or is not reasonably likely to, adversely affect the Company's rights
provided for in this Agreement. The parties hereby agree that Due Cause shall
not exist for termination of this Agreement for any change of control in Humana
or Folksamerica.

                  15.2 TERMINATION FOR BREACH; CURE RIGHTS. Before a party may
terminate this Agreement, the party must permit the other to rectify such
breach, non-performance, or violation within a reasonable period, not to exceed
30 days unless extended by agreement of the parties. If the party fails to cure
such breach within such period, this Agreement shall terminate on the effective
date of the termination as provided in the termination notice.

                  15.3 TERMINATION WITH NOTICE. Notwithstanding the foregoing,
either party may terminate this Agreement immediately by giving written notice
of termination to the other party at its address if the other should:

                  (a) Be adjudged bankrupt or not cause to be dismissed a
bankruptcy petition within 60 days after it is filed;

                  (b) Have a receiver of its business, assets or property
appointed for purposes of liquidation because of insolvency or other grounds
permitted by law;

                  (c)  Make a general assignment for the benefit of creditors;

                  (d) Suffer any judgment in an amount in excess of $250,000.00
against it which remains unsatisfied, unbonded, or not stayed pending appeal for
30 days or longer; or

                  (e) Institute or suffer to be instituted and not dismissed
within 60 days any proceedings for the reorganization or arrangement of its
affairs.

                  (f) Failure of Manager to carry errors and omissions insurance
as set forth in Section 19, below, and to maintain a fidelity bond providing for
coverage of at least $5,000,000.



                                      -11-

<PAGE>



                  15.4  REMEDIES UPON EARLY TERMINATION.

                  (a) Upon termination of this Agreement, unless otherwise
stipulated in writing by the Company, the Manager shall account to the Company
for all monies or other transactions unaccounted for at the time of termination
or arising thereafter with respect to the Company's business. Except as provided
in Section 15.4(b), the Manager shall be entitled to its agreed compensation and
any reimbursable costs expended by Manager in accordance with the terms of this
Agreement up to and including the date of termination.

                  (b)  Upon termination of this Agreement by the Company for Due
Cause, the Manager shall:

                           (1) be entitled to any reimbursable costs expended by
         Manager in accordance with the terms of this Agreement up to and
         including the date of termination;

                           (2) forfeit any and all rights to any bonus
         compensation pursuant to Section 2 of Exhibit A of this Agreement,
         except bonus compensation earned up to the date of termination as
         established pursuant to an actuarial report prepared as of the
         termination date;

                           (3) forfeit any and all rights to receive future fees
         payable pursuant to Section 3 of Exhibit A to this Agreement;

                           (4) forfeit any and all rights to receive future fees
         payable pursuant to Section 1 of Exhibit A to this Agreement; and

                           (5) reimburse the Company fees paid pursuant to
         Section 1 of Exhibit A of this Agreement based upon the schedule:


<TABLE>
<CAPTION>

                                                  Total Due
<S>                                            <C>
If terminated year 1.........................  $      750,000
If terminated year 2.........................  $      650,000
If terminated year 3.........................  $      750,000
If terminated year 4.........................  $      850,000
If terminated year 5.........................  $      950,000
If terminated after 5 years..................  $            0
</TABLE>

                  (c) The parties hereby acknowledge and agree that the damages
for lost opportunity to earn bonus payments which Manager would suffer or incur
upon the termination of this Agreement within the first two years of the term of
this Agreement by the Company without Due Cause or by the Manager for Due Cause
would be substantial but difficult or impossible to ascertain or determine. The
parties stipulate that in any such event, the Company shall pay to the Manager
$5,000,000 as damages for its lost opportunity to earn the bonus payments
provided for in this Agreement. The parties further acknowledge and agree that
such payment by the Company constitutes liquidated damages for the lost
opportunity to earn bonus payments and not a penalty for any such breach by the
Company and the resulting termination of this Agreement.

                                      -12-

<PAGE>



                  15.5  ADDITIONAL AGREEMENTS UPON TERMINATION.

                  (a) If such action is reasonably necessary to protect the
business of the Company or the value of the Subject Business, the Company may
suspend claims settlement authority of the Manager during the pendency of any
bona fide dispute over the cause for or propriety of termination.

                  (b) Any termination shall not affect the rights and
obligations of the parties as to transactions or acts by either party prior to
the effective date of termination or relieve either party's obligation on
policies during the pendency of any dispute over the cause of termination,
unless otherwise agreed to by the parties.

                  (c) Any right of termination or cancellation belonging to any
party may be exercised without prejudice to any other right or remedy to which
the terminating or canceling party may be entitled at law or under this
Agreement.

         16. LIMITATION OF LIABILITY OF THE COMPANY AND ITS AGENTS. No personal
liability shall accrue to the Company's directors, officers, or employees,
arising out of the performance of their responsibilities under this Agreement.

         17. LIMITATION OF LIABILITY OF THE MANAGER. The Manager assumes no
responsibility, and shall not be responsible for any decision or election of the
Company (whether by act or omission) to follow or decline to follow any advice
or recommendation of the Company.

         18. SPECIAL ADMINISTRATOR PROVISIONS. The Manager is deemed to be an
administrator, as defined by SS 626.88, Florida Statutes, for purposes or by
virtue of entering into and performing this Agreement, but only to the extent
that such provisions apply to the functions performed by Manager under this
Agreement within the meaning of SS 626.882(2)(a), F.S.

                  (a) All monies received by the Manager on behalf of or for the
Company, and any return premiums received from or on behalf of the Company shall
be held in a fiduciary capacity. Any such funds shall be immediately remitted to
the person or persons entitled to them or deposited promptly in a fiduciary
account maintained by Manager in a financial institution. If charges or premiums
deposited in such an account are collected on behalf of more than one insurer,
the Manager shall keep records clearly recording the deposits and withdrawals on
behalf of each insurer and shall, upon request, furnish any such insurer with
copies of records pertaining to its deposits and withdrawals. Manager may not
pay claims from any such fiduciary account. Withdrawals from any such account
shall be made in accordance with this Agreement. Any claims paid by Manager from
funds collected on behalf of the Company shall be paid on drafts of, and as
authorized by the Company.

                  (b) Until six years or such longer period as required by law
after the termination or expiration of this Agreement, Manager shall maintain in
its principal office, and in accordance with prudent standards of insurance
record keeping, this Agreement and adequate books and records of all
transactions with the Company and its policyholders. The Department shall have
access to such books and records for purposes of examination, audit, and
inspection, to the extent and under the conditions provided in the Florida
Insurance Code.

                                      -13-

<PAGE>




                  (C) Any policies, certificates, booklets, termination notices,
or other written communications delivered by the Company to Manager for delivery
to Company policyholders shall be so delivered promptly after Manager's receipt
of delivery instructions.

         19. ERRORS AND OMISSIONS INSURANCE. Commencing on the Effective Date
and continuing during the term of this Agreement and for a period of three (3)
years subsequent to the date of termination of this Agreement for any reason,
the Manager shall maintain errors and omissions insurance (with the Manager and
the Company as named insureds) with a policy limit of $15,000,000, with a
deductible no greater than $25,000 per claim, with a $100,000 annual AGGREGATE
deductible, under a current policy issued by an insurer reasonably acceptable to
the Company. Said policy shall provide coverage for errors and omissions for all
claims adjusting and administrative services performed by the Manager under this
Agreement. Deductibles, if paid in the future, shall be paid by the Manager. A
copy of the policy shall be furnished to the Company. In the event such policy
is canceled or non-renewed during the Term of this Agreement, the Manager will
provide notice to the Company, which notice shall be received at least 30 days
prior to such termination of non-renewal.

         20. NOTICES. Any notices, reports, or other communication required to
be given hereunder shall be in writing unless some other method of giving such
notice, report, or other communication is accepted by the party to which it is
given and shall be given by being delivered at its principal business address or
another address requested by the recipient.

         21.  ARBITRATION.

                  21.1 RESOLUTION OF DISPUTES. Any dispute between the Company
and the Manager arising out of the provisions of this Agreement, or concerning
its interpretation or validity, whether arising before or after termination of
this Agreement, shall be submitted to arbitration in the manner set forth in
this Section. Either party may initiate arbitration of any dispute arising out
of the provisions of this Agreement by giving written notice to the other party,
by registered mail, return receipt requested, of its intention to arbitrate and
of its appointment of an arbitrator in accordance with Section 21.3.

                  21.2 COMPOSITION OF PANEL. Unless the parties agree upon a
single arbitrator within fifteen (15) days after the receipt of notice of
intention to arbitrate, all disputes shall be submitted to an arbitration panel
composed of two arbitrators and an umpire, chosen in accordance with Sections
21.3 and 21.4

                  21.3 APPOINTMENT OF ARBITRATORS. The members of the
arbitration panel shall be chosen from persons knowledgeable in the insurance
and reinsurance business. The party requesting arbitration (hereinafter referred
to as the "claimant") shall appoint an arbitrator and give written notice
thereof, by registered mail, return receipt requested, to the other party
(hereinafter referred to as the "respondent") together with its notice of
intention to arbitrate. Unless a single arbitrator is agreed upon within fifteen
(15) days after the receipt of the notice of intention to arbitrate, the
respondent shall, within thirty (30) days after receiving such notice, also
appoint an arbitrator and notify the claimant thereof in a like manner. Before
instituting a hearing, the two arbitrators so

                                      -14-

<PAGE>



appointed shall choose an umpire. If, within twenty (20) days after they are
both appointed, the arbitrators fail to agree upon the appointment of an umpire,
the umpire shall be appointed by the President of the American Arbitration
Association. The umpire shall participate in all proceedings and have the same
power and authority as the other arbitrators selected by the claimant and
respondent.

                  21.4 FAILURE OF PARTY TO APPOINT ARBITRATOR. If the respondent
fails to appoint an arbitrator within thirty (30) days after receiving a notice
of intention to arbitrate, such arbitrator shall be appointed by the President
of the American Arbitration Association, and shall then, together with the
arbitrator appointed by the claimant, choose an umpire as provided in Section
21.3.

                  21.5 CHOICE OF FORUM. Any arbitration instituted pursuant to
this Article shall be held in New York, New York .

                  21.6 SUBMISSION OF DISPUTE TO PANEL. Unless otherwise extended
by the arbitration panel, or agreed to by the parties, each party shall submit
its case to the panel within thirty (30) days after the selection of an umpire.

                  21.7 PROCEDURE GOVERNING ARBITRATION. All proceedings before
the panel shall be informal and the panel shall not be bound by the formal rules
of evidence. The panel shall have the power to fix all procedural rules relating
to the arbitration proceeding. In reaching any decision, the panel shall give
due consideration to the customs and usage of the insurance and reinsurance
business.

                  21.8 ARBITRATION AWARD. The arbitration panel shall render its
decision within sixty (60) days after termination of the proceeding, which
decision shall be in writing, stating the reasons therefor. The decision of the
majority of the panel shall be final and binding on the parties to the
proceeding. Judgement on the award rendered may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of such award or any order of enforcement, as the case may be.

                  21.9 COST OF ARBITRATION. Unless otherwise allocated by the
panel, each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other parties the expense of the umpire and the
arbitration.

                  21.10 TOLLING OF STATUTES OF LIMITATION. All applicable
statutes of limitation shall be tolled while the procedures specified in this
Section 21 are pending. The parties shall take such action, if any, required to
effectuate such tolling.

         22. SERVICE OF PROCESS. In the event any legal process or notice is
served on the Manager in a suit or proceeding against the Company, the Manager
shall forthwith forward such process or notice, in a timely fashion and by
registered or certified mail, to the Company's office as hereinabove specified,
or to such other address as the Company may have previously specified to the
Manager in writing by notice in accordance with this Agreement.


                                      -15-

<PAGE>



         23. REGULATORY NOTICES. The Manager shall forward promptly to the
Company all correspondence pertaining to this Agreement, the Company or the
Company's business received from any government authority or regulatory agency.

         24. DIVISIBILITY. If any provision hereof shall be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof.

         25. HEADINGS. Paragraph headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning
of this Agreement.

         26. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Florida as at the time in effect.

         27. ENTIRE AGREEMENT. This Agreement and the attached Schedules and
Exhibits set forth the entire understanding of the parties hereto with respect
to the subject matter hereof and supersedes all prior and contemporaneous
agreements or understandings, written or oral, respecting such subject matter.

         28. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single instrument.

         IN WITNESS WHEREOF, the parties have hereunder set their hands and
seals, each through a duly authorized representative.



                                          PCA PROPERTY & CASUALTY INSURANCE
                                          COMPANY


                                          By:
                                              ----------------------------------
                                          Title:
                                                 -------------------------------


                                          HUMANA WORKERS COMPENSATION
                                          SERVICES, INC.


                                          By:
                                              ----------------------------------
                                          Title:
                                                 -------------------------------




                                      -16-

<PAGE>



                                    EXHIBIT A
                                       TO
                               MANAGEMENT CONTRACT


HWCS  SERVICE FEE PROVISIONS:

In return for the above services provided by Manager pursuant to this Agreement,
the Company will provide to Manager the following service fees:

(1)  The recorded ULAE amount on Company balance sheet at the date of close of
     the Company and the PCA Stock Purchase Agreement, plus an additional
     $3,000,000 in service fees payable to Manager. The recorded ULAE as of
     October 31, 1999 was $9,374,000 which will be reduced prior to the date of
     close by periodic adjustments to reflect reimbursements to the Manager for
     direct ULAE costs. Such reimbursements are estimated to be $350,000 to
     $450,000 per month.

     The payment of those fees shall be in six month intervals as follows:

<TABLE>
<CAPTION>

                        DATE                                           PAYMENT
<S>                                                    <C>
Close................................................                               $3,000,000

6 months after close.................................                               $3,000,000

12 months after close................................                               $1,000,000

18 months after close................................                               $1,000,000

24 months after close ...............................                                 $500,000

30 months after close................................                                 $500,000

36 months after close ...............................                                 $500,000

42 months after close ...............................                                 $500,000

48 months after close ...............................  One-half of Balance of ULAE
                                                       Account

54 months after close ...............................  Balance of ULAE Account
</TABLE>


(2)  The Company and Manager will enter into a bonus arrangement which allows
     for both parties to share in the incremental savings produced by the
     efforts of Manager.

The intent of the periodic bonus calculation will be to determine and share the
cumulative net increase in statutory book value attributable to the value added
service efforts of the Manager. To this end the following formula will serve as
a base for this calculation which will be made cumulatively from the date of
close using page 4 of the Annual Statement - audited:


                                       -1-

<PAGE>



<TABLE>
<CAPTION>

<S>                                                                                           <C>
Net income before income taxes (line 14)                                                                    $XXXXXX

Less, net investment gain or loss (line 9A)                                                                     XXX

Plus, $5,000,000 to reflect purchase price concession (this adjustment to be
         made in the bonus calculations for the first three years
          for a maximum adjustment of $15,000,000)*                                                       5,000,000

Plus or minus the difference in Losses incurred (line 2 and line 12 as it
     relates to loss portfolio transfers) resulting from replacing the
     amount included for ending reserves with that amount representing the
     independent actuaries' recommended reserve level
     (i.e., "best estimate") ..                                                                            XXX
                                                                                                         XXXXXX
                                                                                                          @ 25%
                                                                                                         XXXXXX

Less, amount paid as medical access fees (item 3(A) below)                                                      XXX

Total Amount Payable to Manager                                                                             $XXXXXX
</TABLE>

*    Assumes that no prior reserve reductions are restored before the date of
     close.

The bonus calculation will be performed annually by March 15th of each year and
payable on April 1st of each year based on the following table.

<TABLE>
<CAPTION>

                                                        CALENDAR YEAR
                          2000         2001           2002          2003           2004          2005         2006
--------------------  ------------ -------------  ------------- -------------  ------------- ------------ ------------
Payment date            April 1,     April 1,       April 1,      April 1,       April 1,      April 1,     April 1,
                          2001         2002           2003          2004           2005          2006         2007
--------------------  ------------ -------------  ------------- -------------  ------------- ------------ ------------
<S>                       <C>           <C>            <C>           <C>            <C>          <C>          <C>
% of Cumulative           50%           65%            80%           90%            95%          100%         100%
bonus payable
--------------------  ------------ -------------  ------------- -------------  ------------- ------------ ------------
% held in interest        50%           35%            20%           10%            5%            0%           0%
bearing account
--------------------  ------------ -------------  ------------- -------------  ------------- ------------ ------------
</TABLE>

The bonus calculation will be an inception to date calculation done each year
and fully paid out under the above percentages. A full and final settlement will
be mutually agreed to by both parties in year seven (2006).

The interest bearing account will be a bank account in the name of Folksamerica
and Humana Workers' Compensation Services, Inc. and all interest will accrue to
Humana Workers' Compensation Services, Inc. to the extent that the related bonus
principal is paid.

(3)  The following fees are payable to HWCS monthly and are related solely to
     Allocated Loss Adjustment Expenses (ALAE);


                                       -2-

<PAGE>



A)   Medical network access fees of 30% of savings below prevailing Florida fee
     schedule.
B)   On-site medical case management fees as detailed on Attachment A hereto.










                                       -3-

<PAGE>



                                  ATTACHMENT A


         The following flat rates for on-site medical case management services
include one (1) hour travel time and fifty (50) miles travel distance for "in
person" services. Miles traveled beyond fifty (50) shall be reimbursed at $0.32
per mile.

<TABLE>
<CAPTION>
SERVICE                                                                RATE
<S>                                                                    <C>
3-Point Medical Assessment in Person                                   $465
(Claimant, Physician, Employer)
</TABLE>

          Description: Review referral information, schedule appointments and
          meet with the claimant physician and employer. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
3-Point Contact in Person                                              $585
with Attendant Care Assessment
</TABLE>
         Description: Review referral information, schedule appointments, meet
         with claimant, physician and employer. Meet with claimant to review
         home environment, family support system, activities of daily living,
         functional abilities, limitations, and recommendations. Meet with
         physician to review attendant care assessment, sign assessment, submit
         report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Claimant Visit in Person                                               $245
</TABLE>
          Description: Review referral information, schedule appointment, and
          meet with claimant. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Physician Visit In Person                                              $245
</TABLE>
          Description: Review referral information, schedule appointment, and
          consult with physician. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Employer Visit                                                         $245
</TABLE>
          Description: Review referral information, schedule appointment, and
          meet employer. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
2-Point Contact In Person                                              $365
(Claimant, Physician)
with Attendant Care Assessment                                         $485
</TABLE>
          Description: Review referral information, schedule appointments, meet
          with claimant, physician. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
2-Point Contact in Person                                              $365
(Claimant, Employer) No Job Analysis
</TABLE>
          Description: Review referral information, schedule appointments, meet
          with claimant and employer, interview supervisor.




                                       -4-

<PAGE>



                              ATTACHMENT A, (CONT.)


<TABLE>
<CAPTION>
SERVICE                                                                RATE
<S>                                                                    <C>
2-Point Contact in Person                                              $465
(Claimant, Employer) with Job Analysis
</TABLE>
          Description: Review referral information, schedule appointments, meet
          with claimant and employer, interview supervisor, and observe job
          being performed. Submit job analysis report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Claimant Contact in Person                                             $355
with Attendant Care Assessment
(Initial Assessment)
</TABLE>
          Description: Review referral information, schedule appointment, meet
          with claimant. Refer to Attendant Care Assessment Description. Submit
          report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Attendant Care Assessment in Person                                    $295
(Utilizing Revised AHCA Form)
</TABLE>
          Description: Review referral information, schedule appointment, and
          meet with claimant to review home environment, family support system,
          activities of daily living, functional abilities and limitations, and
          recommendation. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Re-Employment Assessment-Telephonic                                    $135
(Per New Rehab Rules 38.F)
</TABLE>
          Description: Review referral information, and consult with claimant,
          physician and employer by telephone. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Re-Employment Assessment in Person                                     $465
(Per New Rehab Rules 38.F)
</TABLE>
          Description: Review referral information, schedule appointment, meet
          with claimant, physician and employer. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Re-Employment Assessment with Job Analysis                             $565
</TABLE>
          Description: Review referral information, schedule appointment, meet
          with claimant, physician, and employer. Refer to Job Analysis
          description. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Vocational Assessment with Transferable                                $625
Skills Analysis (includes computerized analysis)
</TABLE>
          Description: Review referral information, schedule appointment, and
          meet with claimant for comprehensive vocational interview. Develop
          vocational profile from work history, adjust to reflect functional
          limitations, and perform transferable skills analysis. Submit report.



                                       -5-

<PAGE>



                               ATTACHMENT A, CONT.


<TABLE>
<CAPTION>
SERVICE                                                                RATE
<S>                                                                    <C>
Vocational Assessment/Job Analysis/                                    $725
Labor Market Survey
</TABLE>
          Description: Review referral information, schedule appointment, meet
          with claimant for comprehensive vocation interview. Develop vocational
          profile from work history, adjusted to reflect functional limitations.
          Refer to Job Analysis description. Refer to Labor Market Survey
          description. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Job Analysis in Person                                                 $260
</TABLE>
          Description: Review referral information, schedule appointment to meet
          with employer, interview supervisor, and observe job being performed.
          Submit job analysis report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Labor Market Survey with Transferable                                  $455
Skills Analysis (includes computerized analysis)
</TABLE>
          Description: Review referral information, develop vocational profile
          from work history, adjust to reflect functional limitations and
          perform computerized transferable skills analysis to identify
          potential vocational goals. Review labor market resources, and conduct
          telephone survey of employers within given geographical area to
          document availability of jobs for vocational goal or goals identified.
          Survey will include a minimum of five (5) positive responses to
          support vocational goal or will include at least twelve (12) negative
          responses, to document goal is invalid. Submit report outlining
          results of TSA and labor market survey. LMS report will include
          employer name, phone number, contact person, hiring requirements,
          physical requirements of job and information regarding wages and job
          openings.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Labor Market Survey without Transferable                               $355
Skills Analysis (includes computerized analysis)
</TABLE>

         Description: Review referral information and labor market resources,
         and conduct availability of jobs for given occupational goal and goals.
         Survey will include a minimum of five (5) positive responses (per
         Division guidelines) to support vocational goal or will include at
         least twelve (12) negative responses, to document goal is invalid.
         Report will include employer name, phone number, contact person, hiring
         requirements, physical requirements of job, and information regarding
         wages and job openings. Submit report.

<TABLE>
<CAPTION>
<S>                                                                    <C>
Transferable Skills Analysis                                           $175
</TABLE>
          Description: Review referral information TSA
          (computerized/non-computerized analysis) to identify potential
          vocational goals. Submit report.





                                       -6-

<PAGE>



                                    EXHIBIT B
                                       TO
                              MANAGEMENT AGREEMENT



         CLAIMS HANDLING PROCEDURES:

         The Manager, on behalf of the Company, will be responsible for
         handling, processing, adjustment and settlement of any and all claims,
         including all ceded and third party recoveries associated therewith,
         and other claims related activities associated with the PCA P&C
         business. This includes, but is not limited to, all claims associated
         with the loss portfolio transfers entered into by the Company prior to
         the closing date of the Folksamerica purchase of the Company from
         Humana. For sake of order in the administration under this Management
         Agreement, the different types of business are specifically classified
         as (1) Primary Workers Compensation, (2) Excess Workers Compensation,
         and (3) Other Liability (i.e. - the General Liability book assumed from
         FHB and later written directly by PCA P&C). This Exhibit will outline
         the various duties required on a general, which applies to all three
         business categories, as well as to each specific area.

                  GENERAL DUTIES

                  1. The Manager will handle, process, adjust and settle all
         losses in accordance with the appropriate state statutes and generally
         accepted "best claim handling practices/standards." The Manager will
         ensure that only covered losses are accepted and that all potential
         third party recoveries including, but not limited to, SDTF recoveries,
         reinsurance recoveries, subrogation recoveries and salvage, where
         appropriate, are timely filed and pursued. The Manager will act in good
         faith when handling these matters on behalf of the Company.

                  2. The Manager will maintain all claim records for the
         Company, including the "paper" claim file (which will include the
         original investigative information, medical and wage information,
         doctors reports, legal notices, etc.) and the electronic claim file.
         The Manager will be responsible for maintaining these records and will
         serve as the Company's custodian of records. The Manager will be
         responsible for the maintenance of records for files and items that are
         sent to off site storage. The Manager will track all losses that have
         been settled via an annuity or structure basis and will retain records
         related to these types of settlements.

                  3. The Manager, in consultation with the Company, will
         maintain competent and adequate staff to manage the run off of the
         portfolio of the Company's losses. The Manager will initially set, and
         periodically update, internal procedures, providing them to the Company
         for approval, which will outline the Manager's "best claim handling
         practices/standards" requirements. Those procedures should include
         requirements relating to the following areas:

                                      -7-

<PAGE>



                            -      File creation, closing, and reopening,
                                   including computer system input and paper
                                   file maintenance.
                            -      Diary maintenance, size and frequency.
                            -      Investigation requirements and file
                                   documentation.
                            -      Mail processing standards.
                            -      Coverage confirmation, coverage issue
                                   recognition, ROR issuance, declination
                                   issuance, etc.
                            -      Reserve calculations, timing, authorities,
                                   etc.
                            -      Payment approval (double signature required
                                   over $1,000), timing, authority, etc.
                            -      Vendor assignment guidelines, criteria and
                                   auditing.
                            -      Subrogation/Salvage/3rd party recovery
                                   analysis, tracking, follow up and collection.
                            -      SDTF recovery analysis, tracking, follow up
                                   and collection.
                            -      Reinsurance administration including, but not
                                   limited to premium calculation, audits, loss
                                   reporting, updating, billing and collection.

                  If additional areas develop that need to be addressed, the
         Manager will set a new and appropriate procedure to be implemented,
         which will submitted to the Company for approval.

                  4. The Manager will follow the authority guidelines for
         reserve and payment as outlined in the following business specific
         sections. The Manager shall provide appropriate notice and information
         to the Company when seeking authority as spelled out in these sections.
         The Manager will submit a written request for the authority to the
         Company. The format of the authority request and the type of
         information required, whether in the submission or as an attachment,
         will be addressed on a case by case basis. The Company will return a
         signed copy of this authorization request, either confirming or
         adjusting the item(s) requested, prior to the Manager actually
         performing the requested authority (i.e.-booking reserves or making an
         offer of settlement above the stated authority level). At no time will
         the Manager have the requested authority unless they have a signed
         acknowledgment from the Company.

                  5. The Manager will use only vendors that have been approved
         by the Company. A list of the approved vendors may be periodically
         updated by written request of the Manager.

                  6. The Manager will provide prompt notice to the Company of
         all situations where it becomes known to the Manager that:

                            -      a claim, demand, action, suit or proceeding
                                   has been brought, threatened, commenced or
                                   made against the Company on matters that the
                                   Manager is handling on behalf of the Company.
                            -      a claim's potential exceeds the authority
                                   limits for reserve changes and payments as
                                   set forth in the business specific sections
                                   of this Exhibit.

                                       -8-

<PAGE>



                            -      a potential coverage dispute may arise that
                                   would warrant the seeking of a coverage
                                   opinion from counsel, the issuance of a
                                   Reservation of Rights letter or the
                                   declination of coverage. The Company will be
                                   informed prior to the Manager's final
                                   communication to the insured.
                            -      a claim will be adjudicated by arbitration,
                                   mediation, or court/tribunal of jurisdiction.
                                   The Manager will give at least one (1) month
                                   notice prior to the scheduled proceedings
                                   date to the Company, such notice to include
                                   an appropriate action plan for the Company's
                                   consideration.
                            -      a claim is being disputed or has gone
                                   uncollected from a reinsurer for longer than
                                   180 days from the date of initial billing.
                            -      a SDTF "approved" recovery has not been
                                   collected within three (3) years from its
                                   initial submission.
                            -      a claim has been closed by payment of an
                                   amount awarded by final judgment by a
                                   tribunal of competent jurisdiction.

                  7. The Manager has no authority to subcontract any
         "traditional" claim activities to a non-party to this agreement without
         the express written consent of the Company.

                  PRIMARY WORKERS COMPENSATION

                  1. The Manager's reserve and payment authority on a per file
         basis limits the ability of the Manager to adjust the individual case
         incurred development with out the express consent of the Company. When
         suggesting changes above the Manager's stated authority, the Manager
         needs to provide to the Company the complete payment and reserve
         history for consideration. In addition thereto, the Manager should
         provide a report that includes the insured's information, claimant's
         information, description of accident, date of loss, date of report to
         Manager or Manager's predecessor, relevant coverage information, nature
         of injury, prognosis, current medical developments, current work
         status, litigation status, current reserve and paid information,
         recommended change, current reinsurance status, SDTF information, and
         the Manager's action plan.

                  2. The Manager will review all open losses on a regular diary.
         Every open file will be assigned to and reviewed by a handler of
         competent knowledge and skill for the loss involved. In addition to the
         assigned handler, a "claim supervisor" will oversee the handler's
         activities and will be required to review every open file at least
         twice during an annual period. The claim supervisor will be responsible
         for ensuring that "best claim practices" are being followed and that
         outstanding reserves are adequate.

                  3. The Manager will maintain a booklet/binder, which will be
         periodically (at a minimum annually) updated, of all open losses with
         incurred amounts greater than $250,000 for the Company's benefit and
         use. The Company will receive the periodic updates on the open losses.
         If a claim that meets criteria to be included in this booklet and
         subsequently closes, the Manager will provide a closing update to the
         Company.



                                       -9-

<PAGE>



                  4. The Manager will have authority to pay medical providers,
         approved vendors, claimant's periodic indemnity payments, etc.
         associated with the day to day administration of business. That said,
         if the amount involved exceeds the stated authority level, the Manager
         is required to obtain the Company's written authority prior to settling
         the related matter.

                  5. The Manager has authority to pay up to $50,000 for
         indemnity and $100,000 for medical on a per transaction basis. That
         said, if the payments result in a change to incurred of $50,000, the
         Manager needs to obtain authority from the Company. Any amount in
         excess of these amounts requires the Company's prior written approval.

                  6. The Manager has authority to change reserves, either
         increase or decrease, by $50,000 on a per file basis. If payments and
         reserve adjustments over the twelve (12) prior months has resulted in
         the decrease of $50,000 to the reserves, the Manager is required to
         reevaluate the reserve adequacy of the file and report to the Company
         accordingly.

                  7. The Manager will not commute future liabilities by
         accelerating payments without the express written consent of the
         Company.

                  EXCESS WORKERS COMPENSATION

                  1. The Manager will have on staff a person(s) of appropriate
         background and knowledge to address this diverse and complex book of
         business.

                  2. The Manager will secure the necessary information to
         evaluate the Company's exposure under these policies. If that
         information is not available via reports from the various insureds, the
         Manager will advise the Company that an audit is required. The Manager
         will give the Company the option to participate in the audit. That
         said, the Manager will be responsible to complete the audit and provide
         an detailed report of findings to the Company.

                  3. The Manager will have authority to the insured various
         items due that are within the Manager's authority level and associated
         with the day to day administration of business. That said, if the
         amount involved exceeds the stated authority level, the Manager is
         required to obtain the Company's written authority prior to settling
         the related matter.

                  4. The Manager has authority to pay up to $50,000 on a per
         transaction basis. That said, if the payments result in a change to
         incurred of $50,000, the Manager needs to obtain authority from the
         Company. Any amount in excess of these amounts requires the Company's
         prior written approval.

                  5. The Manager has authority to change reserves, either
         increase or decrease, by $50,000 on a per file basis. If payments and
         reserve adjustments over the twelve (12) prior months has resulted in
         the decrease of $50,000 to the reserves, the Manager is required to
         reevaluate the reserve adequacy of the file and report to the Company
         accordingly.


                                      -10-

<PAGE>


                  6. The Manager will not commute future liabilities by
         accelerating payments without the express written consent of the
         Company.

                  OTHER LIABILITY

                  1. The Manager will have on staff a person(s) of appropriate
         background and knowledge to address this diverse and complex book of
         business.

                  2. Every newly reported loss will be evaluated upon receipt
         and determined if there are any coverage issues. The Manager will put
         in place appropriate procedures to ensure that coverage in fact exists
         and that the loss being reported is a covered item.

                  3. The Manager will maintain the computer system that was in
         use when the coverage was bound and/or provide for the conversion and
         preservation of theses records. In this regard, the Manager will ensure
         that all loss activity that was booked to this system is maintained and
         referred to during the adjustment of the currently open or newly
         reported losses.

                  4. The Manager will maintain a booklet/binder, which will be
         periodically (at a minimum annually) updated, of all open losses
         regardless of the reserve amount for the Company's benefit and use. The
         Company will receive the periodic updates on the open losses. If a
         claim that meets criteria to be included in this booklet and
         subsequently closes, the Manager will provide a closing update to the
         Company. The content of these individual reports will include insured
         information, claimant(s) information, description of accident, date of
         loss, date of report to Manager or Manager's predecessor, all coverage
         information, litigation information, reserve and payment information,
         current status and action plan.

                  5. The Manager has authority to settle losses up to $50,000
         that have been properly investigated and evaluated for adjudication.
         That said, if the settlement will result in the total paid amount in
         excess of $50,000, the Manager must request authority from the Company
         prior to entering into negotiations.

                  6. The Manager has authority to reserve individual losses up
         to $100,000 on a per policy basis. If the Manager believes that the
         reserve should be greater than $100,000, they should request authority
         from the Company prior to posting the reserve.





                                      -11-