MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED


                                     NOTICE


NOTICE is hereby given that the Eleventh  Annual Meeting of the  Shareholders of
MOTORS  MECHANICAL  REINSURANCE  COMPANY,  LIMITED  will be held at the  Miramar
Conference  Centre,  Royal Pavilion Hotel,  St. James,  Barbados on Thursday the
23rd day of April, 1998 at 12:00 noon for the following purposes:


1.   Adoption of minutes of previous meeting of Shareholders held on March 27th,
     1997.

2.   To receive and consider  the  financial  statements  of the Company for the
     twelve month period ended  December 31, 1997 together with the  independent
     auditors' report thereon.

3.   To elect directors.

4.   To consider the proposal to amend the Restated Articles of Incorporation.

5.   To  confirm  the   appointment  of  Deloitte  &  Touche  as  the  Company's
     independent auditors for the year ended December 31, 1998.

6.   To conduct any other  business that may properly be transacted at an annual
     meeting.




                        DATED THE 27th DAY OF MARCH, 1998

                              BY ORDER OF THE BOARD





                                Michael R. Boyce
                                 AS SECRETARY OF
                 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED


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                 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED
                         Annual Meeting April 23rd, 1998

                                 PROXY STATEMENT
                                March 27th, 1998


     This proxy  statement  is  furnished  by  management  of Motors  Mechanical
Reinsurance Company, Limited (the "Company") in connection with the solicitation
of  proxies  for use at the annual  meeting  of the  Company to be held on April
23rd, 1998 at 12:00 noon at the Miramar Conference Centre, Royal Pavilion Hotel,
St. James,  Barbados.  Please  complete and return the attached proxy whether or
not you plan to attend the meeting.  A proxy may be revoked at any time prior to
the meeting in writing or by attendance of the shareholder at the meeting.

     Shareholders  of record as of the date of this proxy statement are entitled
to  notice  and to vote at the  meeting.  As of such  date,  there  were  28,700
participating  shares outstanding,  held by 487 persons representing 287 series.
All the common  stock is held by Motors  Insurance  Corporation  ("MIC"),  which
organized the Company.  Each share entitles the holder to one vote on matters on
which that class of stock is entitled to vote.

     This proxy  statement is  accompanied  by notice of the meeting,  financial
statements for the year ended December 31, 1997 and a form of proxy.


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                              ELECTION OF DIRECTORS


     The  Company  has a board of  directors  consisting  of six  members.  Five
directors,  of whom one is a resident of Barbados,  are elected by the holder of
the common  shares and one  director is elected by holders of the  participating
shares.  Directors serve without compensation other than reimbursement of actual
expenses. They are elected for one year terms.

     Mr.  William  Bradshaw has been nominated to stand for election as director
by the participating shareholders.  Other nominations can be made by the holders
of at least two series of  participating  shares by notifying  the  secretary in
writing  at least ten days  prior to the  meeting.  The  nominee  receiving  the
highest number of votes will be elected.

     In addition,  five directors will be elected by the common shareholder.  It
is  anticipated  that MIC will  choose to re-elect  William B. Noll,  Bernard J.
Buselmeier,  Louis S. Carrio,  Jr., John J. Dunn,  Jr. and Peter R.P.  Evelyn to
serve as directors.

     Information  regarding the age and current  occupation of persons nominated
to be elected or  re-elected  as  directors  by the common  shareholder  and the
person nominated to be elected as director by the participating  shareholders is
set forth below.

                                         Position with the Company and Other
      Name                 Age          Employment During the Past Five Years

William B. Noll             55                President & Director
                                        (President,  GMAC Insurance  Holdings
                                        Inc., 1997,  Executive Vice President
                                        & Chief Financial Officer,  MIC,
                                        March 1993; Group Vice President, MIC,
                                        1991-1993; Vice President, MIC,
                                        1989-1990).

                                        Mr. Noll has been President & Director
                                        since 1995.

Louis S. Carrio, Jr.        54          Vice President and Director
                                        (Vice President, MIC).

                                        Mr. Carrio has been a Vice President
                                        & Director since 1991.

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                                      - 2 -

Bernard J. Buselmeier       42          Vice President & Director
                                        (Executive Vice President & Chief
                                        Financial Officer, Integon Insurance
                                        Group, from April 1998; Vice President
                                        & Treasurer, MIC, 1993-1998; and
                                        Treasurer, MIC, 1989-1993).

                                        Mr. Buselmeier has been Vice
                                        President and Director since 1995.

John J. Dunn, Jr.           39          Vice President & Director
                                        (Vice President & Treasurer, MIC,
                                        from April 1998; Assistant Treasurer,
                                        MIC, 1995-1998; Manager, Coopers &
                                        Lybrand L.L.P., 1990-1995)

                                        Mr. Dunn has been Vice President and
                                        Director since 1996.

Peter R.P. Evelyn           56          Director
                                        (Attorney, Evelyn Gittens & Farmer,
                                        A Barbados Law firm).

                                        Mr. Evelyn has been a Director
                                        since 1986.

William Bradshaw            37          Nominee for Director to be elected by
                                        the participating shareholders.
                                        (Bradshaw Automotive Group, Greer,
                                        South Carolina)


                AMENDMENTS OF RESTATED ARTICLES OF INCORPORATION

Allocation of Operating Expenses

     Under the terms of the Company's  Restated  Articles of  Incorporation,  no
expenses relating to ordinary day-to-day operations of the Company are allocated
to the Subsidiary  Capital Account of a series of Shares for the period from the
date of issuance of the Shares to the fiscal year end immediately following such
date.  Management has determined that this provision can artificially  influence
the timing of the  purchase of Shares.  In order to prevent  such an  unintended
incentive,  Management  proposes that the Articles be amended to provide that no
operating  expenses shall be allocated to the Subsidiary  Capital  Account for a
series of Shares for the first four fiscal  quarters that end after the issuance
of the Shares.

     Accordingly,  Management  proposes that the Company's  Restated Articles of
Incorporation be amended to read as follows:


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                                      - 3 -

         Section 3(1)(2)

             Any expenses or  liabilities  attributable  to ordinary  day-to-day
         Company  operations,  excluding any United States Federal income taxes,
         shall be allocated among all Subsidiary Capital Accounts for the Shares
         pro rata on the basis of the number of series issued and outstanding at
         the end of the fiscal  quarter in which the  expense  or  liability  is
         incurred,  provided  that for  purposes of such  allocation,  series of
         Shares issued at any time during the twelve calendar  months  preceding
         the end of the fiscal  quarter in which the  expense  or  liability  is
         incurred, and series with respect to which the unearned premium is zero
         as of such date, shall be excluded.

Restricted Earned Surplus

     Under  the  terms of the  Company's  Restated  Articles  of  Incorporation,
Restricted Earned Surplus generally is equal to the amount of premiums allocated
to the  Subsidiary  Capital  Account  for the  Common  shares  during a  rolling
five-year  period,  reduced by the amount of deficits  allocated to such Account
during such  five-year  period.  In order to  accelerate  the point in time when
earnings attributable to the Common shares become available to absorb Subsidiary
Capital  Account  deficits,  Management  has  determined  that,  for purposes of
determining  Restricted Earned Surplus,  reductions for deficits should be taken
into  account  only to the extent  that they  relate to amounts  credited to the
Subsidiary  Capital  Account for the Common shares during the rolling  five-year
calculation period.  Management believes that this rule should be implemented at
the earliest time possible  taking into account the  Company's  past  accounting
practices with respect to Restricted  Earned  Surplus.  Accordingly,  Management
proposes  that,  effective as of January 1, 1997,  the  definition of Restricted
Earned  Surplus  contained  under  "Definitions"  in Section 3 of the  Company's
Restated Articles of Incorporation should be amended as follows:

                  Restricted  Earned  Surplus  - - At any  point  in  time,  the
                  portion  of the  earned  surplus,  if any,  in the  Subsidiary
                  Capital  Account for the Common  shares equal to: (i) premiums
                  allocated  to the  Subsidiary  Capital  Account  of the Common
                  shares  during  the  immediately  preceding  five-year  period
                  pursuant to Section 3(1)(1)(a), plus (ii) deficits restored to
                  such   Account   during  such   period   pursuant  to  Section
                  3(1)(7)(c),  less  (iii)  return  premiums  allocated  to such
                  account during such period pursuant to Section 3(1)(1)(d), and
                  less (iv)  deficits  allocated  to such  account  during  such
                  period  pursuant to Section  3(1)(7)(a)(i)  to the extent that
                  they  relate to amounts  described  in clauses (i) and (ii) of
                  this definition.


                        ELECTION OF INDEPENDENT AUDITORS

     The Board of Directors proposes that the shareholders confirm the selection
of Deloitte & Touche, Bridgetown, Barbados, as independent auditors to audit the
financial  statements  of the  Company  for the year ended  December  31,  1998.
Deloitte & Touche has served as the  Company's  independent  auditors  since its
inception  in 1986.  Representatives  of  Deloitte & Touche are  expected  to be
present at the Annual Meeting of Shareholders.


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                                    P R O X Y

                 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED

     I/We,                      , a member  of the  above-named  company  hereby
appoint Ronald W. Jones,  Vice President,  Finance of the Company or failing him
Michael R. Boyce, Secretary of the Company, as my/our proxy to vote for me/us on
my/our behalf at the  shareholders  meeting to be held on the 23rd day of April,
1998 or at any adjournment thereof and in particular to vote for:

         (i)  The election of Mr. William Bradshaw to serve as a director
         representing the participating shareholders.
         (ii) The adoption of amendments to the Company's  Restated  Articles of
         Incorporation  as they relate to Allocation  of Operating  Expenses and
         Restricted  Earned  Surplus  computations.  (iii) The  confirmation  of
         Deloitte & Touche as the  independent  auditors  of the Company for the
         current fiscal year.



                           Dated this ________ day of __________, 1998.


------------------------------                      ---------------------------
Signature                                                    Print Name

         As a Shareholder in Series # __________
         (for identification purposes, please indicate the
         series in which you are a shareholder)




Completed  Proxy forms should be returned  either by facsimile or overnight mail
to the Company's Barbados address as follows:

         c/o Aon Insurance Managers (Barbados) Ltd.
         Financial Services Centre, P.O. Box 1304,
         Bishops Court Hill,
         St. Michael, Barbados, W.I.
         Facsimile #:  (246) 436-9016



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                                      PROXY


                 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED


         MOTORS  INSURANCE  CORPORATION,  a member of the  above-named  company,
hereby appoints John J. Dunn, Jr., Director of the Company or failing him Robert
E. Capstack,  Alternate Director of the Company for Louis S. Carrio, Jr., as its
proxy to vote for it on its behalf at the shareholders meeting to be held on the
23rd day of April, 1998 or at any adjournment thereof.

                           Dated this ________ day of __________, 1998



                               MOTORS INSURANCE CORPORATION



                               By______________________________


                               ________________________________
                               Print Name

                               ________________________________
                               Title



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