MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED
                Special Meeting of the Shareholders June 21, 1996

                                 PROXY STATEMENT
                                  May 24, 1996


          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 a special meeting of the Shareholders to be held on June
21, 1996 at 10:00 am. at the offices of Alexander Insurance Managers (Barbados)
Ltd., Financial Services Centre, Bishop's Court Hill, St. Michael, 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
24,700 participating shares outstanding, held by 423 persons representing 247
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. The adoption of each
of the proposals described in this Proxy Statement requires the affirmative vote
of MIC and the affirmative vote of the holders of a majority of the
participating shares present at the meeting at which the proposal is voted on.

          This proxy statement is accompanied by notice of the meeting and a
form of proxy.


                            AMENDMENT OF BY-LAW NO. 1

At the 19th Directors' Meeting held on April 11, 1996 the Board approved a
clarification to ByLaw 6.1 by the addition of the word "directors" immediately
before the word "meetings" in line 3 of that By-Law. Consequently the Board of
Directors proposes that the shareholders approve the amendment to By-Law 6.1 to
read as follows:

     6.1  Place of meeting: Meetings of the directors and of any committee of
the directors may be held within or outside Barbados provided that no such
meeting shall be held in the United States of America and a majority of
directors meetings held each year shall be in Barbados.


                 AMENDMENT OF RESTATED ARTICLES OF INCORPORATION

Under the terms of the Company's Restated Articles of Incorporation, each series
of Shares bears the cost of the ordinary day-to-day operations of the Company,
excluding any United States Federal Income Taxes, based on a pro rata allocation
in accordance with the relative earned premiums allocated to such accounts for
the fiscal quarter in which the expense or liability is incurred.

At a meeting of the Board of Directors held in Barbados on April 11, 1996 the
Board reviewed this methodology of allocation of operating expenses with due
consideration for the total amounts of expense currently incurred by the
Company, the number of series participating in the allocation process and the
relationship between expenses incurred and the activity relative to each series.

In considering all of the above, the Board determined that the Company has
reached a level of maturity and operation whereby it would be more equitable for
day to day operating expenses to be allocated equally amongst the number of
series outstanding at the quarter end immediately preceding the quarter in which
the costs are incurred.

During fiscal 1995, the allocation of operating expenses based on relative
earned premiums resulted in amounts being charged to the Subsidiary Capital
Accounts of outstanding series ranging from zero to US$17,556. Under the
proposed revised allocation methodology each series would bear its pro rata
share based on the number of series outstanding. This methodology would have
resulted in the allocation to each series of approximately US$2,300 in fiscal
1995.

The Board has also recommended that to facilitate the marketing of shares,
subscribers of new series of Shares would not incur an allocation of operating
expense during the period from the date of issue of the Shares to the fiscal
year end immediately following such date. In addition, for series in run-off,
the Board has recommended that the allocation of operating expenses cease and
become zero in the quarter in which the series reflects a fully earned position.

The Board of Directors, including the Director representing the Participating
Shareholders, unanimously recommend to the shareholders the adoption of the
proposed revision to the Company's Restated Articles of Incorporation which they
believe represents an equitable allocation of the Company's operating expenses
amongst series of shares for the Company's current and future level of
operation.

In accordance with the foregoing, the Directors propose that the Company's
Restated Articles of Incorporation be amended to read as follows:

     Section 3(1)(2)

     (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 in accordance with
the number of series issued and outstanding at the end of the fiscal quarter
immediately preceding the fiscal quarter in which the expense or liability is
incurred, provided, that for purposes of such allocation, series of shares
issued during the current calendar year and series with respect to which
unearned premium is zero as of the date of such allocation, shall be excluded.


                                    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
21st day of June, 1996 or at any adjournment thereof and in particular to vote
for:

     (i)  The confirmation of the amendment to By Law 6.1 as contained in the
          proxy statement dated May 24, 1996.

     (ii) The approval of the amendment of the Company's Restated Articles of
          Incorporation as contained in the proxy statement dated May 24, 1996.


          Dated this _______day of _________________, 1996.



------------------------------              --------------------------------
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 Alexander Insurance Manager (Barbados) Ltd.
     Financial Services Centre, P.O. Box 1304
     St. Michael, Barbados, W.I.
     Facsimile #:  (809) 436-9016


                                      PROXY


                 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED


          MOTORS INSURANCE CORPORATION, a member of the above-named company,
hereby appoints Peter R.P. Evelyn, Director of the Company or failing him
Michael R. Boyce, Secretary of the Company, as its proxy to vote for it on its
behalf at a special meeting of the shareholders to be held on the 21st day of
June, 1996 or at any adjournment thereof. This Proxy is given specifically and
for the sole purpose of voting in favour of the amendment to the Company's
By-Law 6.1 concerning the location of meetings and amendment to the Company's
Restated Articles of Incorporation concerning the allocation of the Company's
day-to-day operating expenses.


                 Dated this ________ day of __________, 1996.


                          MOTORS INSURANCE CORPORATION


                          By______________________________


                          --------------------------------
                          Print Name

                          --------------------------------
                          Title


                 MOTORS MECHANICAL REINSURANCE COMPANY, LIMITED


                                     NOTICE


NOTICE is hereby given that a Special Meeting of the Shareholders of MOTORS
MECHANICAL REINSURANCE COMPANY, LIMITED will be held at the office of Alexander
Insurance Managers (Barbados) Ltd., Financial Services Centre, Bishop's Court
Hill, St. Michael, Barbados on the 21st day of June, 1996 at 10:00 am. for the
following purpose:

          (i)  To consider the proposal to amend By-Law 6.1

          (ii) To consider the proposal to amend the Restated Articles of
               Incorporation.


                     DATED THE      DAY OF           , 1996

                              BY ORDER OF THE BOARD


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