COINSURANCE AGREEMENT
      
           This Coinsurance Agreement ("Agreement") is made and entered into by
      World Service Life Insurance Company of America ("World Service" or the
      "Company") and American Capitol Insurance Company ("Reinsurer").

                                       Recitals

      A.   World Service is an Alabama domiciled stock life insurance company.

      B.   As of the Effective Date of this Agreement, World Service has in
           effect "Policies" as hereinafter defined, the holders of which
           reside in six (6) states in which World Service is licensed and
           otherwise qualified to do business.

      C.   Reinsurer is a Texas domiciled stock life insurance company licensed
           or otherwise qualified to do business in all jurisdictions where
           holders of the Policies reside except Tennessee and Kentucky.

      D.   In accordance with the terms and conditions as set forth in this
           Agreement, World Service desires that Reinsurer reinsure a portion
           of the future liabilities arising under the Policies and Reinsurer
           desires to reinsure such portion of the future liabilities arising
           under the Policies as more specifically set forth in this Agreement.

      E.   Prior to the drafting of this particular Agreement, the parties
           entered into an agreement known as the "Agreement and Reinsurance
           and Assumption" dated May 9, 1996, and effective on the Effective
           Date hereof (the "Assumption Agreement") and subsequently modified
           said agreement by entering into an agreement known as the
           "Reinsurance Agreement" also effective on the Effective Date (the
           "Reinsurance Agreement").  This Agreement is for the purpose of
           consolidating the said two agreements into a single, "stand-alone"
           document.  Accordingly, this Agreement supersedes the Assumption
           Agreement and the Reinsurance Agreement and said two agreements
           shall be referred to for interpretation purposes as set forth in
           Section 14.21 below.  The parties' intention is that this Agreement
           has the effect of said two agreements and by and large the language
           of said two agreements has been transferred to this Agreement.
           Nevertheless, some of the language and provisions of said two
           agreements have been altered or deleted to account for the passage
           of time and the fact that some of the provisions of the Assumption
           Agreement have been rendered moot by virtue of the changes made by
           the Reinsurance Agreement.  The future tense is sometimes used in
           this Agreement in order to capture language that was appropriate at
           the time, even though this document is drafted by the parties in
           October, 1996, and many of the identified events and conditions have
           transpired or changed.

                                 Terms and Conditions

           In consideration of the mutual benefits to be received by the
      parties hereto and the mutual covenants and agreements contained herein,
      the parties agree that the recitals set forth above are hereby adopted
      and made a part of this Agreement, and further agree to the following
      terms and conditions:

                                          1

<PAGE>
                                      Article I
                                     Definitions

           Except as defined elsewhere in this Agreement, terms used with
      initial capitalization when the rules of grammar or form would not so
      require have the meanings set forth below:
      
      (a)  The term "Policies" shall mean all of World Service's life insurance
           and annuity policies in force with issue dates prior to the
           Effective Date on such policy forms and plans as were used in the
           May 31 Actuarial Appraisal, and which individually shall be referred
           to as "Policy."  In addition, World Service continues to market
           policies on and subsequent to the Effective Date, which policies are
           included in the definition of the "Policies" or "Policy" except as
           to policies marketed subsequent to the termination of the marketing
           arrangement between the parties as provided in Section 9.1 below, or
           as to policies otherwise excluded from the marketing arrangement as
           provided in Section 9.1(d) below.  If the South Texas Bankers
           Policies are added to the Policies as set forth in Section 14.4
           below, such polices shall include all of South Texas Bankers life
           insurance and annuity policies in force with issue dates prior to
           the Effective Date on such policy forms and plans as were used in
           the May 31 Actuarial Appraisal.

      (b)  The term "Transfer Value" means the consideration to be transferred
           to Reinsurer from World Service, not including the effect of the
           Ceding Fee, as set forth in Section 4.1.

      (c)  The term "Ceding Fee" has the meaning set forth in Section 4.2.

      (d)  The terms "Reserves" and "IBNR Claims Reserves" have the meaning set
           forth in Section 10.5.

      (e)  The term "Closing" has the meaning set forth in Section 13.1.

      (f)  The term "Closing Date" has the meaning set forth in Section 13.2.

      (g)  The term "Commissions" has the meaning set forth in Section 3.4.

      (h)  The term "Reinsured Policy Obligations"  or "Policy Obligations"
           means benefits under and by virtue of the terms of the Policies that
           arise and become payable on account of a death or other event
           covered by the terms of the Policies occurring on or after the
           Effective Date, and as further defined in Section 2.2.

      (i)  "Reinsurer's Portion," "Company's Portion" and "Coinsurance Ratio"
           have the meanings set forth in Section 2.1, subject to the revisions
           in Section 14.4 as, if and when the South Texas Bankers policies are
           assumed by World Service as provided in Section 14.4.

      (j)  "Assumption Agreement" and "Reinsurance Agreement" have the meaning
           set forth in the above Recitals.

      (k)  "Administration Agreement" has the meaning set forth in Section 2.2.

      (l)  The terms "Defense" or "Defenses" means any (i) known or unknown,
           actual or contingent, rights, defenses, offsets, counterclaims, and
          
                                          2
<PAGE>
           cross-actions, and (ii) any and all rights, limitations, terms,
           conditions, and provisions provided for in this Agreement relative
           to the assumption of the Policies.

      (m)  The term "Effective Date" means June 1, 1996.

      (n)  The term "Documents and Records" has the meaning set forth in
           Section 12.4.

      (o)  The term "December 31 Actuarial Appraisal" means the actuarial
           appraisal prepared by Actuarial Resources Corporation based on the
           insurance and annuity polices in force in World Service as of
           December 31, 1995, and referred to therein as the "WSL05" policies,
           prepared as of April 9, 1996, and delivered to Reinsurer April 16,
           1996.

      (p)  The term "May 31 Actuarial Appraisal" has the meaning set forth in
           Section 4.2.

      (q)  The term "South Texas Bankers" means South Texas Bankers Life
           Insurance Company, a Texas life insurance corporation which is a
           wholly owned subsidiary of World Service.

      (r)  The term "South Texas Bankers Agreement" means a Reinsurance and
           Assumption Agreement (similar to the Assumption Agreement) entered
           into between Reinsurer and South Texas Bankers on or about the same
           date as the Assumption Agreement was entered into, and was  closed
           by the parties on the same date as the Closing Date of this
           Agreement, subject to regulatory approval.
      
                                      Article II
                          Reinsurance of Policy Obligations

           Section 2.1.  Ceding.  Subject to the terms and conditions of this
      Agreement, the Company hereby cedes to Reinsurer and Reinsurer hereby
      reinsures Ninety Three and Sixty Hundredths percent (93.60%) (the
      "Reinsurer's Portion") of the Policy Obligations.  The portion of the
      Policy Obligations not reinsured is sometimes referred to herein as the
      "Company's Portion" and the numerical relationship (93.60/6.40) is
      sometimes referred to herein as the "Coinsurance Ratio."  (Referring to
      Section 14.4 below, in the event the Company assumes the South Texas
      Bankers Policies, the Coinsurance Ratio shall change, retroactive to the
      Effective Date, in accordance with Section 14.4 below.)  Apart from the
      Policy Obligations allocated between the Reinsurer and the Company in
      accordance with the Coinsurance Ratio, the Company shall continue to have
      all liabilities not specifically reinsured by the Reinsurer hereunder,
      including any liabilities relating to pre-need contracts issued in
      connection with the Policies, and the Company shall indemnify the
      Reinsurer and hold the Reinsurer harmless from all liabilities not
      specifically reinsured by the Reinsurer hereunder, including any costs
      incurred by the Reinsurer in respect to claims or litigation involving
      any such liabilities not specifically reinsured by the Reinsurer
      hereunder.

           Section 2.2.  Standard of Performance; Liability.  Concurrently with
      the Effective Date of this Agreement, Reinsurer and the Company have
      entered into a "Policy Administration and Data Processing Services
     
                                          3
<PAGE>
      Agreement," attached hereto as Exhibit 3.1 ("Administration Agreement.") 
      Beginning on the Effective Date, Reinsurer shall be liable for the
      payment of the Reinsurer's Portion of the Policy Obligations.  Except for
      payments of claims relating to IBNR claims as set forth in Section 4.1,
      Reinsurer shall not be liable for any claims or Policy benefits that
      arise or become payable by virtue of a death or other event occurring
      before the Effective Date.  Reinsurer shall not be liable for any
      actions, inactions, errors, or omissions made by World Service, and any
      of its respective employees, agents, and representatives in the
      solicitation, sale, servicing, renewal, or processing of any claim under
      the Policies or in communications with insureds, beneficiaries, or any
      other third party with respect to the Policies or otherwise.

           Section 2.3.  Duration of Risk.  Except as otherwise provided
      herein, this Agreement shall be unlimited in duration.

           Section 2.4.  Reinsurer's Liability.  The Reinsurer's Portion of the
      liability with respect to any Policy will begin simultaneously with that
      of the Company's, but not prior to the Effective Date of this Agreement. 
      The Reinsurer's Portion of the liability with respect to any Policy will
      terminate simultaneously with that of the Company's.

           Section 2.5.  Recapture.  The Reinsurer's Portion of the Policies is
      eligible for recapture commencing after the twelfth (12th) consecutive
      month of this Agreement provided the Company gives the Reinsurer ninety
      (90) days advance notice as set forth below of its intent to recapture
      such policies, and further provided that:  (a)  such recapture comprises
      all of the Policies, (b) such notice designates the effective date of the
      intended recapture (which date shall be the end of a month that ends
      after the expiration of the aforesaid ninety (90) day period), (c) the
      Company pays the Reinsurer a recapture fee to be determined as of the
      effective date of the recapture and (d) such recapture fee shall be an
      amount equal to the sum of (i) the value of the Reinsurer's Portion of
      the Policies that is being recaptured determined by an actuarial
      valuation performed in respect to the Policies as of the effective date
      of the recapture subject to such valuation being acceptable to and agreed
      to by both the Company and the Reinsurer, the cost of which shall be
      borne by the Company, plus (ii) a recapture "premium" in an amount equal
      to twenty-three percent (23%) of the value determined by said actuarial
      valuation, plus (iii) all amounts due to the Reinsurer from the Company
      as a result of the Monthly Cash Settlements as set forth in Section 5.3
      below through the effective date of recapture.  In the event of recapture
      as aforesaid, the Company shall assume and be responsible for all
      liabilities of the recaptured Policies and all administration and data
      processing responsibilities relating thereto, thereby totally and
      absolutely relieving the Reinsurer, as of the effective date of such
      recapture, of all of its responsibilities and liabilities otherwise
      existing by virtue of this Agreement.  The Reinsurer shall transfer to
      the Company within thirty (30) days following the effective date of the
      recapture assets equal to the Reinsurer's Portion of the liabilities of
      the recaptured Policies.  Such assets shall consist of the policy assets
      associated with the Reinsurer's Portion of the Policies (i.e., policy
      loans and due and deferred premiums) and the balance, at the election of
      the Reinsurer, shall consist of cash, or investment grade bonds valued so
      as to have a yield to maturity equal to seven percent (7%), or the
      mortgage loans heretofore transferred to the Reinsurer by the Company in
      connection with the Assumption Reinsurance Agreement (valued at the

                                          4
<PAGE>
      aggregate amount of the loan balances of said loans at the effective date
      of the recapture), or a combination thereof.

           Section 2.6.  Election to Transfer Company's Portion to Reinsurer. 
      At any time, the Company may elect to transfer the Company's Portion of
      the Policy liabilities to the Reinsurer ("transfer") provided that: (a) 
      such transfer comprises all of the Company's Portion of the Policy
      liabilities, (b) such notice designates the effective date of the
      intended transfer (which date shall be the end of a month), (c) the
      Reinsurer pays the Company a transfer fee to be determined as of the
      effective date of the recapture and (d) such transfer fee shall be an
      amount equal to (i) the value of the Company's Portion of the Policies
      that is being transferred determined by an actuarial valuation performed
      in respect to the Policies as of the effective date of the transfer
      subject to such valuation being acceptable to and agreed to by both the
      Company and the Reinsurer, the cost of which shall be borne by the
      Company, less (ii) all amounts due to the Reinsurer from the Company as a
      result of the Monthly Cash Settlements as set forth in Section 5.3 below
      through the effective date of transfer.  In the event of transfer as
      aforesaid, the Reinsurer shall assume and be responsible for the
      Reinsurer's Portion as well as the Company's Portion of the Policy
      liabilities (as of the effective date of such transfer) and shall
      continue to perform all administration and data processing
      responsibilities relating thereto.  Except for the fact that the
      Reinsurer's Portion of the Reinsured Policy Obligations shall increase to
      100% as a result of such transfer if it occurs, the Company shall
      continue to have all liabilities not specifically included in the
      Reinsurer's Portion as so increased, including any liabilities relating
      to pre-need contracts issued in connection with the Policies, and the
      Company shall indemnify the Reinsurer and hold the Reinsurer harmless
      from all liabilities not specifically reinsured by the Reinsurer
      hereunder, including any costs incurred by the Reinsurer in respect to
      claims or litigation involving any such liabilities not specifically
      reinsured by the Reinsurer hereunder.  The Company shall transfer to the
      Reinsurer no later than the effective date of the transfer assets equal
      to the Company's Portion of the liabilities of the Policies.  Such assets
      shall consist of the policy assets associated with the Company's Portion
      (i.e., policy loans and due and deferred premiums) and the balance shall
      be cash.
      
                                     Article III
                                    ADMINISTRATION

           Section 3.1.   Administration.  The Reinsurer shall perform the
      policy  administration and data processing services for the Policies
      beginning on the Effective Date in accordance with the Administration
      Agreement as set forth in Exhibit 3.1.  The Reinsurer shall be entitled
      to collect and retain a servicing fee as set forth in said Exhibit 3.1.

            Section 3.2.  Policy Loans.  The Company and the Reinsurer shall
      share monthly all interest earned, on an incurred basis, on any of the
      outstanding policy loans on the Policies.  The Company shall pay to the
      Reinsurer the Reinsurer's portion of the decrease, if any, in the
      principal balance on any outstanding policy loans on the Policies.  The
      Reinsurer shall pay to the Company the Reinsurer's portion of the
      increase, if any, in the principal balance on any outstanding policy
      loans on the Policies.

                                        5
<PAGE>

            Section 3.3.  Premiums.  The Reinsurer and the Company shall be
      entitled to share all premiums collected on the Policies in proportion to
      the Coinsurance Ratio established by this Agreement as of and following
      the Effective Date of this Agreement.  The Reinsurer, in its capacity as
      administrator of the Policies as herein provided, shall receive and
      administer premiums remitted to the Company, and shall account for any
      and all such collected premiums as of the end of each calendar month to
      the Company as part of the Monthly Cash Settlement as set forth below. 
      The Company shall not change the premium rates with respect to business
      subject to this Agreement and issued subsequent to May 31, 1996, without
      the express written consent of the Reinsurer.

            Section 3.4.  Commission Allowance.  Subject to the limitations
      expressed in the immediately succeeding sentence, with respect to
      Policies issued on or before May 31, 1996, the Reinsurer shall reimburse
      the Company as a part of the Monthly Cash Settlement the Reinsurer's
      Portion of the actual Commissions earned on the Policies by the Company's
      agents based on the commission schedules in force as of the Effective
      Date of this Agreement.  Such commissions shall not  exceed, however, the
      amount or amounts, as the case may be, shown in the December 31 Actuarial
      Appraisal in respect to the Transferred Policies ("Commissions").  World
      Service agrees to indemnify and hold Reinsurer harmless from any
      liability, loss, or expense from claims of agents or brokers for
      commissions, service fees, or producer compensation in excess of said
      Commissions.  With respect to Policies issued subsequent to May 31, 1996,
      the Reinsurer shall pay (i.e., allow) the Company as a part of the
      Monthly Cash Settlement the Reinsurer's Portion of the Commissions
      calculated in accordance with Exhibit 3.4 attached hereto.  There shall
      be no increases to any of the commission schedules referred to herein
      without the express written consent of the Reinsurer.

            Section 3.5.  Premium Assessment Reimbursement.  The Reinsurer
      shall pay to the Company as a part of the Monthly Cash Settlement the
      Reinsurer's Portion of any and all assessments based upon and measured by
      the amount of premium income attributable to the Policies, including
      premium taxes, paid by the Company on account of such Policies by any
      state, county, parish, or municipal authority.

            Section 3.6.  Income Tax Reimbursement.  The Company and the
      Reinsurer agree to remain liable for their respective Federal Income Tax
      liabilities, including any "DAC" taxable income that may be incurred by
      the reinsurance of the Policies by the Reinsurer.
      
            Section 3.7.  Payment of Benefits.  Except as otherwise provided
      in this Agreement, the Reinsurer, as administrator governed by the
      provisions of Exhibit 3.1, shall service and pay, on behalf of the
      Company, all claims and other Policy benefits (with the exception of
      policyholder dividends, which shall be governed as set forth in Section
      3.8 below) falling within the scope of the Reinsured Policy Obligations
      directly to the policyholders or other designated beneficiaries of the
      Policies in the ordinary course of business in accordance with the terms
      and conditions of such Policies, other documentation and applicable law. 
      In the event of any claim that, in the Reinsurer's sole discretion, falls
      outside of the terms and conditions of such Policies, or exceeds the
      benefits provided by such Policies, the Reinsurer shall seek instructions
      from the Company and shall respond to and pay or refuse to pay, as the

                                          6
   <PAGE>
      case may be, such claim in compliance with such instructions, in which
      case the Reinsurer's liability in respect to such claim shall be limited
      to its share of the Policy liability that falls within the limits of the
      Policy and its terms and conditions. The failure on the part of the
      Company to issue instructions, or a delay by the Company in issuing
      instructions which are requested, shall be deemed to be instructions to
      refuse to pay such claim unless and until the receipt by the Reinsurer of
      instructions to the contrary.  Instructions shall be deemed not to be
      issued unless and until the same are received by the Reinsurer in
      writing.  The Reinsurer shall maintain records of the servicing of claims
      such that the Company will be able to conduct an audit of such servicing
      as herein provided.

            Section 3.8.  Liability and Payment.  Except as provided in
      Section 3.7 of this Agreement, the Company will accept the decision of
      the Reinsurer on payment of a claim or other benefit on a Policy
      reinsured hereunder.  The Reinsurer and the Company shall share monthly
      the cost of the claims and other benefits on the Policies as herein set
      forth.

            Section 3.9.  Dividends to Policyholders.  The Company shall have
      sole discretion and control regarding the declaration and payment of
      dividends to the holders of the Policies during any and all calendar
      months for which this Agreement is in effect.  If the amount of such
      dividends exceeds the amount needed to provide for a 1% increase in the
      original face amount of participating Policies, the Company shall be
      solely responsible for funding the payment of the portion of such
      dividends that is in excess of 1%; otherwise, dividends paid in respect
      to the Policies shall be shared, based on the Coinsurance Ratio, by the
      Reinsurer and the Company as set forth herein.  The Reinsurer shall not
      be liable in respect to any claim against the Reinsurer relating to the
      declaration or payment of any dividend, or the failure to declare or pay
      any dividend, and the Company shall indemnify and hold the Reinsurer
      harmless in respect to any such claim.

            Section 3.10.  Contested Claims.  In the event of a decision by
      the Company to contest, compromise, or litigate a claim involving a
      Policy pursuant to Section 3.7 or Section 3.8 of this Agreement, the
      Reinsurer and the Company will share, based on the Coinsurance Ratio, the
      costs of the contest in addition to the amount of the claim itself, or
      the Reinsurer may choose not to participate.  However, if the Reinsurer
      chooses not to participate, it will discharge its liability by agreeing
      to pay to the Company the full amount of the Reinsurer's liability on the
      subject Policy, in which case all aspects (including costs, assessments,
      judgments, etc.) of the contest, compromise and/or litigation shall be
      the sole responsibility of the Company.  The Reinsurer, at its election
      and expense, shall have the right to be present and/or represented in any
      related proceedings.

                                      Article IV
                          Transfer of Assets and Ceding Fee

            Section 4.1.  Transfer of Assets.  At the time of Closing, the
      Company transferred to Reinsurer an amount of assets equal to the
      Reserves and other policy liabilities attributable to the Policies
      determined from the policy data maintained by the Company as of December
      31, 1995, less a "Ceding Fee," pursuant to the Assumption Agreement

                                          7
<PAGE>
      subject to a recalculation of the assets, liabilities and the Ceding Fee
      based on the policy data maintained by the Company as of May 31, 1996, as
      contemplated by the Assumption Agreement.  In connection with such
      recalculation, the parties agreed to change the transaction from 100%
      assumption reinsurance (as the Assumption Agreement contemplated) to a
      partial coinsurance, which agreement was documented in the Reinsurance
      Agreement.  The Reinsurance Agreement resolved also the projected re-
      evaluation of the Policies in 1998, and also the matter of any need to
      make adjustments for the IBNR reserves.  This Coinsurance Agreement is a
      restatement of the agreement set forth in the Assumption Agreement as
      modified by the Reinsurance Agreement.  The calculation of assets for
      purposes of transfer pursuant to the Assumption Agreement were adjusted
      pursuant to the Reinsurance Agreement and such adjustments are set forth
      in Exhibit 4.1 attached hereto, and said adjustments are hereby accepted
      and agreed to by the parties in complete and final settlement of all
      matters to be adjusted as contemplated by the Assumption Agreement.

            Section 4.2.  Ceding Fee.  In the manner described in Section 4.1,
      the Ceding Fee was determined by an Actuarial Valuation using policy data
      maintained by the Company as of December 31, 1995, and was subsequently
      updated in a May 31 Actuarial Appraisal using policy data maintained by
      the Company as of May 31, 1996, and changes agreed upon by the parties,
      as contemplated by the Assumption Agreement.  The Reinsurance Agreement
      resolved all matters contemplated by the Assumption Agreement, the
      results of which are set forth in said Exhibit 4.1.  Said Exhibit 4.1 has
      three versions: (a) the aforementioned adjustments affecting the
      Company's Policies only, (b) the aforementioned adjustments affecting
      South Texas Bankers Policies only (in respect to which, see Section 14.4
      below) and (c) the aforementioned adjustments consolidating the
      adjustments affecting the Company's and South Texas Bankers Policies (in
      respect to which, see Section 14.4 below).  The Ceding Fee adjustment is
      set forth in Exhibit 4.1.
      
                                      ARTICLE V
                              ACCOUNTING AND SETTLEMENT

            Section 5.1.  Agreement Accounting Period.  The accounting period
      for this Agreement shall be on a calendar month basis unless otherwise
      specified herein.  The first report was for the period beginning June 1,
      1996, through August 31, 1996 and has been submitted by the Reinsurer to
      the Company and settled.

            Section 5.2.  Monthly Report.  Within fifteen (15) working days
      after the end of each calendar month following the period identified in
      Section 5.1, the Reinsurer will submit to the Company a Monthly Cash
      Settlement (as defined in Section 5.3 below) report which shall contain
      the amount of premiums, commissions, administration expense allowances,
      benefits, dividends to policyholders, reserves, outstanding policy loans
      and interest incurred thereon, due and unpaid premiums, due and deferred
      premiums, any and all claim reserves as calculated in accordance with
      NAIC Convention Blank Exhibit 11, and number of Policies and in force for
      such calendar month.

            Section 5.3.  Monthly Cash Settlements.  Within five (5) working
      days after the receipt of each Monthly Cash Settlement report as
      specified in Sections 5.1 and 5.2, the Company shall pay to the Reinsurer
      the Reinsurer's Portion (for such accounting period) of:
      
                                          8
<PAGE>
      (a)   the net amount of premiums as defined in Section 3.3; and
      (b)   the interest on outstanding policy loans as defined in Section
            3.2; and

      (c)   the decrease, if any, in outstanding policy loans as defined in
            Section 3.2.

      Simultaneously, the Company shall pay to the Reinsurer the Company's
      Portion of the administration fees as defined in Section 3.1. 
      Simultaneously, the Reinsurer shall pay to the Company the Reinsurer's

      Portion of:

      (d)   the commission allowances as defined in Section 3.4; and

      (e)   the Policy benefit payments as defined in Section 3.7; and

      (f)   the dividends to policyholders as defined in Section 3.8; and

      (g)   the increase, if any, in outstanding policy loans as defined in
            Section 3.2; and

      (h)   the premium assessment reimbursement as defined in Section 3.5.

      The settlement as above described is sometimes referred to in this
      Agreement as the "Monthly Cash Settlement."
      
            Section 5.4.  Amounts Due Monthly.  Except as otherwise
      specifically provided in this Agreement, all amounts due to be paid to
      either the Company or the Reinsurer under this Agreement on a monthly
      basis shall be determined on a net basis as of the last day of each
      calendar month and shall be due and payable as of such date.  If the
      amounts, as defined in Section 5.3 above, cannot be determined at such
      dates as defined herein on an exact basis, such payments will be paid in
      accordance with an approximate amount determined by the Reinsurer, which
      amount shall be adjusted to the actual amount determined as soon as
      practicable thereafter.

            Section 5.5.  Delayed Payments.   For purposes of Section 5.4
      above, if there is a delayed settlement of a payment due, interest will
      be added, in an amount calculated as:  the amount of the payment which is
      delinquent, multiplied by ten percent (10%), multiplied by the number of
      days such amount has been delinquent, regardless of holidays or weekends,
      and divided by the whole number 365.  For purposes of this paragraph, a
      payment shall be deemed to be delinquent after five (5) working days from
      the date such payment is due.  For purposes of this Agreement, the number
      of days a payment is delinquent shall commence on the day following the
      date such payment is due, as defined above, and shall end on the date
      such payment is received by the party entitled to receipt.
      
            Section 5.6.  Offset of Payments.  All monies due either to the
      Company or to the Reinsurer under this Agreement shall be offset against
      each other, dollar for dollar, regardless of any insolvency of either
      party.




                                          9
<PAGE>
                                       Article VI

                                   MUTUAL COVENANTS

            Section 6.1.  Covenants.  The Reinsurer and the Company agree as
      follows:

      (a)   to indemnify, defend and hold harmless the other, its directors,
            officers, employees and agents from any and all claims, actions,
            suits, judgments, damages (including punitive or exemplary
            damages), fines and other proceedings, whether civil, criminal
            (only to the extent permitted by law or public policy),
            administrative, investigative or otherwise, together with all
            costs, expenses and other amounts, including attorney's fees,
            arising out of any failure to performance its duties, obligations
            or responsibilities to the other party, its directors, officers,
            employees and agents, under this Agreement; and
      
      (b)   the Reinsurer shall have no obligation arising out of any breach
            of any duty on the part of the Company to any holder, insured,
            assignee, beneficiary or other claimant under any Policy.  Except
            for any liability on the part of the Reinsurer to the Company
            resulting solely from any negligence on the part of the Reinsurer
            as administrator, the Company shall remain solely liable for all
            fines, penalties or other assessments imposed against the Company
            by any Insurance Department or other governmental entity for any
            conduct of the Company, its employees or authorized
            representatives, which was not expressly authorized, in writing,
            by the Reinsurer; and

      (c)   any and all materials, information, proposals, studies or other
            documents relative to this Agreement are confidential and
            proprietary.  Neither party shall disclose, directly or
            indirectly, any information obtained from the other party,
            relative to this Agreement, to any third party without the express
            written consent of the other unless applicable statute, law or
            regulation requires such disclosure.

            Section 6.2.  Policy Conservation.  The Company warrants that it
      will take no action that would encourage the holders of the Policies to
      surrender, reduce or otherwise terminate their existing coverages either
      through direct or indirect acts, including but not limited to, a plan of
      internal replacement.

            Section 6.3.  Fees Payable.  Each of the parties hereto represents
      that no commission, fee or compensation is due to any third person by
      virtue of having negotiated or arranged the transactions herein, except
      that Reinsurer shall be solely responsible for the payment of a finder's
      fee to Trent & Associates of Oklahoma City, Oklahoma.  Each of the
      parties agrees to pay all costs incurred by it for actuarial, legal and
      other services received or utilized in connection herewith.

                                     ARTICLE VII
                                     ARBITRATION
            
            Section 7.1.  Agreement.  Except for matters relating to recapture
      and transfer as set forth in Section 2.5 and Section 2.6, respectively,

                                          10
<PAGE>
      all disputes and differences between the Company and the Reinsurer on
      which an agreement cannot be reached will be decided by arbitration,
      regardless of the insolvency of either party, unless the conservator,
      receiver, liquidator, or statutory successor is specifically exempted
      from an arbitration proceeding by applicable state law.  Such arbitration
      shall be conducted in accordance with Exhibit 7.1 attached hereto and
      made a part hereof.
      
                                     ARTICLE VIII

                                      INSOLVENCY

            Section 8.1.  Agreement.  In the event of the Company's
      insolvency, the Reinsurer's contractual liability on the Policies shall
      continue to be determined by all the terms, conditions and limitations
      under this Agreement, but the Reinsurer will make settlement (1) directly
      to the Company's liquidator, receiver or statutory successor, and (2)
      without increase or diminution because of the Company's insolvency.  The
      liquidator, receiver or statutory successor of the Company shall give the
      Reinsurer written notice of the pendency of a claim against the Company
      on any Policy within a reasonable time after such claim is filed in the
      insolvency proceeding.  During the pendency of any such claim, the
      Reinsurer may investigate such claim and interpose in the Company's name
      (or in the name of the Company's liquidator, receiver or statutory
      successor), in the proceeding where such claim is to be adjudicated, any
      Defense or Defenses which the Reinsurer may deem available to the Company
      or its liquidator, receiver or statutory successor.  The expense thus
      incurred by the Reinsurer shall be chargeable, subject to court approval,
      against the Company as a part of the expense of liquidation to the extent
      of a proportionate share of the benefit which may accrue to the Company
      solely as a result of the defense undertaken by the Reinsurer.
      
                                      Article IX

                                     Termination

            Section 9.1.  Termination With Respect to New Business.  This
      Agreement may be terminated with regard to new business only as follows:

      (a)   By the Company, on any date following the first twelve (12) months
            upon written notice by the Company to the Reinsurer as herein
            provided following the expiration of ninety (90) days from the
            date on which such notice is given; or
      
      (b)   By the Reinsurer, upon written notice by the Reinsurer to the
            Company as herein provided following the expiration of ninety (90)
            days from the date on which such notice is given; or
      
      (c)   By either party, upon advance written notice to the other party as
            herein provided, for "cause" as herein defined, provided such
            notice sets forth with reasonable detail the specific facts and
            nature of the "cause" (or "causes" as the case may be) on which
            the terminating party is relying in exercising its right of
            termination under this subparagraph.  "Cause" means a material
            breach of this Agreement by a party which has the effect of
            materially jeopardizing the interest of the other party or
            materially burdening the ability of the other party to perform its
            
                                       11
<PAGE>
            responsibilities under this Agreement, or the occurrence of an
            event or set of facts that renders a party incapable of performing
            its responsibilities under this Agreement.
      
      (d)   Notwithstanding anything to the contrary herein contained, in
            respect to applications submitted by an agent of the Company
            subsequent to May 31, 1996, the Reinsurer, by giving written
            notice to the Company, may refuse to reinsure policies, beginning
            after such notice is given, issued on such applications by such
            agent if the Reinsurer in its sole discretion decides that the
            applications submitted by such agent are materially below the
            quality of the applications generally being received from other
            agents, or that such agent's applications materially fall below
            the Reinsurer's underwriting standards, or that such agent has a
            history or record of performance or conduct that would be
            unacceptable when measured by relevant industry standards.
            
                                      Article X
                   Representations and Warranties of World Service
            
            World Service hereby represents and warrants to Reinsurer that:

            Section 10.1.  Organization and Existence.  World Service is an
      Alabama-domiciled stock insurance company duly incorporated, validly
      existing, and in good standing under the corporation and insurance laws
      of the State of Alabama.  World Service has all requisite corporate power
      and authority to carry on its business as it is now being conducted, and
      to own, lease, and operate its properties.

            Section 10.2.  Qualification and Power.  World Service is duly
      qualified and in good standing to do business in every jurisdiction in
      which such qualification is necessary because of the nature of its
      business or of the properties owned, leased, or operated by it.

            Section 10.3.  Validity: No Violation.  This Agreement is a valid
      and binding obligation of World Service, enforceable against it in
      accordance with its terms and conditions.  Neither the execution and
      delivery of this Agreement, nor World Service's compliance with any of
      the provisions of this Agreement, will:
      
      (a)   conflict with or result in a breach of any provision of the
            Articles of Incorporation or Bylaws of World Service, or result in
            a default (or give rise to any right of termination, cancellation,
            or acceleration) under any of the terms, conditions, or provisions
            of any note, lien, bond, mortgage, indenture, license, lease,
            agreement, consent order, or other instrument or obligation to
            which World Service is a party or by which it may be bound;
     
      (b)   violate any judgment, order, writ, injunction, or decree of any
            court, administrative agency, or governmental body applicable to
            World Service or to any of its properties or assets; or

      (c)   cause, or give any person grounds to cause (with or without
            notice, the passage of time or both), the maturity of any
            liability of World Service to be accelerated or increased.
            


                                      12      
<PAGE>                                      
            Section 10.4.  No authorization, consent or approval of, or filing
      with, any public body or authority is necessary for World Service to
      obtain for the consummation of this Agreement, except that such
      transaction requires the approvals, authorizations and clearances
      contemplated by Section 12.1(b) hereof. No authorization, consent or
      approval of any other person or entity is necessary for World Service to
      obtain for the consummation of the transactions contemplated by this
      Agreement, and no person or entity has an option, right of first refusal
      or preferential right to purchase all or any part of the Policies or that
      is otherwise triggered as a result of the transactions contemplated
      hereby.

            Section 10.5.  The reserves with respect to each of the Policies
      included in the Policies for the period ended May 31, 1996 and
      established on the books of World Service (i) were calculated and
      determined in accordance with generally accepted actuarial and statutory
      accounting standards consistently applied, (ii) are based on actuarial
      assumptions that are in accordance with those specified in the related
      Policies  and (iii) meet the requirements of the insurance laws of the
      State of Texas.  The reserves for the period ended May 31, 1996 and
      established on the books of World Service with respect to the incurred
      but unreported policy claims are referred to herein as the "IBNR Claims
      Reserves."  The reserves as set forth in this Section 10.5 shall be
      referred to in this Agreement as "Reserves."

            Section 10.6. Since December 31, 1995, there has not been any
      material adverse change, or changes in the Policies or operations of
      World Service taken as a whole which in the aggregate may be deemed
      materially adverse or which could affect the validity or enforceability
      of this Agreement, consummation of the transactions contemplated hereby
      or compliance with the terms hereof by World Service.

            Section 10.7. World Service has the right to use, free and clear
      of any royalty or other payment obligations, claims of infringement or
      alleged infringement or other lien or encumbrance, all systems software
      included in or used to process the Policies and no third party will be
      entitled to any payment or other benefit as a result of the transfer the
      data processing system by World Service to Reinsurer in accordance with
      this Agreement.
             
            Section 10.8.  There are no claims, actions, suits, investigations
      and administrative, arbitration or other proceedings (i) pending against
      World Service with respect to the Policies or (ii) threatened against
      World Service with respect to the Policies.  World Service is not subject
      to or in default with respect to any order, writ, judgment, decree,
      injunction or similar order of any court or any foreign, federal, state
      or other governmental body.  There are no claims, actions, suits,
      investigations or administrative, arbitration or other proceedings
      pending or threatened against or affecting World Service which
      individually or in the aggregate could have a material adverse effect on
      the Polices which could affect the validity or enforceability of this
      Agreement, consummation by World Service of the transactions contemplated
      hereby or compliance by World Service with the terms of this Agreement,
      and (ii) World Service is not subject to or in default with respect to
      any order, writ, judgment, decree, injunction or similar order of any
      court or any foreign, federal, state or other governmental body, the
      result of which being subject to or of which default individually or in
                                     
                                     13
<PAGE>                               
      the aggregate could have a material adverse effect on the Polices or
      which could affect the validity or enforceability of this Agreement,
      consummation by World Service of the transactions contemplated hereby or
      compliance by World Service with the terms of this Agreement.

            Section 10.9.  World Service is in compliance in all respects with
      all laws, ordinances, regulations, orders, judgments, injunctions, or
      decrees of any court, arbitrator or governmental authority where the
      failure to comply, individually or in the aggregate, could reasonably be
      expected to have a material adverse effect on the Policies.

            Section 10.10.  The Actuarial Appraisal referred to in Section 4.1
      includes all commissions which are payable to agents of World Service. 
      World Service is not in default under any of the terms, provisions or
      conditions of any contract between World Service and any of its agents,
      past or present.  The failure of any agent who wrote business for World
      Service to have been duly licensed (for the type of business which such
      agent wrote) as an agent in the particular jurisdiction in which such
      agent wrote for World Service will not individually or in the aggregate
      have a material adverse effect on the Policies of World Service.  To the
      knowledge of World Service, there is no actual or threatened plan on the
      part of any insurance agent or broker to rewrite any of the policies or
      contracts of insurance included in the Policies.
      
            Section 10.11.
      
      (a)   It has been the practice of World Service to send all
            communications involving policyholders directly to the affected
            policyholders, and the Documents and Records of World Service to
            be delivered to Reinsurer contain adequate information to enable
            Reinsurer as administrator to send written notifications or other
            communications directly to each policyholder whose policy or
            contract is included in the Policies;
            
      (b)   no master list of all or any substantial number of the holders of
            the Policies has been provided by World Service to any third party
            except to World Service's consulting actuary, and such master list
            is not available in the public domain; and 
            
      (c)   no policyholder or group of policyholders, which individually or
            in the aggregate account for five percent or more of the premium
            income included in the Policies has threatened to terminate its or
            their relationship with World Service.

            Section 10.12.  With respect to each of the Policies:
            
      (a)   World Service is a party to each of such and owns all of the
            rights and interests of an insuring, reinsuring or ceding party,
            as the case may be, in and to each of such Policies, free and
            clear of any Lien; 

      (b)   each of such Policies is in full force and effect and constitutes
            a valid and legally binding obligation of each of the parties
            thereto in accordance with its terms; the transactions
            contemplated by this Agreement will not affect the validity or
            binding character of any such Policy; World Service is not in
            

                                       14    
<PAGE>                                       
            violation, breach or default of any such Policy and no event has
            occurred which (with or without notice or lapse of time or both)
            constitutes a breach or default by World Service under any such
            Policy and no such Policy contains any provision providing that
            the other party thereto may terminate the same by reason of the
            transactions contemplated by this Agreement or any other provision
            which would be altered or otherwise become applicable by reason of
            such transactions;

      (c)   such Policies are, to the extent required under applicable law, on
            forms approved by the insurance regulatory authority of the
            jurisdiction where issued or have been filed with and not objected
            to by such authority within the period provided for objection;

      (d)   all current benefits payable by World Service under any such
            Policy have been paid or will be paid in the ordinary course of
            business under the terms of the Policies under which they arose or
            to the satisfaction of the parties thereto;

      (e)   no such Policy entitles the holder thereof or any other person or
            entity to receive dividends or similar benefits in which the right
            to receive such dividends or benefits is determined other than at
            the discretion of the board of directors of World Service;

      (f)   the underwriting standards utilized and ratings applied by World
            Service with respect to Policies issued by World Service conform
            in all material respects to customary insurance industry practices
            as such practices apply to the markets in which World Service has
            sold its policies and, with respect to any such Policy reinsured
            in whole or in part, conform in all material respects to the
            standards and ratings required pursuant to the terms of the
            related reinsurance, coinsurance or other similar Policy;

      (g)   each of such Policy was issued and has been serviced in the
            ordinary course of business; and

      (h)   there has been no discrimination in violation of applicable
            insurance laws among the policyholders whose policies and
            contracts of insurance are included in such Policies with respect
            to the rates charged such policyholders for the insurance in force
            afforded such policyholders by such Policies.

            Section 10.13.  The Documents and Records are accurate and
      complete in all material respects and there are no deficiencies in the
      Documents and Records which could reasonably be expected to have a
      material adverse effect on either Reinsurer's satisfaction of its
      obligations in respect of the Policies or the servicing by Reinsurer of
      the Policies in accordance with customary insurance industry practices. 
      There are no facts or other circumstances that would prevent the
      Reinsurer (or which raises a material probability that the Reinsurer
      might be prevented) from servicing the Policies in accordance with
      customary insurance industry practice and in the manner in which the
      Policies have been serviced prior to the Effective Date.

             Section 10.14.   As of the Effective Date, neither this Agreement
      nor any certificate or document furnished by World Service to Reinsurer
      in connection with this Agreement or the transactions contemplated hereby

      
                                     15
<PAGE>
      contains any untrue statement of material fact or omits to state a
      material fact necessary to make the statements herein or therein not
      misleading in light of the circumstances in which they were made.

            Section 10.15.  Survival of Representations and Warranties.  The
      representations and warranties of World Service contained in this Article
      X and elsewhere in this Agreement shall survive the Closing until all of
      the liabilities reinsured hereunder have been discharged or otherwise
      expire.

                                    Article XI
                     Representations and Warranties of Reinsurer

       Reinsurer hereby represents and warrants to World Service that:
      
            Section 11.1.  Organization and Existence.  Reinsurer is a Texas-
      domiciled stock insurance company duly incorporated, validly existing,
      and in good standing under the corporation and insurance laws of the
      State of Texas.  Reinsurer has all requisite corporate power and
      authority to carry on its business as it is now being conducted, and to
      own, lease, and operate its properties.

            Section 11.2.  Qualification and Power.  Reinsurer is duly
      qualified and in good standing to do business in every jurisdiction in
      which such qualification is necessary because of the nature of its
      business or of the properties owned, leased, or operated by it.

            Section 11.3.  Validity; No Violation.  This Agreement is a valid
      and binding obligation of Reinsurer, enforceable against it in accordance
      with its terms and conditions.  Neither the execution and delivery of
      this Agreement, nor Reinsurer's compliance with any of the provisions of
      this Agreement, will:

      (a)   conflict with or result in a breach of any provision of the
            Articles of Incorporation or Bylaws of Reinsurer, or result in a
            default (or give rise to any right of termination, cancellation,
            or acceleration) under any of the terms, conditions, or provisions
            of any note, lien, bond, mortgage, indenture, license, lease,
            agreement, consent order, or other instrument or obligation to
            which Reinsurer is a party or by which it may be bound;
            
      (b)   violate any judgment, order, writ, injunction, or decree of any
            court, administrative agency, or governmental body applicable to
            Reinsurer or to any of its properties or assets; or

      (c)   cause, or give any person grounds to cause (with or without
            notice, the passage of time or both), the maturity of any
            liability of Reinsurer to be accelerated or increased.

            Section 11.4.  Survival of Representations and Warranties.  The
      representations and warranties of Reinsurer contained in this Article XI
      and elsewhere in this Agreement shall survive the Closing until all of
      the liabilities reinsured and assumed hereunder have been discharged or
      otherwise expired.
      



                                       16
<PAGE>
                                     Article XII
                    Covenants and Conditions Precedent to Closing
      
            Section 12.1.  The obligations of each of the parties hereto to
      proceed with the Closing were subject to the fulfillment (unless waived
      by each party in writing), prior to or at the Closing, of each of the
      following conditions:

      (a)   No suit, action or other proceeding shall have been initiated and
            be pending or be threatened by any governmental agency in which it
            is sought to restrain, prohibit, invalidate, modify or condition,
            or set aside, the transactions contemplated by this Agreement, and
            no statute, rule or regulation having such effect shall have been
            promulgated or enacted, nor shall any such suit, action or
            proceeding have been initiated by any other third party not
            affiliated with the parties hereto in which such third party shall
            have obtained preliminary or permanent injunctive relief or which,
            in the opinion of counsel to either party, has a reasonable
            likelihood of success; provided, however, that each party shall
            use reasonable efforts in good faith to cause such suit, action or
            proceeding, or the threat thereof, to be dismissed or withdrawn,
            to cause such injunction to be dissolved or vacated or to cause
            such statute, rule or regulation to be repealed or rescinded.

      (b)   The receipt of the required approval of this Agreement from
            regulatory authorities.

            Section 12.2.  The obligations of World Service to proceed with
      the Closing were subject to the fulfillment (unless waived by Reinsurer
      in writing), prior to or at the Closing, of each of the following
      conditions:

      (a)   The representations and warranties of Reinsurer contained in
            Article XII of this Agreement shall be true and correct in all
            material respects at and as of the Closing, as if each such
            representation and warranty had been made as of the Closing.


                                    17
<PAGE>
      (b)   Reinsurer shall have performed and complied in all material
            respects with all covenants, agreements, obligations, commitments
            and conditions required by this Agreement to be performed or
            complied with prior to or at the Closing.

      (c)   Reinsurer shall have delivered to World Service a certificate
            dated the Closing Date and signed by the president or a vice
            president of Reinsurer certifying to the fulfillment of the
            conditions specified in this Section 12.2.

      (d)   Reinsurer shall have delivered to World Service at the Closing
            such other documents as World Service may reasonably request.

            Section 12.3.  The obligations of Reinsurer to proceed with the
      Closing are subject to the fulfillment (unless waived by Reinsurer in
      writing), prior to or at the Closing, of each of the following
      conditions:

      (a)   The representations and warranties of World Service contained in
            Article XII of this Agreement shall be true and correct in all
            material respects at and as of the Closing, as if each such
            representation and warranty had been made as of the Closing.

      (b)   World Service shall have performed and complied in all material
            respects with all covenants, agreements, obligations, commitments
            and conditions required by this Agreement to be performed or
            complied with prior to or at the Closing.

      (c)   World Service shall have delivered to Reinsurer a certificate
            dated the Closing Date and signed by the president or a vice
            president of World Service certifying to the fulfillment of the
            conditions specified in this Section 12.3.

      (d)   World Service shall have delivered to Reinsurer at the Closing
            such other documents as Reinsurer may reasonably request.



                                       18
<PAGE>
           Section 12.4.  Documents and Records.  World Service gave
      Reinsurer access to records and information concerning the Policies prior
      to the Closing and in connection with the transfer of the administration
      of the Policies to Reinsurer.  World Service agrees to deliver to
      Reinsurer all of World Service's files, books, and records to the extent
      not already delivered to Reinsurer, relating to the Policies ("Documents
      and Records") without charge.  World Service transferred, delivered,
      assigned and conveyed to Reinsurer on the Closing Date all of its data
      processing equipment, hardware and related implements, as well as all
      related operating and processing software, within World Service's
      possession or control ("data processing system"), used for the purpose of
      administration and servicing of the Policies without charge.  In
      connection with such data processing system, World Service does hereby
      assign and transfer to Reinsurer without charge all of its rights, title
      and interests in any service contracts, licenses, permits or agreements
      used or useful in operating or supporting the data processing system. 

           Section 12.5.  Cooperation.  The parties shall assist and
      cooperate with each other by making all reasonable efforts to seek and
      obtain the aforementioned approvals and any other approvals the parties
      agree are necessary or advisable, and each party shall bear its own
      expenses related thereto.
      
                                     Article XIII
                                       Closing
      
            Section 13.1.  Time and Location.  The closing of the transactions
      contemplated by this Agreement ("Closing") took place on May 31, 1996
      (the "Closing Date"), subject to regulatory approval.
           
            Section 13.2.  Deliveries by World Service.  At Closing World
      Service delivered to Reinsurer the following:
           
      (a)   an accounting in contract level detail as to the Policies,
            including a detail listing of the contracts and the payment
            obligations thereunder, which are the subject of this Agreement,
            and which also shall show the Transfer Value owed by World Service
            to Reinsurer pursuant to the calculations provided in Schedule
            4.1, and
            
      (b)   Reinsurer's share of any premiums or other receipts, if any,
            received by World Service in connection with the Policies
            attributable to any premiums or other amounts due or payable on or
            after the Effective Date.

                                   Article XIV
                               Miscellaneous Provisions

            Section 14.1.  Extracontractual Damages.  The Reinsurer does not
      agree to indemnify the Company for, and shall not be liable for, any
      extracontractual damages or liability of any kind whatsoever of the
      Company's.
            
            Section 14.2.  Misunderstandings and Oversights.  If any failure
      to pay amounts due or to perform any other act required by this agreement
      is unintentional and caused by misunderstanding or oversight, the Company
      

                                        19
<PAGE>
      and the Reinsurer will adjust the situation to what it would have been
      had the misunderstanding or oversight not occurred.
      
            Section 14.3.  Facility of Reinsurance.  The Company shall not
      enter into any other reinsurance agreements, including assumption
      reinsurance, that would cover the Policies, without the express written
      approval of the Reinsurer, except that the Company may coinsure the
      Company's Portion of the Policies without the Reinsurer's permission
      provided such coinsurance does not diminish the Company's obligations and
      liabilities under this Agreement.

            Section 14.4.  South Texas Bankers Life Insurance Company.  On or
      soon after the time of the execution and delivery of this Agreement, the
      Company will enter into an agreement with South Texas Bankers to assume
      all of South Texas Bankers insurance policies in force ("South Texas
      Bankers Policies") that were the subject of the South Texas Bankers
      Agreement effective June 1, 1996, with certain amendments thereto,
      between the Reinsurer and South Texas Bankers similar in all material
      respects to the Assumption Agreement as herein above identified between
      Reinsurer and the Company, except that said South Texas Bankers Agreement
      involved the South Texas Bankers Policies.  If the Company assumes the
      South Texas Bankers Policies as aforesaid, the Reinsurer and the Company
      agree that such policies will be merged into the Policies covered by this
      Agreement effective as of the Effective Date, and shall thereafter for
      all purposes become a part of the Polices covered by this Agreement.  In
      that case, the Company agrees that it shall assume and be fully
      responsible for South Texas Bankers' obligations, covenants,
      representations, warranties, liabilities and indemnification agreements
      and all other responsibilities contained in said South Texas Bankers
      Agreement in respect to the South Texas Bankers Policies or otherwise,
      except in any instance in which an explicit modification is stated herein
      and in any instance in which there is a conflict between the express
      terms and conditions of the South Texas Bankers Agreement and this
      Agreement, in which case this Agreement shall supersede the South Texas
      Bankers Agreement.  In that case, and referring to Sections 3.01 and 3.02
      above, the Reinsurer has already received the "Transfer Value," and South
      Texas Bankers has already received the "Ceding Fee" as described in
      Section 4.1 and Section 4.2 of the South Texas Bankers Agreement.  If the
      Company assumes the South Texas Bankers Policies as aforesaid, then the
      provisions of Section 4.1 and Section 4.2 above shall apply to the South
      Texas Bankers Agreement, and the consolidated version of Exhibit 4.2
      shall express the adjustments accepted and agreed to by the Parties as
      called for by Section 4.1 and Section 4.2 of this Agreement.  Further, if
      the Company assumes the South Texas Bankers Policies as aforesaid, then,
      effective as of the Effective Date, the Reinsurer's Portion shall be
      Ninety One and Forty-Two Hundredths percent (91.42%) and the Company's
      Portion shall be Seven and Eight and Fifty-Eight Hundredths percent
      (8.58%), and all accounting and settlement as provided in this Agreement
      shall be adjusted accordingly, retroactively to the Effective Date. 
      Pending such assumption of the South Texas Bankers Policies as aforesaid,
      the Coinsurance Ratio between the Company and the Reinsurer shall be as
      stated in Section 2.1, but upon the consummation of the assumption of the
      South Texas Bankers Policies as aforesaid the Coinsurance Ratio shall be
      for all purposes, effective as of the Effective Date, 91.42/8.58.




                                        20
<PAGE>
            Section 14.5.  Policy Changes.  The Company shall not make any
      changes after the Effective Date of this Agreement in the provisions and
      conditions of the Policies.

            Section 14.6.  Audit.  The Company or the Reinsurer, their
      respective employees or authorized representatives may audit, inspect and
      examine, during regular business hours, at the home office of the Company
      or the Reinsurer, provided that three working days advance notice has
      been given to the other party, any and all books, records, statements,
      correspondence, reports, trust accounts and their related documents or
      other documents that relate to the Policies.  The audited party agrees to
      provide a reasonable work space for such audit, inspection or examination
      and to cooperate fully and to faithfully disclose the existence of and
      produce any and all necessary and reasonable materials requested by such
      auditors, investigators, or examiners.  The expense of the respective
      party's employee(s) or authorized representative(s) engaged in such
      activities shall be borne solely by such party.  The auditing party
      agrees to conduct such audit in a courteous, prompt, professional and
      reasonable manner, and to provide immediate written disclosure to the
      audited party of any discrepancy or variance (when compared to any
      previously reported information) discovered by the auditing party.
      
            Section 14.7.  Integration.  [The provisions of this Section 14.7
      are deleted because they are incorporated in Section 14.24.]

            Section 14.8.  Law and Venue.  This Agreement has been finally
      executed in the State of Texas and is subject to and is to be interpreted
      in accordance with the laws of the State of Texas.  Venue for any action,
      suit or other proceeding shall be exclusively in Harris County Texas. 
      The parties agree to waive any other venue.

            Section 14.9.  Counterparts.  This Agreement may be executed
      simultaneously in any number of counterparts, each of which shall be
      deemed an original, but all of which shall constitute one and the same
      instrument.
      
            Section 14.10.  Severability.  In the event that any provision or
      term of this Agreement shall be held by any court to be illegal or
      unenforceable, all of the other terms and provisions shall remain in full
      force and effect, except if the provision or term held to be illegal or
      unenforceable is also held to be a material part of this Agreement such
      that the party in whose favor the material term or provision was
      stipulated herein would not have entered into this Agreement without such
      term or provision, then the party in whose favor the material term or
      provision was stipulated shall have the right, upon such holding, to
      terminate this Agreement.

            Section 14.11.  Amendments.  This Agreement shall be amended only
      by mutual consent and written agreement executed and delivered by the
      parties.

            Section 14.12.  Schedules and Paragraph Headings.  Schedules
      attached hereto are made a part of this Agreement.  Paragraph headings
      are provided for reference purposes only and are not made a part of this
      Agreement.

            Section 14.13.  Financial Reports.  The Company and the Reinsurer
      
                                      21
<PAGE>
      each agree to furnish the other with their respective NAIC Annual and
      Quarterly Statements, as required by their respective state laws within
      five (5) days after such reports are due to be filed with such respective
      states.

            Section 14.14.  Survival.  The representations, warranties,
      covenants and agreements respectively made by the Company and the
      Reinsurer in this Agreement shall survive the termination or expiration
      of this Agreement.
      
            Section 14.15.  Notices.  Any notices made pursuant to this
      Agreement shall be in writing and shall be deemed to have been duly given
      on the date of delivery if delivered personally (including overnight
      delivery service) or by facsimile transmission to the party to whom
      notice is give, or on the third day after mailing if mailed to the party
      to whom notice is to be given by certified mail, return receipt
      requested, and properly addressed as follows:

                If to the Company:
                
                World Service Life Insurance Company of America
                
                Attn: Mr. Jack G. Heffington,
                Vice Chairman and General Counsel
                300 South Jefferson Street
                Winchester, TN 37398
                FAX:   (615) 962-4926

                If to the Reinsurer:

                American Capitol Insurance Company
                Attn:  Mr. William F. Guest, Chairman
                10555 Richmond Avenue
                Houston, Texas 77042
                FAX: (713) 953-7920

            Any party to this Agreement may change the address to which notice
      is to be delivered under this Section 10.15 by delivering written 
      notice to that effect to the other party in accordance with this 
      Section 14.15. Any document delivered via facsimile transmission shall be
      treated as though it is an original for all purposes.

            Section 14.16.  Subject to Regulatory Approval.  The parties
      acknowledge that the Policies are being administered by the Reinsurer
      based on the transfer of the Policies and related files and data
      processing system and equipment to the Reinsurer pursuant to the
      Assumption Agreement which has not been fully consummated and which will
      be consummated upon the consummation of this Agreement.  In the meantime,
      the parties agree that the Reinsurer's administration of such Policies
      shall be governed in any case by the provisions of Exhibit 3.1. 
      Moreover, the South Texas Bankers Policies, which are not initially
      included as a part of the Policies that are the subject of this Agreement
      but may be subsequently added to such Policies, shall continue to be
      administered by the Reinsurer, and which administration shall be governed
      by the provisions of Exhibit 3.1.  The parties further acknowledge that
      this Agreement may be subject to certain regulatory approvals, as well as
      the approval of Crown Life Insurance Company ("Crown") (an insurance
      
                                     22
<PAGE>
      company that has provided certain reinsurance to the Reinsurer in respect
      to the Policies as of the time when the Assumption Reinsurance Agreement
      was entered), which approval the parties agree to seek diligently and in
      good faith.  However, in the event such approvals are not received, or if
      one or more of such approvals contain conditions that modify this
      Agreement materially and which are unacceptable to either party, then
      this Agreement shall be subject to rescission in which case the parties
      shall be restored to the positions they would have had if this
      transaction had not occurred, recognizing the Reinsurer's entitlement to
      compensation for administering the Policies in the interim pursuant to
      Exhibit 3.1 as aforesaid.

            Section 14.17.  Understanding of Agreement.  The Parties agree
      that the drafting of this Agreement has been a joint effort and no
      special weight or presumption should arise in favor of or against either
      Party based on whether one Party or the other was more responsible for
      the drafting of this Agreement.  Each Party has consulted with its
      accounting, actuarial and legal advisers in respect to the negotiations
      and the drafting of this Agreement and each Party has read and
      understands this Agreement.

            Section 14.18.  Assignment.  No party may assign this Agreement or
      any of its rights, interests, or obligations hereunder without the prior
      written consent of the other party, if the assignment is to an entity
      other than an affiliate of Reinsurer.
      
            Section 14.19.  Broker Fees.  Each party hereby represents and
      warrants that it has not taken any action that would impose on any other
      party hereto liability for payment of any broker, finder, or similar fee
      in connection with the origin, negotiation, execution, or performance of
      this Agreement, except that Reinsurer shall be solely responsible for the
      payment of a finder's fee to Trent & Associates of Oklahoma City,
      Oklahoma.

             Section 14.20.  Cooperation.  The parties agree that they will
      from time to time, upon the request of any other party and without
      further consideration, execute, acknowledge, and deliver in proper form
      any further instruments and take such other action as the other party may
      reasonably require in order to carry out effectively the intent of this
      Agreement.
      
            Section 14.21.  Entire Agreement.  Except as otherwise stated in
      this Section 14.21, this Agreement constitutes the entire understanding
      of the parties pertaining to the subject matter contained in this
      Agreement and supersedes all prior and contemporaneous oral and written
      agreements, representations, and understandings of the parties.  For the
      purpose of interpretation of this Agreement, if any provision is
      ambiguous, inconsistent with or in conflict with another provision of
      this Agreement, or uncertain as to its meaning for any reason, reference
      should be made to the Assumption Agreement as modified by the Reinsurance
      Agreement for the purpose of clarification and/or resolution, which shall
      have priority over any oral or other written statements or agreements
      that would otherwise be available under applicable rules of evidence that
      would be legitimately applied by any court or arbitration panel, as the
      case may be.  Furthermore, reference should be made to the South Texas
      Assumption Reinsurance Agreement for purposes of Section 14.4.
      

                                         23
<PAGE>
             Section 14.22.  Exhibits and Schedules.  All exhibits and
      schedules attached to and referenced in this Agreement are hereby
      incorporated by reference into this Agreement as if they were set forth
      at length in the text of this Agreement.
      
            Section 14.23.  Expenses.  Each party shall pay all of its own
      costs, fees, and expenses incurred or to be incurred in negotiating and
      preparing this Agreement and in closing and carrying out the transactions
      contemplated by this Agreement.

            Section 14.24.  Severability.  If any part of this Agreement is
      contrary to, prohibited by, or deemed invalid under applicable law or
      regulations, that provision shall not apply and shall be omitted to the
      extent so contrary, prohibited, or invalid; but the remainder of this
      Agreement shall not be invalidated and shall be given full force and
      effect insofar as possible.
      
            Section 14.25.  Successors.  This Agreement shall be binding upon
      and inure to the benefit of the parties hereto and their respective
      successors and permitted assigns.
      
            Section 14.26.  Third Party Beneficiaries.  Except as to the
      holders of the Policies, nothing in this Agreement, whether express or
      implied, is intended to confer any rights or remedies under or by reason
      of this Agreement on any persons other than the parties to it and their
      respective successors and permitted assigns.  In addition, nothing in
      this Agreement is intended to relieve or discharge the obligation or
      liability of any third person to any party to this Agreement or give any
      third person any right of subrogation or action against any party to this
      Agreement.

            Section 14.27.  Waiver of Compliance.  The party for whose benefit
      a warranty, representation, covenant, or condition is intended may in
      writing waive any inaccuracies in the warranties and representations
      contained in the Agreement or waive compliance with any of the covenants
      or conditions contained herein and so waive performance of any of the
      obligations of the other party and any defaults under this Agreement.  A

                                       24
<PAGE>
      waiver shall not affect or impair, however, the waiving party's rights
      with respect to any other warranty, representation, or covenant or any
      default hereunder not specifically waived, nor shall any waiver
      constitute a continuing waiver.

            IN WITNESS WHEREOF, the parties have caused their duly authorized
      representatives to execute this Agreement as of the Effective Date.
      
      WORLD SERVICE LIFE INSURANCE COMPANY OF AMERICA

      By: /s/Jack G. Heffington
            Vice-Chairman/General Counsel

      Witness: /s/
                Corporate Officer

      AMERICAN CAPITOL INSURANCE COMPANY

      By: /s/William F. Guest
             Chairman

      Witness:
                Corporate Officer

      


































                                          25
<PAGE>
                                                             Exhibit 4.1
     WORLD SERVICE POLICIES - POST CLOSING ADJUSTMENT

                                                Gross  AC Portion WS Portion
     Calculation of Transfer Value             ------  ---------- ----------

     Transfer Value as of May 31, 1996
     ---------------------------------
     Aggregate reserve for life policies   17,221,732  16,119,541  1,102,191
     Policy and contract claims                93,007      87,055      5,952
     Premiums received in advance              33,174      31,051      2,123
     Dividend liability                       100,501      94,069      6,432
     Commission liability                      11,571      10,830        741
     Unearned investment income-policy loans    1,663       1,557        106
     Remittances and items not allocated            0           0          0
                                          ----------------------------------
                                           17,461,648  16,344,103  1,117,545
                                          ==================================

     Assets to be Transferred As Of May 31, 1996                            
     -------------------------------------------
     Policy assets:
       Policy loans                            93,519     87,534       5,985
       Life insurance premiums deferred 
          and uncollected                     590,862    553,047      37,815
       Accrued investment income-policy 
          loans                                   925        866          59
                                          ----------------------------------
     Policy assets to be transferred          685,306    641,446      43,860
     Cash Portion to be transferred        15,566,008 14,569,784     996,225
     Adjusted Ceding Fee to be retained
        by World Service                    1,210,334  1,132,872      77,461
                                          ----------------------------------
                                           17,461,648 16,344,103   1,117,545
                                          ==================================
     Calculation of Ceding Fee
     Based on May 31 Actuarial Appraisal
                                                                            
     May 31, 1996 Ceding Fee before 
       adjustments                            743,013

     Plus dividend adjustment                 597,321
     Less proportionate share of 
       mortality adjustment                  (130,000)
                                          ----------- 
     Adjusted Ceding Fee                    1,210,334
                                          ===========
<PAGE>
     Calculation of Reinsurance Percentage

     A: Cash Portion as of May 31, 1996                           
         (from above)                      15,566,008  14,569,784

     B: Cash Portion as of December 31, 
         1995 (already transferred)                               
        Mortgage loans                      2,008,336
        Cash                               13,561,933
                                           ----------             
                                           14,570,269 (14,570,269)
                                          ------------------------

     Reinsurance Percentage (B/A)              93.60%
                                           ==========

     Cash to be transferred to (from)                            
       American Capitol                                     (485)
                                                     ============
    <PAGE>
                                                                  Exhibit 4.1

     SOUTH TEXAS BANKERS POLICIES - POST CLOSING ADJUSTMENT


                                                Gross AC Portion STB Portion
     Calculation of Transfer Value             ------ ---------- -----------

     Transfer Value as of May 31, 1996
     ---------------------------------
     Aggregate reserve for life policies    7,736,446  6,736,124   1,000,322
     Policy and contract claims                68,007     59,214       8,793
     Premiums received in advance              75,653     65,871       9,782
     Dividend liability                        46,083     40,124       5,959
     Commission liability                      10,331      8,995       1,336
     Unearned investment income-policy loans        0          0           0
     Remittances and items not allocated      109,527     95,365      14,162
                                           ---------------------------------
                                            8,046,047  7,005,693   1,040,354
                                           =================================

     Assets to be Transferred As Of May 31, 1996
     -------------------------------------------
     Policy assets:
     Policy loans                                 0          0           0
       Life insurance premiums deferred 
          and uncollected                     106,634     92,846      13,788
       Accrued investment income-policy loans       0          0           0
                                           ---------------------------------
     Policy assets to be transferred          106,634     92,846      13,788
     Cash Portion to be transferred         7,821,098  6,809,830   1,011,268
     Adjusted Ceding Fee to be retained
        by World Service                      118,315    103,017      15,298
                                           ---------------------------------
                                            8,046,047  7,005,693   1,040,354
                                           =================================
     Calculation of Ceding Fee

     Based on May 31 Actuarial Appraisal

     May 31, 1996 Ceding Fee before 
       adjustments                            188,315
     Plus dividend adjustment                       0
     Less proportionate share of 
       mortality adjustment                   (70,000)
                                             ---------
     Adjusted Ceding Fee                      118,315
                                             =========
<PAGE>
     Calculation of Reinsurance Percentage           

     A: Cash Portion as of May 31, 1996 
         (from above)                        7,821,098  6,809,830

     B: Cash Portion as of December 31, 
         1995 (already transferred)
         Mortgage loans                              0
         Cash                                6,810,029
                                            ----------
                                             6,810,029 (6,810,029)
                                           ----------------------

     Reinsurance Percentage (B/A)                87.07%
                                           ============  

     Cash to be transferred to (from)
       American Capitol                                     (199)
                                                      ===========

<PAGE>
                                                                    Exhibit 4.1
     WS/STB COMBINED - POST CLOSING ADJUSTMENT


                                                Gross AC Portion  WS Portion
     Calculation of Transfer Value             ------ ---------- -----------

     Transfer Value as of May 31, 1996                 
     ---------------------------------
     Aggregate reserve for life policies   24,958,178 22,816,766   2,141,412
     Policy and contract claims               161,014    147,199      13,815
     Premiums received in advance             108,827     99,490       9,337
     Dividend liability                       146,584    134,007      12,577
     Commission liability                      21,902     20,023       1,879
     Unearned investment income-policy loans    1,663      1,520         143
     Remittances and items not allocated      109,527    100,130       9,397
                                          ----------------------------------
                                           25,507,695 23,319,135   2,188,560
                                          ==================================

     Assets to be Transferred As Of May 31, 1996
     -------------------------------------------
     Policy assets:
       Policy loans                            93,519     85,495       8,024
     Life insurance premiums deferred 
          and uncollected                     697,496    637,651      59,845
       Accrued investment income-policy 
          loans                                   925        846          79
                                           ---------------------------------
     Policy assets to be transferred          791,940    723,992      67,948
     Cash Portion to be transferred        23,387,106 21,380,492   2,006,614
     Adjusted Ceding Fee to be retained
        by World Service                    1,328,649  1,214,651     113,998
                                          ----------------------------------
                                           25,507,695 23,319,135   2,188,560
                                          ==================================
     Calculation of Ceding Fee
     Based on May 31 Actuarial Appraisal

     May 31, 1996 Ceding Fee before 
       adjustments                            931,328
     Plus dividend adjustment                 597,321
     Less proportionate share of 
       mortality adjustment                  (200,000)
                                            ---------
     Adjusted Ceding Fee                    1,328,649
                                            =========
<PAGE>
     Calculation of Reinsurance Percentage

     A: Cash Portion as of May 31, 1996 
         (from above)                      23,387,106 21,380,492
                                           ----------
     B: Cash Portion as of December 31, 
         1995 (already transferred)
         Mortgage loans                     2,008,336
         Cash                              19,371,962
                                           ---------- 
                                           21,380,298 (21,380,298)
                                          ----------------------

     Reinsurance Percentage (B/A)               91.42%
                                           ===========

     Cash to be transferred to (from)
        American Capitol                                     (194)
                                                      ============




<PAGE>

                                     EXHIBIT 3.1

                      POLICY ADMINISTRATION AND DATA PROCESSING
                                SERVICES AGREEMENT

     American Capitol Insurance Company, hereinafter referred to as
     Administrator, and World Service Life Insurance Company of America,
     hereinafter referred to as Client, agree as follows:

     During the term of this agreement ("Agreement"), Administrator will
     perform for Client in respect to Client's policies the policy 
     administration and data processing services hereinafter designated in this
     Agreement and exhibits attached hereto and made a part hereof for all
     purposes.  The policies that are the subject of this Agreement consist of
     the policies defined as the "Policies" in the Reinsurance Agreement
     ("Reinsurance Agreement") to which this Agreement is attached as an
     exhibit.

     Client shall designate the person or persons to whom Administrator will
     report.  Client will keep Administrator informed of its corporate policy
     or changes in policy to enable Administrator to carry out the subject
     services for Client in an efficient manner.  Client shall appoint one or
     more of Administrator's officers as its attorney-in-fact to act for Client
     in performing routine functions in the course of administering Client's
     policies and performing data processing services as called for by this
     Agreement.  At any time during the term of this Agreement, Administrator
     may enter into a consulting agreement with one or more employees of Client
     to provide consulting services to Administrator regarding the
     administration of the subject policies and the related marketing
     operation, and Administrator shall be solely responsible for fees relating
     thereto.

     Administrator shall safeguard all data and information relating to
     Client's business to the same extent that Administrator safeguards such
     data and information relating to its own business, provided, however, if
     such data or information is available to the general public, is known or
     in the possession of Administrator prior to the date of this Agreement, or
     is known or in the possession of Administrator prior to actual receipt by
     Administrator of such information or data from client or is rightfully
     obtained from third parties, Administrator shall bear no responsibility
     for its disclosure, inadvertently or otherwise.

     Client agrees that all systems, including data processing programs, discs,
     tapes, documentations, manuals, specifications, ideas,  applications,
     routines, formulas, and techniques relating to the subject services
     furnished, owned, licensed or developed by Administrator shall and may be
     used by Administrator during the term of this Agreement and at any time
     thereafter and shall be and remain the sole property of Administrator.  If
     Client furnished Administrator with any system related to its business,
     said system shall remain the sole property of Administrator, and
     Administrator may use such system or any other system to administer the
     subject policies.

     In the event of termination of this Agreement, Administrator may, at its
     option, retain any property or data in its possession that belongs to
     Client until all sums due Administrator pursuant to this Agreement are
                                         
                                         1
<PAGE>
     paid, including such additional charges as may be determined by
     Administrator and Client to be reasonable and necessary to effect an
     orderly termination of the work and services then being performed by
     Administrator and to assure and protect the orderly and timely
     perpetuation of the Client's business as affected by such work and
     services.  Upon termination of this Agreement, Client shall instruct
     Administrator in writing as to the disposition of all such property or
     data within ninety (90) days.

     Administrator shall use due care and diligence in performing the work and
     services to be performed hereunder and agrees that it will correct any
     errors which are caused solely by Administrator, its authorized agents,
     employees, programs, or data processing equipment and machines, and its
     liability for such errors shall be limited to the correction of same
     within a reasonable time as full compensation for any and all damages
     which may result from such error or errors and in any event, the liability
     of Administrator to Client or any other party for any and all losses or
     damages directly or indirectly arising out of this Agreement or the
     performance hereof, shall not exceed the performance of the particular
     task which gives rise to such loss or damages and such amount shall
     constitute an agreed amount of liquidated damages for such losses and
     damages.  The parties recognize the liability that Administrator has in
     respect to the subject policies in its capacity as Reinsurer under the
     Reinsurance Agreement and, except as hereinabove stated, Administrator
     shall not incur any additional liability by virtue of its role and
     responsibilities as Administrator pursuant to this Agreement.

     Client warrants that it is duly authorized to enter into this Agreement
     and that Administrator has in no way caused or induced Client to breach
     any contracted obligation and Client agrees to indemnify and hold harmless
     Administrator from any claim or claims.

     This Agreement and the exhibits attached hereto or made a part hereof
     constitute the entire agreement of the parties on the subject of policy
     administration and data processing services.  Any modifications or
     amendments must be in writing signed by both parties.

     The parties hereto expressly agree that each  will comply with all
     applicable federal, state and local laws, the violation of which may
     adversely affect the performance of this Agreement.

     The charges hereinafter set forth in Exhibit C attached hereto shall be
     billed as a part of the monthly accounting made by Administrator in its
     capacity as Reinsurer as set forth in the Reinsurance Agreement, and shall
     be allocated between the parties thereto (referred to in such Reinsurance
     Agreement as the Reinsurer and Company) as set forth in such Reinsurance
     Agreement.

     Client agrees that in the event of default in any of the covenants or
     agreements contained herein or in payment of the charges provided herein
     and in exhibit or exhibits attached hereto or made a part hereof, that it
     will pay all costs and expenses of enforcement or collection, including
     reasonable attorney's fees, which may arise or accrue.

     This Agreement may not be terminated by either party during the existence
     of the Reinsurance Agreement, and shall automatically terminate when the
     Reinsurance Agreement terminates, unless the parties agree otherwise in
     writing.
                                        2     
<PAGE>                                        
     This Agreement is effective as of June 1, 1996.

     This Agreement shall inure to the benefit of and be binding upon the
     parties hereto, their successors and legal representatives, and shall not
     be assigned by either party without the prior written consent of the other
     party.

     This Agreement shall be construed under the Laws of the State of Texas and
     should any portion be invalid or unenforceable, for any reason, it shall
     not affect the remainder of this Agreement which shall be valid and
     binding.

          IN WITNESS WHEREOF, this Agreement is an Exhibit to the above
     mentioned Reinsurance Agreement.  The parties, by executing and delivering
     said Reinsurance Agreement, intend to adopt this Agreement as though it
     had been separately executed and delivered by the parties.


                                       3
<PAGE>
                                    EXHIBIT A
      
                                    MANAGEMENT
     

     The Client's responsibility shall be:

     1.  To provide from its Board of Directors or an Officer instructions
     regarding its corporate policy, products, growth and general operations of
     the Company and such other instructions as are called for herein.  To
     select one or more officers of the Client to whom the Administrator is to
     report and from whom the Administrator is to receive instructions.  To
     designate and appoint not less than two officers of Administrator to act
     as Client's attorney-in-fact to perform in Client's place and stead the
     routine policy transactions, such as policy issuance and claims payments
     and such other functions as the parties may deem appropriate.

     2. To provide financial interface and receive the financial reports from
     Administrator.

     3.  To provide marketing interface and receive the marketing reports from
     Administrator.

     The Administrator's responsibilities shall be:

     1.  To perform the subject services in keeping with corporate policy of
     the Client as communicated by the Client to Administrator.

     2.  To provide financial information relating to the subject policies
     sufficient to enable Client to complete requirements of the various state
     insurance departments, file premium tax, advertising and miscellaneous
     reporting forms as required by the states.

                                      MARKETING

     The Client's responsibility shall be:

     To select the products, marketing systems, brochures, agents' training and
     instruction, commissions and other agent compensation, and personnel to
     operate the marketing efforts of the Client.  The Client is solely
     responsible for recruiting, training, assisting, monitoring, supervising,
     terminating (if called for) and the market conduct of the Client's agents.

     The Administrator's responsibility shall be:  None.

                                 UNDERWRITING/ISSUE

     The Client's responsibility shall be:

     To set underwriting standards and guidelines as conditions for issuance of
     new policies and reinstatement of policies that are eligible for
     reinstatement.

     The Administrator's responsibility shall be:

     To issue new polices and reinstate policies consistent with underwriting
     standards and guidelines provided by Client.

                         
<PAGE>                                         
                                   CLAIMS SERVICE

     The Client's responsibilities shall be:

     To inform Administrator of its claims-paying policies and guidelines
     respecting routine claims processing.  To issue instructions to
     Administrator in respect to claims that are other than routine or in
     respect to which Administrator requests instructions.  To inform
     Administrator of all notices of claims when notice thereof is not sent
     directly to Administrator.

     The Administrator's responsibility shall be:

     To verify and pay all claims in accordance with Client's policies,
     guidelines and, when applicable, instructions.
                       
                                POLICYHOLDER SERVICE

     The Client's Responsibilities shall be:

     To inform Administrator of its policies and guidelines respecting routine
     policyholder service.  To issue instructions to Administrator in respect
     to policyholder service matters that are other than routine or in respect
     to which Administrator requests instructions.  To inform Administrator of
     all communication received from policyholders when such communication is
     not received directly by Administrator.

     The Administrator's Responsibility shall be:

     To answer and process all inquiries received, including cash surrenders,
     policy loans, reinstatement requests and policy changes, in keeping with
     Client's guidelines.
                       
                                 BILLING/COLLECTION
                       
     The Client's responsibility shall be:  None, except to remit to
     Administrator promptly any premiums or other payments in respect to the
     subject policies received by the Client.

     The Administrator's responsibilities:

     To provide billing notices either through pre-authorized check or direct
     bills for modal premiums when due.  To provide late notices and lapse
     notices in the event mode premiums are not received when due.  To collect
     and deposit in the Client's account all premiums received and reconcile on
     a daily basis premium collections and deposits.  In this regard, the
     Client hereby authorizes the Administrator to establish one or more bank
     accounts in the name of the Client in respect to which the Administrator's
     officers are hereby authorized to sign and transact business in the same
     manner that it operates banking accounts in its own name.  The Client will
     provide in a timely manner appropriate resolutions by its Board of
     Directors and certifications by its officers to facilitate the above. 
                                                                       
                                     
                                     
                                    
     
     
                                     
     <PAGE>
                                     INVESTMENTS 
     
     The Client's responsibility shall be:
     
     The Client as the Company in the Reinsurance Agreement is solely
     responsible for the assets covering its share of policy liabilities as set
     forth in the Reinsurance Agreement and the Client shall be solely
     responsible for the investments relating to such assets, as well as its
     other assets.

     The Administrator's responsibility shall be:

     The Administrator as the Reinsurer in the Reinsurance Agreement is solely
     responsible for the assets covering its share of policy liabilities as set
     forth in the Reinsurance Agreement and the Administrator shall be solely
     responsible for the investments relating to such assets, as well as its
     other assets.
     
                                      ACTUARIAL

     The Client's responsibility shall be:

     To be responsible for its share of the costs of actuarial services
     selected by Administrator as set forth below.  Client shall be solely
     responsible for any actuarial services that it may require for matters not
     related to the subject policies or any actuarial services that are for the
     exclusive benefit of the Client.

     The Administrator's responsibility shall be:

     To select a qualified actuary to perform all actuarial work, reviews and
     certifications required in respect to the subject policies for the benefit
     of the Client and Administrator in their roles as the Company and the
     Reinsurer, respectively, in the Reinsurance Agreement.  The costs thereof
     shall be borne by the Company and the Reinsurer as a part of the monthly
     accounting as provided in the Reinsurance Agreement, except that in any
     instance in which such actuarial services are performed for the exclusive
     benefit of either the Company or the Reinsurer, as the case may be, such
     party shall bear the entire cost of the subject services.
     
               ACCOUNTING, TAXES, REPORTING AND REGULATORY COMPLIANCE

     The Client's responsibility shall be:

     To inform Administrator of the Officer to whom Administrator is to report
     and to inform Administrator of any specific format required to interface
     with Company in respect to accounting procedures, taxes and tax reporting,
     financial reporting and regulatory compliance.  Client shall be solely
     responsible for its accounting functions, taxes and tax reporting,
     financial reporting and regulatory compliance.

     The Administrator's responsibility shall be:

     To provide sufficient policy data and information to Client to enable
     client to record all accounting entries on Client's books to properly
     account for all transactions implemented by Administrator in respect to
     the subject policies.
     

<PAGE>
                                     COMMISSIONS

     The Client's responsibility shall be:

     Subject to the provisions and limitations in the Reinsurance Agreement, to
     make all commission and other compensation arrangements with its agents.

     The Administrator's responsibility shall be:

     To prepare agent commission statements and disburse funds to agents based
     on the results of the commission statements.
     
                                  POLICY DIVIDENDS

     The Client's responsibility shall be:

     To determine and declare all dividends to be paid in respect to the
     subject policies and to instruct Administrator accordingly.

     The Administrator's responsibility shall be:

     To pay or otherwise credit dividends to the subject policies in accordance
     with Client's instructions.  The Administrator shall be entitled to rely
     upon and implement the dividend scales and practices of the Client that
     exist as of the Effective Date of this Agreement and continuing thereafter
     until changed in writing by the Client.  When changed in writing by the
     Client, the Administrator shall implement the change or changes in respect
     thereto until a subsequent change in writing by the Client.

<PAGE>
                                      EXHIBIT B

                              DATA PROCESSING SERVICES


     The Client's responsibility shall be:

     To furnish data to Administrator in a timely manner where data is not
     directly received by Administrator.

     The Administrator's responsibilities shall be:

     To provide all data processing services necessary to the normal
     administration of the subject policies as called for by this Agreement.





<PAGE>
                                     Exhibit C
                                     
                                       FEES


     Client will be charged monthly according to the following schedule.  Said
     charges will be allocated between Client and Administrator in their
     respective capacities as Company and Reinsurer as part of the monthly
     accounting as set forth in the Reinsurance Agreement.


     Maintenance
          Monthly Fee Per Policy
     Policy Status                         In Force (Beginning of Month)

     Premium Paying .............................  $2.19
     Fully Paid Up  .............................   1.36
     Reduced Paid Up..............................   .84


     Policy Issue

     Fee per policy issued....................... $35.00


     Inflation

     On each anniversary of the Effective Date of this Agreement, the per
     policy fees will increase 3% (compounded).


     Direct Expenses of Client

     The Client will be solely responsible for actual costs incurred in
     marketing new business and for fees of attorneys, accountants, tax
     advisers and other consultants or professionals, if any (unless
     specifically otherwise provided for elsewhere in this Agreement).  Client
     will also be solely responsible for any fees incurred by Administrator to
     obtain and maintain a Third Party Administrator's license (if such license
     is required).









     <PAGE>

                                                       EXHIBIT 7.1

                                ARBITRATION AGREEMENT


          This agreement ("Arbitration Agreement") is made between American
     Capitol Insurance Company ("American Capitol"), a Texas domiciled life
     insurance company with its principal office in Houston, Texas, and World

     Service Life Insurance Company of America ("World Service"), an Alabama
     domiciled life insurance company with its principal office in Winchester,
     Tennessee, to be effective on June 1, 1996.

          WHEREAS, American Capitol and World Service have entered into an
     Agreement of Reinsurance and Assumption ("Assumption Reinsurance
     Agreement"), supplemented and amended by a Reinsurance Agreement

     ("Reinsurance Agreement") effective June 1, 1996, (collectively referred
     to as "Reinsurance") relating to certain life insurance policies,  and

          WHEREAS, the Parties desire to provide for an efficient and
     expeditious way in which to resolve any disputes that might arise between
     the Parties in respect to said Reinsurance.

          NOW, THEREFORE, the Parties agree as follows:

                                  ARTICLE I

     1.1  The above recitations are true and correct.
          
     1.2  The following words when appearing in this Arbitration Agreement with
     initial capital letters shall have the meaning ascribed to them as
     follows:
          
     (a)  "Party" shall mean either American Capitol or World Service.
          
     (b)  "Reinsurance" shall mean the reinsurance relationship between the
          established by the Agreement of Assumption Reinsurance and the
          Reinsurance Agreement identified herein, including written amendments
          thereto.

     (c)  "Arbitrator" shall mean one of the three arbitrators selected as
          herein provided.  "American Capitol's Arbitrator" shall mean the
          Arbitrator designated as such by American Capitol.  "World Service's
          Arbitrator" shall mean the Arbitrator designated as such by World
          Service.  "Parties' Arbitrators" shall mean American Capitol's
          Arbitrator and World Service's Arbitrator.  The "Third Arbitrator"
          shall mean the Arbitrator selected by the Parties' Arbitrators as
          herein provided.  The "Arbitration Committee" shall mean the three
          Arbitrators acting as a committee in their capacity as arbitrators. 
          An Arbitrator must be an actuary, either actively engaged in private
          practice in the United States or an employee of a life insurance
          company domiciled in the United States, who has had experience in the
          valuation of blocks of life insurance business, who has signed one or
          more annual statements filed by a United States domiciled life
          insurance company with insurance regulatory departments, and who has
          been a member in good standing of the Society of Actuaries for a
          continuous period of not less than five (5) years.
<PAGE>
     (d)  "Claimant" shall mean the Party who initiates the arbitration process
          by filing a Claim.  "Respondent" shall mean the other Party. 
          "Counter-Claimant" shall mean the Respondent in the event the
          Respondent files a Counter-Claim.
          
     (e)  "Claim" shall mean the written statement given by the Claimant as
          herein provided to the Respondent, describing how and to what extent
          the Claimant believes that it has suffered damages as a result of the
          breach of the Reinsurance by the Respondent.

     (f)  "Response" shall mean the written statement given by the Respondent
          as herein provided to the Claimant, setting forth Respondent's
          explanation and defenses explaining why Respondent believes it is not
          liable to Claimant as claimed by Claimant.

          (g)  "Counter-Claim" shall mean the written statement given by the
          Respondent as herein provided to the Claimant, describing how and to
          what extent the Respondent believes that it has suffered damages as a
          result of the breach of the Reinsurance by the Claimant.

     (h)  "Counter-Response" shall mean the written statement given by the
          Claimant as herein provided to the Respondent, setting forth
          Claimant's explanation and defenses explaining why Claimant believes
          it is not liable to Respondent as claimed by the Respondent.

          (i)  "Arbitration Award" (or "Award") shall mean the conclusion or
          judgment reached by the Arbitrators, or any two of them, when reduced
          to writing and signed by them or any two of them and delivered to the
          Parties as herein provided, which written statement shall set forth a
          sum of money deemed to be the damages suffered by the prevailing
          Party, plus interest if applicable in the opinion of the Arbitrators
          (or any two of them), at a rate deemed by them to be fair, plus the
          setting of a per diem rate of interest to be added for each day
          thereafter the Award is not paid, plus a reasonable amount for
          expenses, including attorney's fees, costs of accounting, actuarial
          (including the cost of the Party's designated actuary) and other
          professional assistance and other costs, to be added to the Award
          only if the Arbitrators (or any two of them) believe that the losing
          Party was guilty of misconduct which misconduct contributed to the
          initiation of the arbitration process which otherwise would not have
          been necessary, or which misconduct unduly protracted and/or
          increased the expense of the arbitration process.  "Misconduct" as
          used in the immediately preceding sentence shall include conduct such
          as the taking of a frivolous position or positions that prolongs or
          exacerbates the arbitration process, or the refusal or unreasonable
          delay in responding to written requests by the Arbitration Committee
          for information.

          (j)  The "Commencement Date" shall have the meaning set forth in 
          Section 2.3.

     1.3  In the event of one of the parties disagrees with the other Party in
     respect to any matter claimed to be covered by the Reinsurance, the
     Claimant shall give its Claim  to the Respondent.  The Claim shall set
     forth the nature of the claim and sufficient facts relating thereto, as
     well as documentation to the extent available, to provide to the
     Respondent a reasonably complete description and explanation regarding the
     Claim.  The Claim must be given within ninety (90) days from the date on
     which the Claimant first became aware of the facts that form the basis of
<PAGE>     
     the Claim and that a disagreement exists in respect to same.  Within
     thirty (30) days from the date of receipt by the Respondent of said Claim,
     Respondent shall give its Response setting forth sufficient facts relating
     thereto, as well as documentation to the extent available, to provide to
     the Claimant a reasonably complete description and explanation regarding
     the Respondent's defense.  If Respondent has knowledge at the time of
     giving its Response of a Counter-Claim that Respondent desires to submit
     for arbitration, whether relating to Claimant's Claim or otherwise,
     Respondent must give its Counter-Claim as a part of its Response (such
     Counter-Claim setting forth  sufficient facts relating thereto, as well as
     documentation to the extent available, to provide a reasonably complete
     description and explanation regarding the Respondent's Counter-Claim, in
     which case Claimant must provide a Counter-Response within thirty (30)
     days from the date of receipt by the Claimant of said Counter-claim,
     setting forth sufficient facts relating thereto, as well as documentation
     to the extent available, to provide a reasonably complete description and
     explanation regarding the Claimant"s defense to such Counter-Claim.

                                 ARTICLE II

     2.1  After the arbitration process has been initiated as aforesaid, and
     within thirty (30) days from the date on which the Response was given (or
     within thirty (30) days from the date on which the Counter-Response was
     given, if applicable), each Party must designate in writing to the other
     Party its Arbitrator.  Such designation by the Claimant and the Respondent
     shall have the effect of certifying by such Party that, to the best of its
     knowledge after reasonable investigation and inquiry, the actuary
     designated as its Arbitrator has read this Arbitration Agreement, the
     Claim and Response (and Counter-claim and Counter-response, if
     applicable), understands the qualifications required to serve as an
     Arbitrator under this Arbitration Agreement, and has agreed that he or she
     is accordingly qualified and is willing to serve and comply with the terms
     of this Arbitration Agreement.  To signify such agreement, each such
     Arbitrator shall sign copies of this Arbitration Agreement and deliver a
     signed copy to each Party and to the other Arbitrator.

     2.2  From the date on which both Parties have designated their respective
     Arbitrators as aforesaid, and thereafter throughout the arbitration
     process, including the selection of the Third Arbitrator as hereinafter
     set forth, the Arbitrators shall not engage in any ex parte communications
     with the Parties or their representatives.  They may, but only at their
     initiative, engage in communications with the Parties or their
     representatives in writing, by telephone conference or meetings, but only
     in a manner that involves both Parties (or their representatives) on an
     equal access opportunity who shall be privy to all elements of such
     communications.  The Arbitration Committee shall obtain from each Party a
     designated officer to be responsible for all communications on behalf of
     such Party (the "Party's Designated Officer").

     2.3  The Parties' Arbitrators shall promptly select the Third 
     Arbitrator and together the three Arbitrators shall constitute the
     Arbitration Committee.  The Parties' Arbitrator shall attempt to select as
     the Third Arbitrator an actuary with qualifications and experience that
     they deem to be most relevant to the issues presented based on their
     review of the Claim and Response (and Counter-Claim and Counter-Response,
     if applicable), also keeping in mind the logistics and costs in the
     calling of meetings, but in any case the selection of the Third Arbitrator
     as aforesaid shall be final.  The Third Arbitrator shall signify his or
     her agreement to serve as the Third Arbitrator by signing copies of this
<PAGE>
     Arbitration Agreement and immediately providing a signed copy to each
     Party and to the Parties' Arbitrators.  The arbitration process shall be
     deemed to commence on the date on which the Third Arbitrator signifies his
     or her acceptance by delivering copies of this Arbitration Agreement to
     the Parties signed by him or her as herein provided ("Commencement Date"). 
     The Parties agree that they will not at any time attempt to influence the
     selection of the Third Arbitrator and shall not at any time attempt to
     influence the arbitration process or its outcome except in the course of
     any non-ex parte communications permitted hereunder. The Parties'
     Arbitrator shall diligently try to secure the Third Arbitrator within
     thirty (30) days from the date on which both of the Parties' Arbitrators
     agree to serve.  If the Parties' Arbitrators are not able to arrange for
     the services of a Third Arbitrator within thirty (30) days as aforesaid,
     they shall notify the Parties to that effect so that the Parties, if they
     choose, can agree upon an amended procedure to accommodate the process,
     but if no such agreement is made within fifteen (15) days from the receipt
     by both Parties of the aforesaid notice from the Parties' Arbitrators, the
     arbitration shall be deemed to be terminated.

     2.4  The signature of each Arbitrator affixed to a copy of this 
     Arbitration Agreement shall certify that, to the best of his knowledge and
     belief, he has no conflict of interest in performing his services as an
     Arbitrator and that neither he nor his employer, affiliates or his firm
     ("firm" shall include all partners, employees, associates and affiliates
     of the firm), as the case may be, has any financial or familial
     relationship with either of the other two Arbitrators or their employers
     or firms, or (except for each of the Parties' Arbitrators relationship
     with the Party designating such Arbitrator) either of the Parties or their
     partners, employees, associates  or affiliates, as the case may be, and
     that neither he nor his firm has or expects to have any interest in the
     outcome of the arbitration or the dispute between the Parties (except for
     compensation for the their services as Arbitrators as herein provided).

     2.5  The signature of each Arbitrator affixed to this Arbitration
     Agreement shall signify his or her commitment to serve as an Arbitrator in
     a professional and efficient manner, to complete the arbitration process,
     and to make himself available to do so in a reasonably expeditious manner. 
     In the event either of the Parties' Arbitrators becomes unable to proceed
     as an Arbitrator, due to resignation, death, incapacity or otherwise, the
     Party who designated such Arbitrator shall designate a replacement
     Arbitrator within thirty (30) days from the date on which said Party
     becomes aware of the fact that its previously designated Arbitrator became
     unable to serve as aforesaid.  Failure to designate the replacement
     Arbitrator within the thirty (30) days as aforesaid will constitute a
     default by such Party and thereby authorize the other two Arbitrators to
     proceed with the power and authority of the Arbitration Committee under
     this Agreement.  In the event the Third Arbitrator becomes unable to
     proceed as an Arbitrator, due to resignation, death, incapacity or
     otherwise, the Parties' Arbitrators shall proceed to select a replacement
     Third Arbitrator within thirty (30) days from the date on which the
     Parties' Arbitrators become aware of the fact that the Third Arbitrator
     became unable to serve as aforesaid.  If the Parties' Arbitrators are
     unable to select a replacement Third Arbitrator within thirty (30) days as
     aforesaid, they shall notify the Parties to that effect so that the
     Parties, if they choose, can agree upon an amended procedure to
     accommodate the process, but if no such agreement is made within fifteen
     (15) days from the receipt by both Parties of the aforesaid notice from
     the Parties' Arbitrators, the arbitration shall be deemed to be
     terminated.  Any subsequent inability of an Arbitrator to continue to
<PAGE>
     serve as such shall result in a replacement in the same manner as stated
     above.

     2.6  Each Arbitrator shall be entitled to compensation for his 
     services as an Arbitrator as herein provided (which shall be in accordance
     with the standards in the Society of Actuaries and such actuary's
     contemporaneous billing practices) and to reimbursement for reasonable
     costs incurred by him as an Arbitrator.  If his charges for his services
     are based on an hourly rate, he shall provide notice in advance of the
     amount of his hourly rate and information regarding his billing standards. 
     He shall maintain contemporaneous records of the time expended by him
     during the arbitration process, the date on which the time was expended
     and a brief description of the activity involved, which shall be provided
     as support for his bill.  Charges for costs to be reimbursed shall be
     supported by commercially reasonable documentation.  American Capitol's
     Arbitrator shall be accountable as aforesaid only to American Capitol who
     shall be solely responsible for paying such Arbitrator's bills.  World
     Service's Arbitrator shall be accountable as aforesaid only to World
     Service who shall be solely responsible for paying such Arbitrator's
     bills.  The Third Arbitrator shall be accountable to both American Capitol
     and World Service as aforesaid and American Capitol shall be responsible
     for paying one/half of the Third Arbitrator's bills and World Service
     shall be responsible for paying one/half of the Third Arbitrator's bills. 
     Each Arbitrator shall make advance arrangements to his satisfaction
     regarding responsibility for the payments of his bills.  Each Party shall
     execute and deliver to any Arbitrator as requested an agreement to hold
     such Arbitrator harmless from any and all liability and expense
     attributable to serving as an Arbitrator hereunder, except for bad faith
     and misconduct (as judged by ethical standards applicable to members of
     the Society of Actuaries).  Bills may be submitted monthly and shall be
     payable within ten (10) days of receipt.

                                    ARTICLE III

     3.1  The Third Arbitrator shall serve as chairman of the Arbitration
     Committee and as such shall be responsible for calling meetings and for
     making the efforts to move the process along so as to complete it in an
     expeditious and efficient manner.  The Arbitrators shall take into account
     the Claim and response (and the Counter-Claim and Counter-response, if
     applicable) and such other information as they may deem relevant.  The
     Arbitration Committee may, in its discretion, invite each Party to present
     its case at a hearing in the presence of the Arbitration Committee and in
     the presence of the other Party, at which hearing testimony of witnesses
     and other evidence may be presented.  Such hearing shall follow,
     informally, the format of a judicial hearing, and each Party shall be
     entitled to be represented by an attorney.  However, the proceedings shall
     take place in the manner directed by the Arbitration Committee.  The
     Arbitration Committee is authorized to make such additional investigations
     as they may deem to be reasonable including the employment of experts or
     professionals as consultants, and shall be reimbursed for the costs of
     same as an expense of the Third Arbitrator.  The Arbitration Committee, if
     it requests information from a Party that may involve a significant cost
     to such Party to produce, may decide, and so notify such Party in writing,
     that such cost will be assessed as an expense of the Third Arbitrator, so
     that such Party will receive reimbursement for same.  In the event an
     issue arises and the Arbitrators are unable to concur unanimously upon its
     resolution, and a disposition of such issue is required in order to
     proceed with the arbitration, the Third Arbitrator shall reduce the matter
     to writing which, when signed by any two of the Arbitrators, shall be a
     conclusive resolution of the issue, and the arbitration shall proceed
     accordingly.  While it is recognized that the Parties' Arbitrators have
     been designated by the Parties, during the arbitration process they shall
     not feel obligated to act as advocates for the Party who designated them,
     but instead they shall consider that their primary obligation is to assist
     in determining a reasonable, just and prompt resolution of the dispute or
     disputes to which agreement of at least two Arbitrators can be achieved. 
     The Arbitrators shall make reasonable efforts to maintain as confidential
     the arbitration process, its status or progress or any indication of its
     outcome, and the information disclosed to them in the course of the
     arbitration.  The Arbitrators shall not discuss the arbitration matters
     between themselves or with anyone else unless all three Arbitrators are
     present and participating.

     3.2  The Arbitration Committee shall make its best efforts to 
     complete the arbitration process within thirty (30) days from the
     Commencement Date.  The conclusion of the arbitration shall be when any
     two of the Arbitrators sign a written statement that adequately
     encompasses all of the issues in dispute, showing a single money award as
     an award of damages if appropriate (the "Arbitration Award").  It would be
<PAGE>
     desirable, but not necessary, for all three Arbitrators to sign the
     Arbitration Award.  The Arbitration Award signed as aforesaid in duplicate
     originals shall be delivered promptly to each of the Parties, to be
     received by each Party on the same date.
     
     3.3  In the event the Arbitration Committee determines that it is unable
     to resolve the dispute or disputes and obtain the signatures of two of the
     Arbitrators on an Arbitration Award, the Third Arbitrator shall so notify
     the Parties at that time, and in any event the Third Arbitrator must send
     such notice within sixty (60) days from the Commencement Date.  During the
     course of the arbitration process if the likelihood that an Arbitration
     Award cannot be agreed upon by the Arbitration Committee, the Third
     Arbitrator, in his sole discretion, may communicate such information to
     the Parties (avoiding ex parte communications) to allow the Parties an
     opportunity to correct the problem that seems to be hindering the process. 
     However, notwithstanding anything to the contrary herein contained, if the
     Arbitration Committee has not agreed upon an Arbitration Award on or
     before ninety (90) days following the Commencement Date, and if the
     arbitration process is not amended by the Parties prior thereto as
     aforesaid, the Arbitration Committee shall be deemed to be dissolved and
     the arbitration shall be deemed to be terminated; provided, however, that
     either Party may extend the aforesaid ninety (90) day period by and
     additional thirty (30) days by giving written notice to the other Party
     and to the Arbitrators to that effect prior to the end of the aforesaid
     ninety (90) day period.
     
     3.4  If one of the Parties commits a material breach of this 
     Arbitration Agreement the other Party shall be entitled to a ruling from
     the Arbitration Committee in support of such Party's position, including
     an Arbitration Award that follows therefrom.  Furthermore, if the
     arbitration does not result in the an Arbitration Award as set forth in
     Section 3.2 and if the primary cause for such failure is a material breach
     of this Arbitration Agreement by one of the Parties (referred to in this
     section as the "first Party"), and if the other Party (referred to in this
     Section as the "second Party") has not committed (prior to the
     aforementioned breach) a material breach, then the second Party shall be
     entitled to a ruling from the Arbitration Committee in support of the
     second Party's position, including an Arbitrator's award that follows
     therefrom.  "Primary cause" as used in the immediately preceding sentence
     shall mean a material breach of this Arbitration Agreement which
     materially hindered the progress of the arbitration process, or prevented<PAGE>
     the arbitration from taking place or being completed or which improperly
     influenced, or improperly attempted to influence, the outcome of the
     arbitration.  A "material breach" as used in this Section shall mean a
     breach of this Arbitration Agreement but for which the arbitration process
     would have been able to run its course on schedule and with the prospect
     for successful alternative dispute resolution that could  reasonably have
     been expected.

                                   ARTICLE IV

     4.1  The Parties shall be bound by the Arbitration Award for all purposes,
     and the such award shall not be subject to appeal to a court or subject to
     modification or replacement by a court.  The prevailing Party shall be
     entitled to apply to any court having jurisdiction over the Parties to
     have such court render judgement in favor of the prevailing Party against
     the losing Party as set forth in the Arbitration Award.


<PAGE> 
    4.2  The only purpose of this Arbitration Agreement is to resolve all
     disputes regarding the Reinsurance and no other issues are intended to be
     addressed hereby.  If the arbitration process does not result in the
     establishment of an Arbitration Award as aforesaid, neither Party shall be
     prejudiced by the arbitration proceedings in any subsequent proceedings
     regarding the Reinsurance.

     4.3  This Arbitration Agreement shall be binding upon the Parties and
     their successors and heirs, as the case may be, and no amendment hereto
     shall be binding unless signed by the Parties. 

     4.4  Written communications required or permitted under this Agreement
     shall be made as herein provided.  Signatures reflected in facsimile
     transmissions shall be as binding as original signatures.  Notices
     received by facsimile transmissions shall be effective on the day of
     transmission.  American Capitol's facsimile telephone number is (713) 953
     7920 and World Service's facsimile telephone number is (615) 962-4926. 
     "Overnight" deliveries shall be deemed to be received on the business day
     following dispatch to the addresses of the respective addressees.  Regular
     mail deliveries shall be deemed to be received on the third day following
     posting to the addresses of the respective addressees.  A copy of any
     written communication sent by an Arbitrator to another Arbitrator shall be
     sent to both other Arbitrators; if sent to a Party, copies shall be sent
     to both Parties.  A copy of any written communication sent by a Party to
     an Arbitrator shall be sent to the other Party and the other Arbitrators.

          IN WITNESS WHEREOF, this Arbitration Agreement is an Exhibit to the
     above mentioned Reinsurance Agreement.  The Parties, by executing and
     delivering said Reinsurance Agreement, intend to adopt this Arbitration
     Agreement as though it had been separately executed and delivered by the
     Parties.  Signature lines are set forth below for the use of the
     Arbitrators as hereinabove set forth.

     American Capitol's Arbitrator:          World Service's Arbitrator:


     ------------------------------          ---------------------------
     ------------------------------          ---------------------------
       Printed Name                                 Printed Name

     Date:-------------------------          Date:----------------------

     Third Arbitrator:

     ------------------------------
     ------------------------------
          Printed Name

     Date:-------------------------
<PAGE>