EMPLOYERS REINSURANCE CORPORATION

                                  WHOLE ACCOUNT
                      AGGREGATE EXCESS OF LOSS RETROCESSION
                              REINSURANCE AGREEMENT
                                                                            PAGE
ARTICLE 1         BUSINESS COVERED............................................1
ARTICLE 2         TERM........................................................2
ARTICLE 3         EXTENDED EXPIRATION.........................................2
ARTICLE 4         TERRITORIAL SCOPE...........................................2
ARTICLE 5         WARRANTIES..................................................2
ARTICLE 6         EXCLUSIONS..................................................3
ARTICLE 7         AGGREGATE RETENTION.........................................4
ARTICLE 8         COVERAGE....................................................4
ARTICLE 9         AGGREGATE LIMIT.............................................5
ARTICLE 10        CO-PARTICIPATION............................................6
ARTICLE 11        DEFINITIONS.................................................6
ARTICLE 12        NET RETAINED LINES..........................................12
ARTICLE 13        REINSURANCE PREMIUMS........................................12
ARTICLE 14        REINSURERS' MARGIN..........................................14
ARTICLE 15        CEDING COMMISSION...........................................15
ARTICLE 16        CURRENCY....................................................15
ARTICLE 17        TAXES.......................................................15
ARTICLE 18        REPORTS AND PREMIUM SETTLEMENTS.............................16
ARTICLE 19        ULTIMATE NET LOSS SETTLEMENTS...............................17
ARTICLE 20        NOTIONAL PROFIT SHARING ACCOUNT AND CONTINGENT
                  TRANSFER OF ADDITIONAL COLLATERAL.....18
ARTICLE 21        ADDITIONAL CONSIDERATION....................................20
ARTICLE 22        LOSS IN EXCESS OF ORIGINAL POLICY LIMITS....................20
ARTICLE 23        EXTRA CONTRACTUAL OBLIGATIONS...............................20
ARTICLE 24        OFFSET......................................................21
ARTICLE 25        COMMUTATION.................................................21
ARTICLE 26        PROFIT SHARING..............................................22
ARTICLE 27        CHANGE IN ADMINISTRATIVE PRACTICES..........................22
ARTICLE 28        ERRORS AND OMISSIONS........................................23
ARTICLE 29        ACCESS TO RECORDS...........................................23
ARTICLE 30        INSOLVENCY..................................................24
ARTICLE 31        ARBITRATION.................................................25
ARTICLE 32        SECURITY....................................................26
ARTICLE 33        MIX OF BUSINESS.............................................29
ARTICLE 34        GOVERNING LAW...............................................30
ARTICLE 35        COMPANY'S INTERESTS & LIABILITIES...........................30
ARTICLE 36        PARTIES TO THIS AGREEMENT...................................30
ARTICLE 37        ENTIRE AGREEMENT............................................30
ARTICLE 38        INTERMEDIARY................................................30

<PAGE>


                                    EXHIBITS


   EXHIBIT A             INURING REINSURANCE

   EXHIBIT B             MIX OF BUSINESS

   EXHIBIT C             NUCLEAR  INCIDENT   EXCLUSION   CLAUSE  -  LIABILITY  -
                         REINSURANCE - U.S.A. (NMA 1590) (BRMA 35A)

   EXHIBIT D             NUCLEAR INCIDENT  EXCLUSION CLAUSE - PHYSICAL DAMAGE  -
                         REINSURANCE - U.S.A.  (NMA 1119) (BRMA 35B)

   EXHIBIT E             NUCLEAR  ENERGY RISKS  EXCLUSION  CLAUSE  (REINSURANCE)
                         1984 (WORLDWIDE EXCLUDING U.S.A. AND CANADA) (NMA 1975)
                         (BRMA 34B)

   EXHIBIT F             WAR RISKS EXCLUSION CLAUSE (REINSURANCE) (BRMA 56B)

   EXHIBIT G             INSOLVENCY  FUNDS EXCLUSION  CLAUSE [EXHIBIT  H  POOLS,
                         ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE]



<PAGE>



                                  WHOLE ACCOUNT
                      AGGREGATE EXCESS OF LOSS RETROCESSION
                              REINSURANCE AGREEMENT

                  (hereinafter referred to as the "Agreement")


                                    issued to

                       EMPLOYERS REINSURANCE CORPORATION,
                              Overland Park, Kansas
                               (hereinafter "ERC")
                           GE REINSURANCE CORPORATION,
                              Barrington, Illinois
                              (hereinafter "GE Re")
                                       and
                GE FRANKONA RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
                                 Munich, Germany
                           (hereinafter "GE Frankona")

           (hereinafter referred to individually as a "Ceding Company"
                       and collectively as the "Company")

                                       by

                             Subscribing Reinsurers
             on Interests and Liabilities Contracts attached hereto

           (hereinafter referred to collectively as the "Reinsurers")


                                    ARTICLE 1
                                    ---------

                                BUSINESS COVERED
                                ----------------

In consideration of the payment of premium and subject to the terms, conditions,
and limitations of this Agreement, the Reinsurers agree to indemnify the Company
with respect to the Subject  Ultimate Net Losses which may accrue to the Company
as a result of losses  occurring and claims made during the Term (as hereinafter
defined),  all as per underlying policies and binders of insurance,  facultative
certificates  and  reinsurance  treaties  (hereinafter  referred  to as "Subject
Business")  as respects  all classes of business  underwritten  by the  Company,
including  the  2002  Accident  Year  Whole  Account  Aggregate  Excess  of Loss
Coverages  Written by the Company for Affiliated  Companies,  all subject to the
terms, conditions, and exclusions of this Agreement.

                                       1

<PAGE>

The Company may also include this coverage for newly acquired affiliates up to a
maximum of $XXX.X million of additional  affiliate  Aggregate  Limit,  provided,
however,  the Company and the  Reinsurers  mutually  agree to an  adjustment  to
premium.



                                    ARTICLE 2
                                    ---------

                                      TERM
                                      ----

This Agreement shall apply to losses occurring and claims made during the period
commencing  on January 1, 2002 and  expiring on  December  31,  2002,  both days
inclusive,  Local  Standard Time at the place where the loss occurs or the claim
is made (the "Term").



                                    ARTICLE 3
                                    ---------

                               EXTENDED EXPIRATION
                               -------------------

Should this Agreement expire while a Property Catastrophe Loss covered hereunder
is in progress, the Reinsurers shall be responsible for the Property Catastrophe
Loss in  progress  in the same  manner and to the same extent it would have been
responsible  had the Agreement  expired the day following the  conclusion of the
loss in  progress,  provided  that no part of the Property  Catastrophe  Loss is
claimed against any renewal of this Agreement.



                                    ARTICLE 4
                                    ---------

                                TERRITORIAL SCOPE
                                -----------------

The  territorial  limits of this Agreement  shall be identical with those of the
Subject Business.



                                    ARTICLE 5
                                    ---------

                                   WARRANTIES
                                   ----------

1.        The  Company  warrants  that  all  current  inuring  reinsurances,  as
          described in Exhibit A attached  hereto,  shall be in place at XXX% (X
          percent)  through  their  renewal  dates.   Also,  for  those  inuring
          reinsurances that renew during the Term, the Company warrants that the
          renewal  capacity for the  remainder of the Term is the greater of the
          actual  renewal  capacity  placed or XX% (X percent)  of the  expiring
          capacity  for such  reinsurances  which are  currently  in force as of
          January 1, 2002.

                                       2
<PAGE>


2.        The  Company  warrants  that  the historical data triangles  presented
          to the Reinsurers are materially  complete and correct as respects the
          basis of reporting  and other  caveats  provided by the Company to the
          Reinsurers.  Should it be later  determined that this is not the case,
          then the parties  shall agree to revise the  premium  terms  hereon to
          reflect the more accurate historical information with the objective of
          maintaining  the same  economic  risk relative to Ultimate Net Loss on
          the new expected payment patterns drawn from the corrected  historical
          data.

          The Reinsurers  shall  calculate such premium  adjustment,  consistent
          with  the  modeling  assumptions  used by the  Intermediary,  with the
          guidance of and review by the Intermediary. The Company and Reinsurers
          shall try to agree to an adjustment  that is mutually  acceptable.  In
          the event that an agreement  cannot be reached,  the Reinsurers  shall
          select an independent third party actuarial firm that is acceptable to
          the Company to make a determination of the premium  adjustment,  which
          shall be binding upon both  parties.  Both parties shall equally share
          the cost of such  independent  third party actuarial firm. There shall
          be no change to Reinsurers' Margin as a result of this adjustment.

3.        The  Company  warrants  that   Employers  Reinsurance  Corporation  is
          fully authorized by GE Reinsurance  Corporation and GE Frankona to act
          as their agent with respect to all matters under this Agreement.



                                    ARTICLE 6
                                    ---------

                                   EXCLUSIONS
                                   ----------

This  Agreement  shall  not apply to and  specifically  excludes  from  coverage
hereunder:

A.   Nuclear Incident, in accordance with the following clauses:

     1.  Nuclear  Incident  Exclusion Clause - Liability -  Reinsurance - U.S.A.
         (NMA 1590) (BRMA 35A), attached hereto as Exhibit C;

     2.  Nuclear  Incident  Exclusion  Clause - Physical  Damage - Reinsurance -
         U.S.A. (NMA 1119) (BRMA 35B), attached hereto as Exhibit D;

B.       Nuclear  Energy  Risks,  in  accordance  with the Nuclear  Energy Risks
         Exclusion  Clause (Reinsurance) 1984  (Worldwide  Excluding  U.S.A. and
         Canada) (NMA 1975) (BRMA 34B) attached hereto as Exhibit E;

C.       War  Risks,  in  accordance   with  the  War  Risks  Exclusion   Clause
         (Reinsurance) (BRMA 56B) attached hereto as Exhibit F;

D.       Insolvency Funds Exclusion Clause, attached hereto as Exhibit G;

E.       Financial  Guaranty (insuring  the  ability of  a  party "to pay a debt
         or  complete  a  contractual  obligation",  i.e.,  mortgage  insurance,
         surety, etc.);
                                       3

<PAGE>


F.       Pools,  Associations  and  Syndicates (not  including  IRI  Association
         business), in accordance  with the clause attached hereto as Exhibit H.
         IRI Association  business shall  mean business  underwritten by the IRI
         profit center of Employers Reinsurance Corporation;

G.       Any  and  all  liability  emanating  from  the U.S.  terrorist  acts of
         September 11, 2001.

H.       Finite  business  shall  be  excluded  from coverage.  Finite  Business
         shall  mean all business  underwritten  by Irish  European  Reinsurance
         Company  Ltd.,  Dublin,  Ireland and  Luxembourg  European  Reinsurance
         S.A.,  Luxembourg,  both finite  specialty  companies  of  ERC.  Finite
         business shall also include retroactive/prospective whole  account stop
         loss  reinsurances  underwritten  by  the  Company  or  its  Affiliated
         Companies where the primary  objective of the Company's  clients is to
         record  underwriting  income from the transaction.  Accident and Health
         Finite Business shall also be excluded from coverage.

I.       Any  specific  insurance/reinsurance coverages outside of the Company's
         third  party  non-GE open  market business  in respect of  GE exposures
         (i.e.,  no   coverage   for  specific  insurances/reinsurances  written
         directly on GE exposures).

J.       Life insurance and life reinsurance liability.



                                    ARTICLE 7
                                    ---------

                               AGGREGATE RETENTION
                               -------------------

The Company  shall retain net for its own account an amount of Subject  Ultimate
Net Loss equal to XX.XXX% (X point X percent) of the Subject Net Earned  Premium
("SNEP") for the Term of this Agreement (the "Aggregate Retention").

The Aggregate  Retention of the Company,  the liability of the Reinsurers to the
Company  and all other  benefits  accruing  to the  Company as  provided in this
Agreement, or any amendments hereto, shall apply to the companies comprising the
Company as a group and not separately to each of the companies.


                                    ARTICLE 8
                                    ---------

                                    COVERAGE
                                    --------

The  Reinsurers  shall  indemnify  the Company  for the paid  portion of Subject
Ultimate Net Loss,  subject to the Aggregate  Limit in Article 9, and subject in
all cases to the following  limits and  retentions for the following five layers
of coverage (collectively the "Coverage Layer Limits"):

Layer 1 - The limit for the first layer of coverage ("Layer 1") shall equal X.X%
(X point X percent)  of  Subject  Net  Earned  Premium,  subject to a maximum of
$XXX.XXX million (the "Layer 1 Limit"), excess of the Aggregate Retention as per
Article 7.

                                       4

<PAGE>

Layer 2 - The limit for the second  layer of  coverage  ("Layer  2") shall equal
X.X% (X point X percent) of Subject Net Earned Premium,  subject to a maximum of
$XXX.XXX  million (the "Layer 2 Limit"),  excess of the sum of the Layer 1 Limit
and the Aggregate Retention.

Layer 3 - The limit for the third layer of coverage ("Layer 3") shall equal X.X%
(X point X percent)  of  Subject  Net  Earned  Premium,  subject to a maximum of
$XXX.XXX million (the "Layer 3 Limit"),  excess of the sum of the Layer 1 Limit,
the Layer 2 Limit and the Aggregate Retention.

Layer 4 - The limit for the fourth  layer of  coverage  ("Layer  4") shall equal
X.X% (X point X percent) of Subject Net Earned Premium,  subject to a maximum of
$XXX.XXX million (the "Layer 4 Limit"),  excess of the sum of the Layer 1 Limit,
the Layer 2 Limit, the Layer 3 Limit and the Aggregate Retention.

Layer 5 - The limit for the fifth layer of coverage ("Layer 5") shall equal X.X%
(X point X percent)  of  Subject  Net  Earned  Premium,  subject to a maximum of
$XXX.XXX million (the "Layer 5 Limit"),  excess of the sum of the Layer 1 Limit,
the Layer 2 Limit,  the  Layer 3 Limit,  the  Layer 4 Limit,  and the  Aggregate
Retention.



                                    ARTICLE 9
                                    ---------

                                 AGGREGATE LIMIT
                                 ---------------

The maximum amount for which the Reinsurers  shall be liable  hereunder shall be
the  lesser of XX.X% (X point X  percent)  of  Subject  Net  Earned  Premium  or
$X,XXX.XXX million (the "Aggregate Limit").

Notwithstanding  the  Coverage  Layer  Limits,  Aggregate  Limit and  respective
Reinsurance  Premium terms hereon,  the Reinsurers shall not be obligated to pay
any further Ultimate Net Losses otherwise due to the Company upon the Reinsurers
sustaining a present  value  economic loss on a paid basis greater than XX.X% (X
point X percent) of total present value ceded Net Reinsurance Premiums hereon.

Present  value  economic  loss shall be based upon Ultimate Net Loss paid by the
Reinsurers  and Net  Reinsurance  Coverage Limit  Premiums,  and Net Premiums in
Respect of Shock Loss  Ultimate Net Loss,  if  applicable,  paid by the Company,
being  discounted at a X.X% (X point X percent)  effective annual rate for those
Ultimate Net Loss payments made from the Notional  Profit Sharing  Account and a
X.X% (X point X percent)  effective  annual rate for Ultimate Net Loss  payments
made from the Reinsurers' Margin, and other funds of the Reinsurers, all back to
inception of this Agreement.

                                       5

<PAGE>



                                   ARTICLE 10
                                   ----------

                                CO-PARTICIPATION
                                ----------------

Should the Subject Net Earned Premium  exceed  $X,XXX.XXX  million,  the Company
shall  retain a  co-participation  for all coverage  percentages  of Subject Net
Earned  Premium as  detailed  in  Articles 8 and 9. The  co-participation  shall
equal:

X.XX minus ($X,XXX.XXX million divided by actual Subject Net Earned Premium) for
all limits of Coverage.

Co-participation payments will ultimately be calculated using the final value of
Subject Net Earned  Premium  (taking into account all Subject Net Earned Premium
during the Term of this Agreement).  Any co-participation payments made prior to
the  determination  of  such  final  value  shall  be  trued-up  based  on  such
calculation.



                                   ARTICLE 11
                                   ----------

                                   DEFINITIONS
                                   -----------

A.       "Additional  Consideration"  - shall  have  the  meaning  set forth  in
         Article 21 of this Agreement.

B.       "Affiliated  Companies"  -  Affiliated  Companies  shall  mean  Coregis
         Insurance  Company,  First Specialty  Insurance   Corporation,  Medical
         Protective  Company,  Westport  Insurance   Corporation,   GE  Frankona
         Reinsurance  Limited,  London,  UK (hereinafter  "GEF - London") and GE
         Frankona A/S, Copenhagen,  Denmark (hereinafter  "GEF-Copenhagen")  and
         newly acquired  companies  after the  effective date of this Agreement,
         subject to Article 1, Business Covered.

C.       "Company" - Whenever  the  word  "Company" is  used in this  Agreement,
         same shall be held to  include Employers  Reinsurance  Corporation,  GE
         Reinsurance         Corporation          and        GE         Frankona
         Ruckversicherungs-Atkiengesellschaft,     Munich,     Germany,     ("GE
         Frankona"),  each of which  shall be deemed to  be a "Company  member".
         The first named company  hereunder  shall be  deemed to be the agent of
         the Company.

D.       "Company  Plan  Shock  Loss  Ultimate  Net  Loss" - Company  Plan Shock
         Loss  Ultimate  Net Loss  shall  equal the sum of  items 1), 2), and 3)
         below:

         1) X.XX% (X point X percent) of ERC Company  only SNEP plus
         2) X.XX% (X point X percent) of GEF (Germany)  Company only  SNEP; plus
         3) X.XX% (X point X percent) of GE Re only SNEP

E.       "Defense  and   Cost   Containment   Expense"   -  Defense   and   Cost
         Containment   Expense  as  used   in  this  Agreement  shall  mean  all

                                       6

<PAGE>

          expenditures by the Company made in connection with the disposition of
          a  claim,  loss or  legal  proceeding  including  but not  limited  to
          expenses of salvage and  subrogation and legal expenses of litigation,
          investigation,  negotiation,  cost of bonds,  court  costs,  Statutory
          Penalties,  Prejudgment  Interest or Delayed Damages and post-judgment
          interest. Defense and Cost Containment Expenses shall also include the
          Company's   defense  costs  and  legal  expenses  incurred  in  direct
          connection   with  legal   actions,   including  but  not  limited  to
          declaratory  judgment  actions,  brought by any party to determine the
          Company's   defense  and/or   indemnification   obligations  that  are
          allocable only to policies and claims subject to this  Agreement.  Any
          declaratory  judgment  action  expenses  shall be  deemed to have been
          fully  incurred on the same date as the original claim (if any) giving
          rise to the  action.  Defense and Cost  Containment  Expense (s) shall
          also  include  legal  expenses,  including  such  expenses  related to
          declaratory  judgment  actions,  incurred  in  connection  with  Extra
          Contractual  Obligations  (as defined in Article 23 below) and Loss In
          Excess Of Original Policy Limits (as defined in Article 22 below).

          Defense and Cost Containment  Expenses shall not include the Company's
          office expenses and salaries of employees of the Company,  except:  1)
          reasonable  payments  to  attorneys  on the  Company's  staff  who are
          engaged in the  investigation,  litigation  or  settlement  of claims,
          suits, legal proceedings or losses reinsured under this Agreement;  2)
          when the Company uses its own employees or officials, including claims
          personnel  and  engineers  to  settle  losses,  the  Company  shall be
          permitted to include a pro rata share of reasonable  expenses incurred
          by and salaries  related to such  employees and  officials,  including
          claim personnel and engineers.

          The Company  warrants that allocation of Defense and Cost  Containment
          Expenses will remain consistent while the Agreement is in force and/or
          the Reinsurers are at risk.

F.        "Extra   Reinsurance  Premiums"  -  shall  mean  Reinsurance  Premiums
          payable in accordance with Article 32. Such Extra Reinsurance Premiums
          shall be in addition to Reinsurance Premiums, as per Article 13.

G.        "GE"  shall  mean   General  Electric  Company,  the  ultimate  parent
          company of ERC, GE Re and GE Frankona.

H.        "Gross  Reinsurance  Premiums" - as  used in this Agreement shall mean
          Net  Reinsurance  Premiums  grossed  up for a XX% (X  percent)  Ceding
          Commission.

I.        "Large  Property  Per  Risk  Ultimate  Net Loss" - shall be defined as
          Subject  Ultimate Net Loss from any one property per risk in excess of
          $XX,XXX,XXX (X million dollars) to the Company.

          All  Ultimate  Net Loss from ground up for such losses shall be deemed
          to be Large Property Per Risk Ultimate Net Loss.

J.        "Net  Reinsurance  Premiums" - as  used  in  this Agreement shall mean
          Net  Reinsurance  Coverage Limit Premiums plus Net Premiums in Respect
          of Shock Loss Ultimate Net Loss.

                                       7

<PAGE>

K.        "Non-Property  Catastrophe  Loss" shall  mean  any  catastrophe   loss
          incurred by the  Company  other than  Property  Catastrophe  Loss,  as
          defined below.

L.        "Non-Large  Property  Per  Risk  Ultimate  Net  Loss" shall  mean  any
          property  per risk loss  incurred  by the  Company  other  than  Large
          Property Per Risk Ultimate Net Loss, as defined above.

M.        "Non-Shock Loss" - shall mean  all  Ultimate  Net Loss subject to this
          Agreement other than Shock Loss as defined below.

N.        "Non-Shock Loss Subject Ultimate  Net Loss for  GE Re  and GE Frankona
          Combined Limitation"-  Non-Shock Loss Subject Ultimate Net Loss for GE
          Re and  GE  Frankona  Combined  shall  be  limited  to the  sum of the
          following:

          1) Plan  Non-Shock  Loss Subject  Ultimate Net Loss for GE Frankona of
             XX.XX% (X point X percent) of GE Frankona's underlying SNEP; plus

          2) Plan Non-Shock Loss Subject  Ultimate Net Loss for GE Re of XX.XXX%
             (X point X percent) of GE Re's underlying SNEP; plus

          3) $XXX million.

O.        "Non-Terrorism/Non-Terrorist  Related  Liability" shall  mean any loss
          incurred by the Company other than Terrorism/Terrorist  Activity Loss,
          as defined below.

P.        "Plan  Shock  Loss  Ultimate  Net Loss" - Plan Shock Loss Ultimate Net
          Loss shall be equal to the sum of the following:

          1) X.XX% (X point X percent) of ERC Company  only SNEP;  plus
          2) X.XX% (X point X percent) of GEF (Germany)Company only SNEP; plus
          3) X.XX% (X point X percent) of GE Re only SNEP; plus
          4) $X.X million in respect of Westport Insurance Corporation; plus
          5) $X.X million in respect of Coregis Insurance Company; plus
          6) $XX.X million in respect of GEF-London and GEF-Copenhagen combined.

          Estimated  Plan Shock Loss Ultimate Net Loss amount is $XXX.X  million
          in total.

Q.        "Prejudgment  Interest  or   Delayed  Damages"  -   as  used  in  this
          Agreement  shall  mean  interest  or  damages  added to a  settlement,
          verdict,  award,  or judgment based on the amount of time prior to the
          settlement, verdict, award or judgment whether or not made part of the
          settlement, verdict, award, or judgment.

R.        "Property  Catastrophe  Loss" - Property Catastrophe Loss, as  used in
          this  Agreement,  shall mean property  losses  recorded by the Company
          and/or  Affiliated  Companies  which  involve  two  or  more  original
          policies  as issued by the Company  and/or  Affiliated  Companies  and
          where the Company's  share of such losses  aggregate to at least $XX.X
          million.

                                       8
<PAGE>


S.        "Shock  Loss"  -  Shock   Loss  shall   mean  a  loss  emanating  from
          Terrorism/Terrorist  Activity,  Property  Catastrophe  Loss,  Workers'
          Compensation Catastrophe Loss and Large Property Per Risk Ultimate Net
          Loss and  includes  all  loss  emanating  from GEF - London  and GEF -
          Copenhagen, which is deemed Shock Loss for this coverage.

T.        "Shock  Loss  Subject  Ultimate  Net  Loss  Limitations"  - Shock Loss
          Subject Ultimate Net Loss is limited to the following:

          1.) All Shock Loss Subject Ultimate Net Loss in the aggregate shall be
              limited to XX.XXX% (X point X percent) of the SNEP of the Company.

          2.) Non-Terrorism/Non-Terrorist  Activity  Property  Catastrophe  Only
              shall be limited  to  XX.XXX%  (X point X percent) of  the SNEP of
              the Company.

          3.) Non-Terrorism/Non-Terrorist    Activity    Workers'   Compensation
              Catastrophe  Loss  Only  shall  be  limited  to  XX.XX% (X point X
              percent) of the SNEP of the Company.

          For each of the limitations above, if Affiliated  Companies have Shock
          Loss  Ultimate Net Loss in excess of Plan Shock Loss Ultimate Net Loss
          and to the extent extra Ultimate Net Loss is recoverable in affiliated
          internal coverages, such recoverable Ultimate Net Loss is deemed to be
          Shock Loss Subject Ultimate Net Loss for purposes of this limitation.

 U.       "Statutory  Penalties"  - shall  mean  fines  imposed  by  statutes or
          laws or related regulations.

 V.       "Subject  Net   Earned   Premium"  or "SNEP"  -  shall mean the earned
          premium of the Company gross of any acquisition costs (i.e., brokerage
          and  commissions)  during the Term of this  Agreement,  but net of the
          premium paid for all other  reinsurances which inure to the benefit of
          this  Agreement  with the  exception  of the Whole  Account  Aggregate
          Excess of Loss Retrocession Reinsurance Agreements.

          Both assumed and ceded reinstatement  premiums of the Company shall be
          included in the calculation of Subject Net Earned Premium. Reinsurance
          premiums  of ERC and GE  Frankona  related to the 2002  Accident  Year
          Whole  Account  Aggregate  Excess  of Loss  Coverages  Written  by the
          Company for the Affiliated  Companies  provided by ERC and GE Frankona
          to Affiliated  Companies  shall not be included in the  calculation of
          Subject Net Earned Premium.

          Subject Net Earned Premium is estimated to be $X,XXX.XXX million.

W.        "Subject  Ultimate  Net Loss" - as  used in  this Agreement shall mean
          the aggregate sum of amounts paid or payable by the Company on its net
          retained liability in settlement of losses, including Defense and Cost
          Containment  Expenses,  in respect of Subject  Business covered during
          the Term,  plus reserves for  outstanding  losses and Defense and Cost
          Containment Expenses, including reserves for incurred but not reported
          claims,  XXX% (X percent) of liability  for Loss in excess of Original

                                       9
<PAGE>

          Policy Limits and XXX% (X percent) of liability for Extra  Contractual
          Obligations  emanating  from  underlying  contracts  of the  Company's
          clients.  Subject  Ultimate Net Loss shall  include  Ultimate Net Loss
          assumed by the  Company  under the 2002  Accident  Year Whole  Account
          Aggregate   Excess  of  Loss  Coverages   Written  by  the Company for
          Affiliated Companies.

          Ultimate  Net Loss in respect of  internal  stop loss  coverages  with
          Affiliated  Companies shall be included in Subject  Ultimate Net Loss,
          however,  this  Agreement  shall not  provide  any direct  coverage to
          Affiliated Companies.

          Subject  Ultimate  Net  Loss  shall  be net of  inuring  reinsurances,
          whether  collectible  or  not,  and  also  net  of  all  salvages  and
          recoveries to be credited to the Company's  Net  Retention;  provided,
          however,  that in the event of the insolvency of the Company,  payment
          by the Reinsurers  shall be made in accordance  with the provisions of
          the Insolvency Article.

          Nothing  herein  shall be  construed  to mean that  losses  under this
          Agreement are not recoverable until the Company's Subject Ultimate Net
          Loss has been finally ascertained.

X.        "Terrorism/Terrorist Activity" shall  mean  any act or  preparation in
          respect of  action,  or threat of action  designed  to  influence  the
          government de jure or de facto of any nation or any political division
          thereof, or in pursuit of political, religious, ideological or similar
          purposes  to  intimidate  the public or a section of the public of any
          nation by any person or group(s) of persons whether acting alone or on
          behalf of or in connection with any  organization(s)  or government(s)
          de jure or de facto, and which:

              (i)   involves violence against one or more persons; or

              (ii)  involves damage to property; or

              (iii) endangers life other  than that of the person committing the
                    action; or

              (iv)  creates  a  risk  to  health  or  safety of  the public or a
                    section of the public; or

              (v)   is  designed  to  interfere with or to disrupt an electronic
                    system.

          Loss, damage, cost or expense arising out of or in connection with any
          action in controlling,  preventing, suppressing,  retaliating against,
          or  responding  to any act of Terrorism  shall be  considered  part of
          Terrorism Ultimate Net Loss.

Y.        "Total  Funding"  shall  mean  funding  provided  by the Reinsurers to
          equal XXX% (X  percent) of  Obligations,  as defined in Article 32, to
          allow the Company to take regulatory credit in all jurisdictions.

Z.        "Ultimate  Net  Loss" - Ultimate  Net Loss  shall  mean the  aggregate
          sum of amounts paid or payable in the  settlement of losses  including
          Defense  and  Cost  Containment   Expenses  by  the  Company  and  its
          Affiliated Companies on their net retained liability,  excluding,  for
          the Company,  the  ultimate  net loss in respect of the 2002  Accident
          Year Whole Account  Aggregate Excess of Loss Coverages  Written by the
          Company for the Affiliated Companies.

                                       10
<PAGE>


AA.       "2002   Accident   Year   Whole   Account  Aggregate  Excess  of  Loss
          Coverages Written by the Company for the Affiliated Companies" - shall
          mean the following  underlying Aggregate Limit and Aggregate Retention
          (to be calculated  by  multiplying  the Ultimate Loss Ratio  Aggregate
          Retention for each Affiliated  Company times the Affiliated  Company's
          Net  Earned  Premium)  provided  by the  Company  for each  Affiliated
          Company:

                           In Millions          Ultimate Net         In Millions
                         Aggregate Limit         Loss Ratio        Estimated Net
Affiliated Company           Amounts              Aggregate       Earned Premium
                                                  Retention
--------------------------------------------------------------------------------

GEF - London                  XXX.XX                XX.X%              XXX.X
Westport Ins. Co.              XX.XX                XX.X%              XXX.X
GEF - Copenhagen               XX.XX                XX.X%               XX.X
Medical Protective Co.         XX.XX                XX.X%              XXX.X
Coregis Insurance Co.          XX.XX                XX.X%              XXX.X
First Specialty Ins. Co.       XX.XX                XX.X%              XXX.X

BB.       "Ultimate  Net  Loss  Liability  Relating to Affiliated  Companies  in
          Respect of Shock Loss  Limitation"  - The maximum  Shock Loss Ultimate
          Net Loss in respect of each  Affiliated  Company to be applied against
          the internal 2002 Accident Year Whole Account Aggregate Excess of Loss
          Coverages  Written  by the  Company  for  Affiliated  Companies  is as
          follows:

                                                     In Millions
     Affiliated Company                                  UNL
     -----------------------------------------------------------
     Medical Protective Company                        $ XX.X
     Coregis Insurance Company                         $ XX.X
     Westport Insurance Company                        $ XX.X
     First Specialty Insurance Company                 $ XX.X
     GEF-London and GEF-Copenhagen Combined            $XXX.X

CC.       "Workers' Compensation  Catastrophe  Loss" - shall  mean, as  used  in
          this Agreement,  workers'  compensation losses recorded by the Company
          and/or Affiliated Companies which losses involve two or more employees
          and where the  Company's  share of such losses  aggregate  to at least
          $XX.X million.

                                       11

<PAGE>


                                   ARTICLE 12
                                   ----------

                               NET RETAINED LINES
                               ------------------

This  Agreement  applies  only to that  portion of any policy  which the Company
retains  net for its own  account,  and in  calculating  the  amount of any loss
hereunder  and also in  computing  the amount or amounts in excess of which this
Agreement attaches, only loss or losses in respect of that portion of any policy
which the Company retains net for its own account shall be included.

The amount of the  Reinsurers'  liability under this Agreement in respect of any
loss or losses shall not be increased by reason of the  inability of the Company
to collect from any other reinsurer(s); whether specific or general, any amounts
which may have become due from such other  reinsurer(s),  whether such inability
arises from the insolvency of such other reinsurer(s) or otherwise.


                                   ARTICLE 13
                                   ----------

                              REINSURANCE PREMIUMS
                              --------------------

A.   Net  Reinsurance  Coverage  Limit Premiums - The Company  shall  pay to the
     Reinsurers the following  reinsurance  premiums for the following layers of
     reinsurance   coverage  hereunder  (the  "Net  Reinsurance  Coverage  Limit
     Premiums"),  along with  interest  from January 1, 2002 through the date of
     payment at an effective  annual  interest rate of X.X% (X point X percent),
     to the Reinsurers.  Net Reinsurance Coverage Limit Premiums shall equal the
     sum of the following:

     Layer 1 - The Net  Reinsurance  Coverage  Limit  Premium  for Layer 1 shall
     equal X.XX% (X point X percent) of the Aggregate Limit plus XX% (X percent)
     of Subject  Ultimate  Net Loss ceded to Layer 1,  subject to a maximum  Net
     Reinsurance Coverage Limit Premium for Layer 1 equal to $XXX.XXX million.

     Layer 2 - The Net  Reinsurance  Coverage  Limit  Premium  for Layer 2 shall
     equal  XX% (X  percent)  of  Subject  Ultimate  Net Loss  ceded to Layer 2,
     subject to a maximum Net  Reinsurance  Coverage  Limit  Premium for Layer 2
     equal to $XXX.XXX million.

     Layer 3 - The Net  Reinsurance  Coverage  Limit  Premium  for Layer 3 shall
     equal  XX% (X  percent)  of  Subject  Ultimate  Net Loss  ceded to Layer 3,
     subject to a maximum Net  Reinsurance  Coverage  Limit  Premium for Layer 3
     equal to $XXX.XXX million.

     Layer 4 - The Net  Reinsurance  Coverage  Limit  Premium  for Layer 4 shall
     equal  XX% (X  percent)  of  Subject  Ultimate  Net Loss  ceded to Layer 4,
     subject to a maximum Net  Reinsurance  Coverage  Limit  Premium for Layer 4
     equal to $XXX.XXX million.

     Layer 5 -The Net Reinsurance Coverage Limit Premium for Layer 5 shall equal
     XX.XX% (X point X percent) of Subject  Ultimate  Net Loss ceded to Layer 5,
     subject to a maximum Net  Reinsurance  Coverage  Limit  Premium for Layer 5
     equal to X.XXX% (X point X percent)  of  Subject  Net  Earned  Premium,  if

                                       12

<PAGE>

     combined  Non-Terrorism/Non-Terrorist  Activity,  Property Catastrophe Loss
     and Workers'  Compensation  Catastrophe  Loss combined Subject Ultimate Net
     Loss is less than or equal to $XXX  million in excess of the  Company  Plan
     Shock Loss Ultimate Net Loss. If greater than $XXX million in excess of the
     Company  Plan Shock Loss  Ultimate  Net Loss,  the maximum Net  Reinsurance
     Coverage  Limit  Premium  for  Layer 5 shall be equal to  X.XXX% (X point X
     percent) of Subject Net Earned Premium.

     Within 60 (sixty) days from the end of each calendar  quarter,  the Company
     shall  calculate and pay to the Reinsurers Net  Reinsurance  Coverage Limit
     Premiums,  along with  interest  from  January 1, 2002  through the date of
     payment at an effective  annual  interest rate of X.X% (X point X percent),
     to the Reinsurers.

B.   Net  Premiums in  Respect of  Shock  Loss  Ultimate  Net Loss - The Company
     shall pay to the  Reinsurers,  along  with  interest  from  January 1, 2002
     through the date of payment at an effective  annual rate of X.X% (X point X
     percent),  reinsurance  premiums in respect of Shock Loss Ultimate Net Loss
     ("Net  Premiums in Respect of Shock Loss  Ultimate  Net Loss") equal to the
     sum of the  results of  applying  the rates in Column B below  against  the
     actual amounts, per table values in Column A below. Net Premiums in respect
     of Shock Loss Ultimate Net Loss are in addition to Net Reinsurance Coverage
     Limit Premiums and do not alter the Aggregate Limit hereon:

<TABLE>
<CAPTION>


         Column A                                              Column B
---------------------------     -------------------------------------------------------------------------
         In Millions
       For Shock Loss
    Excess of Company Plan                             For Overall Subject Ultimate Net Loss
       Shock Loss UNL                                   in excess of the Aggregate Retention
Shock                                                       in the Following Amounts
 Loss             Up to and
Layers   From     Including     $x.xxxM   $xxx.xxxM   $xxx.xxxM   $x,xxx.xxxM   $x,xxx.xxxM   $x,xxx.xxxM
---------------------------     -------------------------------------------------------------------------

<S>         <C>         <C>        <C>       <C>          <C>            <C>         <C>            <C>
  1    $XXX.XXX    $XXX.XXX       X.X%      X.X%         X.X%           X.X%        X.X%           X.X%
  2    $XXX.XXX    $XXX.XXX       X.X%      X.X%         X.X%           X.X%        X.X%           X.X%
  3    $XXX.XXX    $XXX.XXX       X.X%      X.X%         X.X%           X.X%        X.X%           X.X%

</TABLE>


If the Column B Subject Ultimate Net Loss amounts are between column values, the
percentages  in the table  above  shall be  pro-rated  based  upon the amount of
Subject  Ultimate Net Loss as it pertains to the lower and higher column values.
[For example,  if Column B Subject  Ultimate Net Loss is $XXX.XXX  million,  the
rates  would  be  X.XX%  (X  point X  percent)  for  Layer 1 and X.X% (X point X
percent) for Layer 2.]

All  Subject  Ultimate  Net Loss of GE - Frankona  as a result of whole  account
affiliate coverages with GEF - London and GEF - Copenhagen shall be deemed Shock
Loss Ultimate Net Loss for purposes of the calculations above.

Notwithstanding the above, if the combined Non-Terrorism/Non-Terrorist Activity,
Property  Catastrophe  Loss and Workers'  Compensation  Catastrophe Loss Subject
Ultimate  Net Loss is greater  than $XXX  million in excess of the Company  Plan
Shock Loss Ultimate Net Loss, the Net Premiums in Respect of Shock Loss Ultimate
Net Loss shall be X (X dollars).

                                       13

<PAGE>


The Company shall determine and pay to the Reinsurers Net Premiums in Respect of
Shock Loss  Ultimate Net Loss,  along with interest from January 1, 2002 through
the date of  payment at an  effective  annual  interest  rate of X.X% (X point X
percent), 60 (sixty) days in arrears of each calendar quarter.


                                   ARTICLE 14
                                   ----------

                               REINSURERS' MARGIN
                               ------------------

A.   Initial   Reinsurers'  Margin  -  The  Reinsurers  shall  be  entitled   to
     Reinsurers'  Margin equal to X.XX% (X point X percent) of Aggregate  Limit,
     subject to a minimum Reinsurers' Margin of $XX.X million.

     However,  should this Agreement be commuted on or before December 31, 2002,
     then the  Reinsurers  shall  return to the  Company  XX% (X percent) of the
     Initial  Reinsurers'  Margin by January 5, 2003.  Should this  Agreement be
     commuted on or before December 31, 2003,  then the Reinsurers  shall return
     to the Company XX% (X percent) of Initial  Reinsurers' Margin by January 5,
     2004.

B.   Additional  Reinsurers'  Margin  -  The  Reinsurers  shall  be  entitled to
     Additional  Reinsurers' Margin equal to the sum of applying the rates below
     against Net Reinsurance Coverage Limit Premiums in the table column:

                Net Reinsurance Coverage
                   Limit Premiums Due                            Additional
                     In respect of:                         Reinsurers' Margin %
           ----------------------------------               --------------------
           1.  XX% of Ceded UNL to Layer 1                          X.XX%
           2.  XX% of Ceded UNL to Layer 2                          X.XX%
           3.  XX% of Ceded UNL to Layer 3                          X.XX%

Such Additional  Reinsurers' Margin shall be calculated by the Company quarterly
60 (sixty)  days in arrears of each  calendar  quarter  end and paid 90 (ninety)
days in arrears of each calendar quarter end.

If ceded  Ultimate Net Loss is  subsequently  reduced  from the prior  quarterly
reporting,  the  Reinsurers  shall  retain  Reinsurers'  Margin  received,  with
interest, based upon the higher ceded Ultimate Net Loss previously ceded.

The Company  shall pay  Additional  Reinsurers'  Margin due, if any,  along with
interest at an effective  annual  interest rate of X.X% (X point X percent) from
January 1, 2002 through the date of payment.

There shall be no Reinsurers' Margin due in respect of Net Reinsurance  Coverage
Limit Premiums for Layers 4 and 5.

The Reinsurers  shall allow the  Reinsurers'  Margin to be deducted from the Net
Reinsurance Coverage Limit Premiums paid by the Company.

                                       14
<PAGE>



                                   ARTICLE 15
                                   ----------

                                CEDING COMMISSION
                                -----------------

The  Reinsurers  shall  allow  the  Company  a ceding  commission  (the  "Ceding
Commission")  equal to XX% (X percent) of Gross Reinsurance  Premiums  including
XX% (X percent) of associated  interest from January 1, 2002 through the date of
payment at an effective annual interest rate of X.X% (X point X percent). In the
event Net  Reinsurance  Premiums  are not  grossed  up by XX% (X  percent),  the
Reinsurers shall not allow the Company a Ceding Commission.

In the  event a Ceding  Commission  is  allowed,  the  Company  shall  allow the
Reinsurers  return  commission  on  return  premiums  at the same rate of XX% (X
percent).

Ceding Commission shall be deducted from such Gross Reinsurance  Premiums at the
time  Gross  Reinsurance  Premiums  are  paid  and the  balance  of  such  Gross
Reinsurance Premiums shall be remitted to the Reinsurers.


                                   ARTICLE 16
                                   ----------

                                    CURRENCY
                                    --------

Whenever  the word  "Dollars"  or the sign "$" appears in this  Agreement,  they
shall be construed to mean United States Dollars and all transactions under this
Agreement shall be in United States Dollars.

Amounts paid or received by the Company in any other currency shall be converted
to  United  States  Dollars  at the  actual  rate of  exchange  on the date such
transaction is entered into the books of the Company.



                                   ARTICLE 17
                                   ----------

                                      TAXES
                                      -----

A.   In  consideration  of  the terms under which this Agreement is issued,  the
     Company  undertakes  not to claim any deduction of the premium  hereon when
     making  Canadian tax returns or when making tax returns,  other than income
     or profit tax returns,  to any state or  territory of the United  States of
     America or to the District of Columbia.

                                       15
<PAGE>



B.   The  Company  shall be  responsible  for  any  and all Federal  Excise Tax,
     premium taxes and all other similar taxes wherever  imposed  arising out of
     this Agreement (the  "Company's  Taxes").  The Company's Taxes shall not be
     considered premium or impact the Notional Profit Sharing Account hereon. In
     the event the  Reinsurers  are, for any reason,  required to pay any of the
     Company's Taxes, the Company shall immediately indemnify the Reinsurers for
     any such taxes paid by the Reinsurers.


                                   ARTICLE 18
                                   ----------

                         REPORTS AND PREMIUM SETTLEMENTS
                         -------------------------------

1.   Quarterly  Reports - Starting  with  the  calendar  quarter ending December
     31,  2002,  within  60  (sixty)  days  following  the end of each  calendar
     quarter,  the Company shall report to the  Reinsurers  the actual amount of
     the following  items.  Reports shall continue until final settlement of all
     losses or Commutation, in accordance with Article 25.

     A.  Ultimate Net Loss and Subject Net Earned Premium

         1. Ultimate Net Loss for the Company and each Affiliated Company

         2. Paid and Incurred Subject Ultimate Net Loss for the Company and each
            Affiliated Company

         3. Paid and  Incurred  Non-Shock Loss Ultimate Net Loss for the Company
            and each Affiliated Company

         4. Paid and Incurred Shock Loss Ultimate  Net  Loss for the Company and
            each Affiliated Company

         5. Net Earned Premium for the Company and each Affiliated Company

         6. Subject Net Earned Premium for the Company

     B.  Reinsurance Premiums

         1. Net Reinsurance Coverage Limit Premiums

         2. Net Premiums in Respect of Shock Loss Ultimate Net Loss

         3. Ceding Commission

         4. Initial Reinsurers' Margin

         5. Additional Reinsurers' Margin

2.   Premium  Settlements  - Within  60  (sixty)  days  from  the  end  of  each
     calendar  quarter,  the Company shall  calculate and pay to the  Reinsurers

                                       16
<PAGE>

     Gross  Reinsurance  Premiums,  along  with  interest  from  January 1, 2002
     through the date of payment at an effective annual interest rate of X.X% (X
     point X percent), to the Reinsurers, in accordance with Articles 13 and 21.

3.   Annual   Reports  -  Starting   with   December  31,  2002   and   annually
     thereafter,  within 60 (sixty) days from the end of each calendar year, the
     Company  shall report to the  Reinsurer  the actual amount of the following
     items.  Reports  shall  continue  until final  settlement  of all losses or
     Commutation, in accordance with Article 25.

      A.  All information as required in the Quarterly Reports section above.

      B.  Aggregate  paid, case  reserves and  incurred but not reported amounts
          of Ultimate  Net Loss for the Company and each  Affiliated  Company by
          the lines of business detail provided in the  underwriting  submission
          to the Reinsurers.


                                   ARTICLE 19
                                   ----------

                          ULTIMATE NET LOSS SETTLEMENTS
                          -----------------------------

Settlement of Ultimate Net Loss paid in excess of the Aggregate  Retention shall
be made by the  Reinsurers to the Company  quarterly  within 30 (thirty) days of
receipt of the report by the Reinsurers or 90 (ninety) days after the end of the
quarter,  whichever  occurs  later.  Settlement  shall  be made  first  from the
Security  Trust  Accounts (A) Section 1 until such time as the  Notional  Profit
Sharing  Account is fully  depleted  after  which  amounts  shall be paid by the
Reinsurers to the Company out of other funds of the  Reinsurers.  The Reinsurers
shall make all required  settlements  of Ultimate  Net Loss from these  Security
Trust  Accounts (A) Section 1 up until the Notional  Profit  Sharing  Account is
fully depleted,  in accordance with Article 20. When the Notional Profit Sharing
Account becomes fully depleted,  the Reinsurers must pay all remaining  Ultimate
Net Loss liability, when due, from one or more of the following:

      1. Security Trust Accounts (A) Section 2; and/or
      2. Letter of Credit draw-downs; and/or
      3. Other funds of the Reinsurers.

Such payments by the Reinsurers shall be made regardless of whether or not there
is a positive balance in the Security Trust Accounts (A) Section 1.

The Reinsurers' liability for Ultimate Net Loss shall be subject to the Coverage
Layer  Limits,  Aggregate  Limit,  Co-Participation  and  other  terms  of  this
Agreement.

All  Ultimate  Net Loss  Settlements  made by the  Company on Subject  Business,
whether under policy terms and conditions or by way of  compromise,  shall be in
the sole discretion of the Company and shall be  unconditionally  binding on the

                                       17
<PAGE>

Reinsurers.  Upon  satisfactory  proof of loss, the  Reinsurers  shall pay their
share of each such settlement in accordance with this Agreement.

In the event of a material  commutation or lump sum or structured  settlement of
any  agreement  by the Company  which  results in the  payment of ceded  Subject
Ultimate Net Loss prior to the time required had such  commutation or settlement
not occurred,  then the Subject Ultimate Net Loss, Aggregate Retention and ceded
Subject Ultimate Net Loss shall be determined as if such event had not occurred.

For purposes of this  provision,  any one  commutation or lump sum or structured
settlement  event or  aggregate  of these  events  which  accumulate  to  actual
payments totaling $XX.X million or greater shall be deemed to be material.

The analysis to determine the Subject  Ultimate Net Loss,  Aggregate  Retention,
ceded  Subject  Ultimate Net Loss and payout  pattern  which would have occurred
will be calculated by the Company and be subject to the  Reinsurers'  agreement.
If the  Reinsurers  do not  agree  with  the  Company's  calculations,  then the
analysis will be performed by an  independent  actuarial  firm which is mutually
acceptable  to both  parties.  The parties  will  equally bear the costs of such
analysis and the results of such analysis  shall be binding in  determining  the
Subject Ultimate Net Loss, Aggregate Retention,  ceded Subject Ultimate Net Loss
and payout pattern.

The Company  must cede  Ultimate Net Loss as reported in the  Company's  audited
financial statements unless otherwise agreed by the Company and the Reinsurers.


                                   ARTICLE 20
                                   ----------

                         NOTIONAL PROFIT SHARING ACCOUNT
                AND CONTINGENT TRANSFER OF ADDITIONAL COLLATERAL
                ------------------------------------------------

A.   Notional  Profit  Sharing  Account - The  Reinsurers   shall   maintain   a
     Notional  Profit  Sharing  Account  comprised  of the sum of the  following
     cumulative amounts:

       1) Gross  Reinsurance  Premiums  paid  to  the  Reinsurers,  along   with
          interest  at an  effective  annual  interest  rate of X.X% (X  point X
          percent)  from  January  1,  2002  up to the  date of  payment  to the
          Reinsurers; less

       2) Initial and  Additional  Reinsurers' Margin,  along  with  interest at
          an effective annual interest rate of X.X% (X point X percent); less

       3) Ceded  Subject  Ultimate Net Loss  when  paid by the Reinsurers to the
          Company; less

       4) Ceding  Commissions  paid by the  Reinsurers  to  the  Company  at the
          same time the corresponding  Net Reinsurance  Premiums are paid to the
          Reinsurers; less

                                       18
<PAGE>


       5) Any Commutation settlement, per Article 25; plus

       6.) Additional Consideration.

     Beginning  with  the  calendar   quarter  ending  December  31,  2002,  the
     Reinsurers  shall  calculate and report the balance of the Notional  Profit
     Sharing  Account to the Company within 60 (sixty) days from the end of each
     calendar quarter.

B.   Contingent  Transfer  of  Additional  Collateral  -  In   the  event  of  a
     Triggering  Event, as defined below,  and at the Reinsurers'  request to do
     so, the Company shall either  provide a Letter of Credit or transfer to the
     Reinsurers to place into Security Trust Accounts (A) Section 1, the present
     value  (based  upon  the  current  investment  yield of the  assets  within
     Security Trust Accounts (A) Section 1) of the estimated  difference between
     the expected total future  Additional  Consideration in the Notional Profit
     Sharing  Account based on a X% (X percent)  annual  effective  rate and the
     expected  future  income  based upon the yield on the  qualifying  security
     investments  in the  Security  Trust  Accounts  (A)  Section  1  within  15
     (fifteen)  business  days  from  the  date  of a  Triggering  Event  into a
     Regulation 114 complaint  Trust  Account.  The Company or the Reinsurer may
     request that the above calculations be performed  quarterly and that excess
     collateral is returned to the Company from the Security  Trust Accounts (A)
     Section 1 or that Additional  Collateral required is paid by the Company to
     the Reinsurers to place into Security Trust Accounts (A) Section 1.

     A Triggering Event shall include any of the following:

       1. A  downgrade  by  Standard  & Poor's  to  an "A-" or  below for any of
          ERC, GE Re and GE Frankona; or

       2. A loss  of  Combined  GAAP  Equity  (approximately  $X.X  billion)  in
          excess of X% (X  percent)  in total for the  Combined  Companies  from
          December 31, 2001.

       3. A  downgrade  by  A.M.  Best to an "A-" or  below for any of Employers
          Reinsurance Corporation, GE Reinsurance Corporation or GE Frankona.

If the Company and the Reinsurers  cannot  mutually  agree to the  modifications
required above in paragraph B., the parties shall appoint the  Intermediary or a
third party actuary  mutually  acceptable  to determine the required  collateral
which shall be binding upon the Company and the  Reinsurers.  Both parties shall
equally share the cost of such third party actuary or Intermediary.


                                       19
<PAGE>

                                   ARTICLE 21
                                   ----------

                            ADDITIONAL CONSIDERATION
                            ------------------------

At the end of each calendar quarter, the Notional Profit Sharing Account will be
credited with  Additional  Consideration  determined by multiplying  the average
daily balance of the Notional Profit Sharing Account during the calendar quarter
by X.XXX% (X point X percent) to achieve an  effective  X.X% (X point X percent)
annual yield.

Additional  Consideration  shall  continue  even in the  event of the  Company's
rehabilitation,  liquidation,  conservation,  insolvency,  or any combination of
these events.


                                   ARTICLE 22
                                   ----------

                    LOSS IN EXCESS OF ORIGINAL POLICY LIMITS
                    ----------------------------------------

A.   This  Agreement shall  protect  the Company,  within the limits hereof, for
     XXX% (X percent) of loss in excess of the limit of its original  agreements
     of any type included in Subject Business,  such loss in excess of the limit
     having been  incurred  because of failure by it to settle within the limits
     of such original  agreements  by reason of alleged or actual  negligence or
     bad faith in rejecting an offer of settlement or in the  preparation of the
     defense or in the trial of any action  against its insured or  reinsured or
     in the preparation or prosecution of an appeal consequent upon such action.
     However,  this Article shall not apply where the loss has been incurred due
     to fraud by a member of the board of  directors  or a corporate  officer of
     the Company acting  individually  or  collectively or in collusion with any
     individual or  corporation or any other  organization  or party involved in
     the presentation, defense, or settlement of any claim covered hereunder.

     For the  purposes of this  Article,  the word "loss" shall mean any amounts
     for which the Company  would have been  contractually  liable to pay had it
     not been for the limit of the original  agreement of whatever type included
     in Subject Business.

B.   This  Agreement  shall  protect  the  Company  for XXX% (X percent) of  its
     share  of loss in  excess  of the  limits  emanating  from  the  underlying
     policies or contracts attaching to the Company's  facultative  certificates
     or treaty  reinsurance  agreements or from policies or binders of insurance
     ("Loss in Excess of Policy Limits"),  subject to the terms, conditions, and
     limitations of this Agreement.


                                   ARTICLE 23
                                   ----------

                          EXTRA CONTRACTUAL OBLIGATIONS
                          -----------------------------

A.   This  Agreement  shall  protect the Company,  within the limits hereof, for
     XXX% (X  percent)  of any Extra  Contractual  Obligations.  The term "Extra

                                       20
<PAGE>

     Contractual  Obligations" is defined as those liabilities not covered under
     any  other  provision  of the  Company's  original  agreements  of any type
     included in Subject Business and which arise from the handling of any claim
     on Subject Business covered hereunder, such liabilities arising because of,
     but not limited to, the following:  failure by the Company to settle within
     the limit of any such agreement included in Subject Business,  or by reason
     of  alleged  or actual  negligence  or bad faith in  rejecting  an offer of
     settlement  or in the  preparation  of the  defense  or in the trial of any
     action  against  its  insured  or  reinsured  or  in  the   preparation  or
     prosecution of an appeal consequent upon such action.

     The date on which any  Extra  Contractual  Obligation  is  incurred  by the
     Company  shall  be  deemed,  in all  circumstances,  to be the  date of the
     original loss event.

     However,  this Article shall not apply where the loss has been incurred due
     to fraud by a member of the board of  directors  or a corporate  officer of
     the Company acting  individually  or  collectively or in collusion with any
     individual or  corporation or any other  organization  or party involved in
     the presentation, defense or settlement of any claim covered hereunder.

B.   This  Agreement  shall  protect  the  Company for  XXX% (X percent) of  its
     share of  Extra  Contractual  Obligations  emanating  from  the  underlying
     policies or contracts attaching to the Company's  facultative  certificates
     or treaty reinsurance  agreements or from policies or binders of insurance,
     subject to the terms, conditions, and limitations of this Agreement.


                                   ARTICLE 24
                                   ----------

                                     OFFSET
                                     ------

The Company or the  Reinsurers  may offset any balance or balances  due from one
party to another under the terms of this Agreement  only.  Balances due include,
but are not limited to, Net Reinsurance Coverage Limit Premiums, Net Premiums in
Respect of Shock Loss Ultimate Net Loss,  including  interest on such amounts as
specified in the relevant clauses, Ceding Commissions, Additional Consideration,
ceded portion of Subject  Ultimate Net Losses paid, or otherwise any amounts due
from one party to the other party hereto under the terms of this Agreement. This
provision  shall not be  affected  by the  insolvency  of  either  party to this
Agreement.


                                   ARTICLE 25
                                   ----------

                                   COMMUTATION
                                   -----------

A.   The  Company  may  elect to fully  commute  this  Agreement at any calendar
     quarter end after the  expiration of the Term of this  Agreement.  Upon the
     Company's election to commute,  the Reinsurers shall release to the Company
     any residual  amounts  remaining in the Security Trust Accounts (A) Section
     1, in addition to Profit  Sharing,  and the  Reinsurers  shall withdraw any
     residual  amounts  remaining  in Security  Trust  Account (A) Section 2. In
     addition,  the Company shall return any and all original  Letters of Credit
     to the Reinsurers, if applicable.

                                       21
<PAGE>


B.   Notwithstanding  the  above, the  Reinsurers may elect Commutation 1) after
     December 31, 2016,  providing that the residual  outstanding ceded Ultimate
     Net Loss is no greater than $XX.X million more than the residual balance of
     the  Notional  Profit  Sharing  Account  or 2) for any  reason  on or after
     December 31, 2026. Upon the election of Commutation by the Reinsurers,  the
     Reinsurers shall pay an amount equal to the greater of:

       1. The residual balance of the Notional Profit Sharing Account; or

       2. The  present  value   of   ceded  Ultimate   Net   Loss   outstanding,
          calculated  at a X%  (X  percent)  annual  discount  rate  and  to  be
          determined by mutual agreement, or if unable to reach an agreement, by
          a mutually  agreed  upon  third-party  actuary  with at least 10 (ten)
          years'  experience  in  the  international  insurance  or  reinsurance
          business  as a  person  engaged  in such  business  or  advising  such
          business in a professional capacity.

     The Reinsurers shall release to the Company any residual amounts  remaining
     in the  Security  Trust  Accounts  (A) Section 1 and the  Reinsurers  shall
     withdraw any residual  amounts  remaining  in Security  Trust  Accounts (A)
     Section 2. In  addition,  the  Company  shall  return any and all  original
     Letters of Credit to the Reinsurers, if applicable.

Upon  election  of  Commutation  and the  Reinsurers'  payment  to the  Company,
together  with any Profit  Sharing,  the  Reinsurers  shall be released from all
current and future liability under this Agreement.


                                   ARTICLE 26
                                   ----------

                                 PROFIT SHARING
                                 --------------

The Reinsurers shall pay to the Company, by debit to the Notional Profit Sharing
Account, XXX% (X percent) of the residual balance, if any, of the Notional
Profit Sharing Account upon final payment of ceded Subject Ultimate Net Loss
and/or payment of amounts as calculated under the Commutation article. Payment
of Profit Sharing shall constitute a full and final settlement of any liability
under this Agreement and the Reinsurers shall be released from all current and
future liability under this Agreement.


                                   ARTICLE 27
                                   ----------

                       CHANGE IN ADMINISTRATIVE PRACTICES
                       ----------------------------------

The Company agrees not to materially change its claims handling  procedures,  or
procedures  for  payment  of claims,  in any  manner  from that in effect at the

                                       22
<PAGE>

inception of this Agreement, such changes which materially affect this Agreement
or the obligations of the parties hereunder, unless the Company has received the
prior  written  approval  of the  Reinsurers  to such  changes  pursuant  to the
provisions of this Article, such approval not to be unreasonably withheld.

In the event the Company changes its claims handling  procedures,  or procedures
for payment of claims,  the Company  shall notify the  Reinsurers  in writing of
such changes and give the Reinsurers the  opportunity to review such changes and
determine whether any revisions are required to this Agreement. In the event the
Reinsurers determine that this Agreement needs to be revised and the Company and
the  Reinsurers  fail to agree on acceptable  changes  within 60 (sixty) days of
such  determination,  an independent  actuarial firm shall be hired to determine
the impact of such changes and required  revisions to this Agreement to maintain
the economics had such changes not occurred.

Furthermore,  in the event of an  administrative  or claims handling practice of
any insurance  contract or other  arrangement by the Company with one or more of
its  insureds or  reinsureds  which will have the effect,  in the opinion of the
Reinsurers, of a material change in the anticipated settlement pattern of losses
hereunder,  then for purposes of settlement  hereunder,  losses  related to such
policies  shall be  reported  as  though  such  change  or  arrangement  had not
occurred.  Such determination shall be made with the concurrence of both parties
hereto,  subject to an  independent  actuarial  analysis if agreement  cannot be
reached. The cost of any such actuarial work, as hereinabove  specified shall be
shared equally by both parties.


                                   ARTICLE 28
                                   ----------

                              ERRORS AND OMISSIONS
                              --------------------

Any  inadvertent  delay,  omission or error shall not be held to relieve  either
party  hereto from any  liability  which would  attach to it  hereunder  if such
delay,  omission or error had not been made,  providing such delay,  omission or
error is rectified promptly upon discovery.


                                   ARTICLE 29
                                   ----------

                                ACCESS TO RECORDS
                                -----------------

The Company  shall place at the  disposal of the  Reinsurers  at all  reasonable
times,  and the  Reinsurers  shall  have the  right to  inspect,  through  their
authorized  representatives,  all books,  records,  and papers of the Company in
connection with any reinsurance hereunder, or claims in connection herewith.

                                       23
<PAGE>


                                   ARTICLE 30
                                   ----------

                                   INSOLVENCY
                                   ----------


The Company and the Reinsurers agree that, in the event of the insolvency of the
Company,  as to all  reinsurance  made,  ceded,  renewed or  otherwise  becoming
effective after the effective date of this Agreement,  such reinsurance shall be
payable by the Reinsurers on the basis of the amount of liability of the Company
under the  contract or contracts  reinsured  without  diminution  because of the
insolvency of the Company;  furthermore, that such amount shall be paid directly
to the Company or its liquidator,  receiver or other statutory successor.  It is
furthermore  agreed that, in the determination of the amount of the liability of
the  Reinsurers  in the  liquidation  or  receivership  proceeding,  no judgment
against  an  insured  taken  after the date of the entry of the  liquidation  or
receivership  order shall be  considered  as evidence  of  liability,  or of the
amount of damages and no judgment  against an insured taken by default,  inquest
or collusion, prior to the entry of such order shall be considered as conclusive
evidence, either of the liability of such insured to such person upon such cause
of action or of the amount of damages to which such person is therein entitled.

It is understood and agreed, however, that the obligations of the Company as set
forth in this  Agreement,  including,  among  others,  the duty to  investigate,
settle and  defend  all claims  arising  under  policies  with  respect to which
reinsurance  is  afforded  by  this  Agreement,   shall  remain  unimpaired  and
unaffected  by the  insolvency  of the  Company  and  shall  be  assumed  by the
liquidator, receiver or statutory successor of the Company in the liquidation or
receivership  proceeding  and  that  such  liquidator,   receiver  or  statutory
successor shall give written notice to the Reinsurers of the pendency of a claim
against the Company on the policy or bond  reinsured  within a  reasonable  time
after  such  claim is filed in the  insolvency  proceeding  and that  during the
pendency of such claim the Reinsurers may investigate  such claim and interpose,
at their own expense,  in the proceeding  where such claim is to be adjudicated,
any  defense  or  defenses  which  it may deem  available  to the  Company,  its
liquidator,  receiver or statutory  successor.  The expense thus incurred by the
Reinsurers shall be chargeable, subject to court approval, against the insolvent
Company as part of the expense of liquidation  to the extent of a  proportionate
share of the benefit which may accrue to the Company solely as the result of the
defense undertaken or asserted by the Reinsurers.

Where two or more  Reinsurers  are  involved in the same claim and a majority in
interest  elect to  interpose  a defense to such  claim,  the  expense  shall be
apportioned  in  accordance  with the terms of this  Agreement  as  though  such
expense had been incurred by the Company.

Nothing hereinabove set forth in this Insolvency Article shall in anywise change
the  relationship or status of the parties  hereto,  to wit, that of Company and
Reinsurers, nor enlarge the obligations of either party to each other, except as
specifically hereinabove provided, to wit, to pay the statutory successor on the
basis of the amount of liability of the Company  under the contract or contracts
reinsured,  rather  than on the basis of the actual  amount of loss  (dividends)
paid by the liquidator,  receiver or statutory  successor to allowed  claimants,
nor,  except  as  hereinabove  specifically  provided,  shall  anything  in this
Insolvency  Article in any manner create any obligations or establish any rights
against the  Reinsurers in favor of any third parties or any persons not parties
to this Agreement.

                                       24
<PAGE>

                                   ARTICLE 31
                                   ----------

                                   ARBITRATION
                                   -----------

A.   All  disputes  between  the  parties  arising out of or in connection  with
     this agreement, including formation and validity and whether arising during
     or after the period of this agreement,  shall be referred to an arbitration
     tribunal (the tribunal) in the manner set out below.

B.   The  tribunal  shall,  unless  the  parties  agree  otherwise,  consist  of
     persons  (including  those  who have  retired)  with not less than 10 (ten)
     years'  experience of  international  insurance or reinsurance  business as
     persons   engaged  in  such   business  or  advising  such  business  in  a
     professional capacity.

C.   Unless  the  parties  agree  upon  a single  arbitrator  within 30 (thirty)
     days of one receiving a written request from the other for arbitration, the
     claimant (the party  requesting  arbitration)  shall appoint its arbitrator
     (the first  arbitrator)  and shall give written notice thereof to the other
     party (the  respondent).  Within 30 (thirty) days of receiving such notice,
     the respondent  shall appoint its arbitrator  (the second  arbitrator)  and
     give written notice to the claimant failing which the claimant may apply to
     the appointor named below to appoint the second arbitrator.

D.   Once  appointed  the first and second  arbitrators shall within 30 (thirty)
     days  of  the  appointment  of  the  second  arbitrator   appoint  a  third
     arbitrator. Should they fail to do so then either of them or of the parties
     may apply to the appointor  for the  appointment  of the third  arbitrator.
     However appointed, the third arbitrator shall be chairman.

C.   Upon  acceptance  of the  appointment by the third  arbitrator the tribunal
     shall be constituted. The three arbitrators shall decide by majority.

F.   If  an  arbitrator, subsequent  to their appointment is unwilling or unable
     to  act,  a new  arbitrator  shall  be  appointed  to  replace  them by the
     procedure set out in this Article.

G.   Unless  otherwise extended  or ordered  by the tribunal within 15 (fifteen)
     days of the  appointment of the third  arbitrator,  each party shall submit
     its case to the tribunal  within 45 (forty five) days of the appointment of
     the third arbitrator.

H.   The  tribunal  shall  not  be bound by the formal  rules of  evidence.  The
     tribunal  shall  have power to fix all  procedural  rules  relating  to the
     conduct of the arbitration.

I.   The tribunal  shall reach  its  decision by  reference to the governing law
     specified in Article 33 below.

                                       25
<PAGE>

J.   The  tribunal  shall not be empowered to award  any  punitive or  exemplary
     damages.

K.   The  tribunal  shall  within 60 (sixty) days  of  reaching its  decision of
     the arbitration  issue to the parties its written and reasoned  award.  The
     award shall be final and  binding on the parties who  covenant to carry out
     the same.  If either of the parties  should fail to carry out the award the
     other may apply for its enforcement to a court of competent jurisdiction in
     any territory in which the party in default are domiciled or have assets or
     carries on business.

L.   All costs  of  the  arbitration  shall be at the discretion of the tribunal
     who may direct to and by whom and in what manner they shall be paid.

M.   The  seat  of  the arbitration shall be in Missouri unless some other place
     is mutually agreed upon by the Company and Reinsurers.

N.   This  article  shall  be construed as a separate and  independent  contract
     between the parties hereto.


                                   ARTICLE 32
                                   ----------

                                    SECURITY
                                    --------

It is agreed that when the Company files with the regulatory  authorities  under
the  jurisdictions  of which it falls or  establishes  reserves for Ultimate Net
Loss  recoverables  hereunder,  as required by law, the Company shall forward to
the  Reinsurers a statement  showing the  proportion  of such  Ultimate Net Loss
recoverables which are applicable to the Reinsurers.

The  Reinsurers  hereby  agree to provide  Total  Funding,  as  requested by the
Company, to allow the Company to take regulatory credit in all jurisdictions.

The  Reinsurers  shall provide  Total  Funding in the form of separate  Security
Trust Accounts (A) Section 1 for each Company  member,  in accordance with state
regulations.  The Reinsurers shall  contribute all Reinsurance  Premium received
less  Reinsurers'  Margin  in  such  Security  Trust  Accounts  (A)  Section  1.
Investments  shall be made as specified in the Trust Agreements to be agreed and
as required under applicable local law (to be "qualifying securities").

The  Reinsurers  shall  select and direct an  investment  manager to oversee the
investments  in respect of Security  Trust  Accounts  (A) Section 2. The Company
shall select and direct an investment  manager,  which may be affiliated with or
part of the Company,  to oversee the  investments  in respect of Security  Trust
Accounts (A) Section 1, and the Trustee bank elected per the Company. Should the
Company so request to satisfy  regulatory  requirements,  the  Reinsurers  shall
redirect  qualifying  securities  to each of the  Security  Trust  Accounts  (A)
Section  1,  by  individual  Company  member,  as  directed  by  the  designated
representative  of  the  Company.   Any  amounts  needed  above  this  level  to
collateralize  up to the  Total  Funding  shall be  funded,  at the  Reinsurers'
option,  via either additional  qualifying  securities in Security Trust Account
(A)  Section 2, or a clean,  irrevocable,  acceptable  Letter of Credit,  or any
other qualifying security accepted in the relevant jurisdiction.

                                       26

<PAGE>

The Security  Trust  Accounts (A) Section 1 shall  ultimately  possess,  for all
Company  members  in total,  a minimum  of  assets to equal the  balance  of the
Notional Profit Sharing Account.  The Security Trust Accounts (A) Section 1 may,
on an  interim  (quarterly)  basis,  have more or less  assets  for all  Company
members  in total  than the  Notional  Profit  Sharing  Account  balance at each
respective  quarter end. If the Security Trust Accounts (A) Section 1 has excess
assets for all Company  members in total,  the Company has the right to withdraw
such excess  assets at any time as these assets are the property of the Company.
If the  Security  Trust  Accounts  (A) Section 1 has less assets for all Company
members in total than the Notional Profit Sharing Account balance at any quarter
end, the Company shall  contribute  Extra  Reinsurance  Premiums to the Security
Trust  Accounts (A) Section 1 so that the resulting  Security Trust Accounts (A)
Section 1 shall equal the balance of the Notional Profit Sharing Account.

In the event that the Security Trust Accounts (A) Section 1 become  depleted for
all  Company  members  in total  and the  Notional  Profit  Sharing  Account  is
positive,  the Company shall contribute Extra Reinsurance  Premiums  (qualifying
securities)  to the Reinsurers to add to the Security Trust Accounts (A) Section
1 to match the Notional  Profit  Sharing  Account.  Such  additional  qualifying
securities  contributions  shall be considered  Extra  Reinsurance  Premiums and
shall be added to the  Security  Trust  Accounts  (A)  Section 1 at the time the
Reinsurers are obligated to make Ultimate Net Loss  Settlements  hereunder,  but
only if the Notional  Profit Sharing  Account is positive and the Security Trust
Accounts  (A)  Section  1 is  depleted.  The  Company  shall  continue  to  make
additional  qualifying  securities  contributions  to the  Reinsurers  until the
Notional Profit Sharing Account is fully depleted.

The Company  undertakes to use and apply any amounts realized on such qualifying
securities or which it may withdraw from any such Security  Trust Account and/or
which it may draw against any such Letter of Credit, if applicable,  pursuant to
the terms under which the Letter of Credit is held,  for the following  purposes
only:

      1)  to  reimburse  the Company  for the  Reinsurers'  liability under this
          Agreement  for any Ultimate Net Loss and Defense and Cost  Containment
          Expense paid by the Company but not recovered  from the  Reinsurers or
          for unearned premiums,  Ceding Commission or Profit Sharing due to the
          Company if not otherwise paid by the Reinsurers in accordance with the
          terms of this Agreement;

      2)  with  respect  to  a Security  Trust  Account only, to make payment to
          the  Reinsurer  of any amounts held in a Security  Trust  Account that
          exceed  XXX% (X  percent)  of the actual  amount  required to fund the
          Reinsurer's entire Obligations under this Agreement; or

      3)  with  respect  to  a  Letter of Credit  only,  where the  Company  has
          received  notification  of a  non-renewal  of the Letter of Credit and
          where the Reinsurer's  entire  Obligations under this Agreement remain
          unliquidated  and  undischarged 10 (ten) days prior to such expiration

                                       27
<PAGE>

          date, to obtain a cash deposit equal to such  Obligations  and deposit
          such  amounts in a separate  account in the name of the Company in any
          United States bank or trust company, apart from its general assets, in
          trust for such uses and purposes  specified in paragraph  (1) above of
          this  Agreement,  as may remain  executory  after  obtaining  the cash
          deposit and for any period after such expiration date.

      4)  With  respect to  a  Security  Trust Account  only,  where the Company
          has received  notification  of termination of a Security Trust Account
          and where  the  Reinsurers'  entire  Obligations  under the  Agreement
          remain  unliquidated  and  undischarged  10 (ten)  days  prior to such
          termination  date, to withdraw  amounts equal to such  Obligations and
          deposit  such  amounts  in a  separate  account,  in the  name  of the
          Company,  in any United States bank or trust  company,  apart from its
          general  assets,  in trust for such  uses and  purposes  specified  in
          paragraphs  1) and  2)  above  as  may  remain  executory  after  such
          withdrawal and for any period after such termination date.

          "Obligations",  whenever  used  in  this  Agreement,  shall  mean  the
          Reinsurers' share of the following:

           (a) Ultimate  Net Losses and  Defense and  Cost Containment  Expenses
               paid by the Company,  but not recovered from the Reinsurers;
           (b) reserves for Ultimate Net Losses reported and outstanding;
           (c) reserves for Ultimate Net Losses incurred but not reported;
           (d) reserves for Defense and Cost Containment Expenses;
           (e) reserves for  unearned  premiums;
           (f) Ceding Commission due from the Reinsurer to the Company; and
           (g) Profit Sharing due the Company.

All of the foregoing shall be applied without  diminution  because of insolvency
on the part of the Company or the Reinsurers.

Should  amounts be held pursuant to paragraphs 3) or 4) above,  then the Company
shall pay interest at the Prime Rate (as defined  below) on such funds as may be
held from time to time.

Should  any  amounts  (i)  drawn  down on a Letter of Credit be in excess of the
actual amounts required for paragraphs 1) and 3) above, or (ii) withdrawn from a
Security  Trust  Account  be in  excess  of  the  actual  amounts  required  for
paragraphs  1), 2) and 4) above,  then such excess  amounts shall be returned to
the Reinsurers forthwith and the Company shall pay interest at the Prime Rate on
such funds from the date they were drawn down or  withdrawn to the date they are
returned.

Prime  Rate:  The prime rate (the "Prime  Rate")  shall be  determined  for each
business day in New York City, and for  non-business  days shall equal the prime
rate as determined for the most recent preceding business day. The prime rate as
published  in The Wall Street  Journal  (Eastern  Edition)  shall be the primary

                                       28
<PAGE>

source for the Prime Rate.  If The Wall Street  Journal  does not publish such a
rate for a  business  day,  the Prime  Rate  shall be the  highest  of the rates
publicly  announced  by major banks in New York City with total assets in excess
of $XX billion that is applicable to such day.

Upon finalization of all liability of the Reinsurers hereon, the Reinsurers
shall release any residual amounts remaining in the Security Trust Accounts (A)
Section 1 to the Company, in addition to Profit Sharing and the Reinsurers shall
retain any residual amounts remaining in Security Trust Account (A) Section 2.
In addition, the Company shall return any and all original Letters of Credit to
the Reinsurers, if applicable.

The Company agrees to pay to the Reinsurers annually for:

     1.  Letters of Credit - XX (X) basis  points on the  Letter of Credit value
         issued at the preceding December 31; or

     2.  Security  Trust  Account  (A)  Section  2 - a fee equal to XX (X) basis
         points on the qualifying assets in Security Trust Account (A) Section 2
         that are contributed by the Reinsurers, in lieu of Letters of Credit.


                                   ARTICLE 33
                                   ----------

                                 MIX OF BUSINESS
                                 ---------------

The Company's  business  combined for ERC, GE Re and GE Frankona  shall be split
into  Short  Tail,  Medium  Tail,  and  Long  Tail  expected  premiums  and loss
categories  as per  Exhibit B  attached  hereto.  Should any  category's  actual
Subject Net Earned  Premium  decrease or increase by more than X% (X percent) of
its  respective  plan  Subject  Net Earned  Premium,  or should  any  category's
subclasses  (individual  row)  actual  Subject  Net Earned  Premium  increase or
decrease by more than XX% (X percent) of the  respective  line of business  plan
Subject Net Earned Premium within the "Short",  "Medium",  or "Long" categories,
then either  party may request  amendments  to this  Agreement  to maintain  the
economic position had such change in mix of business not occurred. The requested
change will be based solely on the premium  weights and plan loss ratios applied
to the  estimated  payment  patterns,  as  provided by the  Intermediary  in the
underwriting submission. No adjustment to rate on line shall occur due to actual
loss ratios or actual payment  patterns  differing from the plan loss ratios and
the estimated payment patterns.

Should the receiving  party  disagree  with the proposed  premium  changes,  the
receiving  party  may  require  an  independent  review  to be  performed  by an
independent  actuarial  firm,  acceptable  to  both  parties.  The  cost of such
independent review will be shared equally by both parties. Such determination by
the independent firm shall be binding upon both parties. No change to Additional
Reinsurer  Margin  shall  apply to such  incremental  or  decreased  Reinsurance
Premiums as a result of this Article.

                                       29
<PAGE>


                                   ARTICLE 34
                                   ----------

                                  GOVERNING LAW
                                  -------------

This  Agreement  shall  be  governed  as  to  performance,  administration,  and
interpretation by the laws of the State of New York, exclusive of the rules with
respect to  conflicts  of law, and except as to rules with respect to credit for
reinsurance  in which  case the  rules of all  applicable  states  shall  apply.
Notwithstanding the foregoing,  however, this Article does not govern nor affect
in any way the basis for any  decision or award of an  arbitration  panel acting
pursuant to Article 31.


                                   ARTICLE 35
                                   ----------

                        COMPANY'S INTERESTS & LIABILITIES
                        ---------------------------------

The interests and  liabilities of the Company and the  Affiliated  Companies are
joint and not several.

                                   ARTICLE 36
                                   ----------

                            PARTIES TO THIS AGREEMENT
                            -------------------------

This Agreement shall be binding upon all  successors,  assignees and transferees
of the parties to this Agreement, provided, however, that neither this Agreement
nor  any  rights  or  obligations  under  this  Agreement  may  be  assigned  or
transferred  to by any party  without  the prior  written  consent  of the other
party.

                                   ARTICLE 37
                                   ----------

                                ENTIRE AGREEMENT
                                ----------------

This Agreement shall  constitute the entire  agreement  between the parties with
respect to the business reinsured hereunder. There are no understandings between
the  parties  other  than as  expressed  in this  Agreement  and any  change  or
modification  of this Agreement shall be null and void unless made in writing by
amendment to the Agreement and signed by both parties.


                                   ARTICLE 38
                                   ----------

                                  INTERMEDIARY
                                  ------------

Pegasus  Advisors  - Towers  Perrin  Reinsurance  is  hereby  recognized  as the
Intermediary   negotiating   this  Treaty  for  all  business   hereunder.   All
communications  (including  but not  limited to  notices,  statements,  premium,
return  premium,  commissions,  taxes,  losses,  defense  and  cost  containment
expense,  salvages and loss settlements excluding payment of Reinsurer's Margin)
relating  hereto shall be transmitted  to the Company or the Reinsurers  through

                                       30
<PAGE>

Pegasus Advisors - Towers Perrin Reinsurance, Forestal Centre, 175 Powder Forest
Drive,  Weatogue, CT 06089. Payments by the Company to the Intermediary shall be
deemed to constitute  payment to the  Reinsurers.  Payments by the Reinsurers to
the  Intermediary  shall be deemed to constitute  payment to the Company only to
the extent that such payments are actually received by the Company.

                                       31
<PAGE>



                       INTERESTS AND LIABILITIES CONTRACT
                   (hereinafter referred to as the "Contract")

                                     to the

                         WHOLE ACCOUNT AGGREGATE EXCESS
                         OF LOSS RETROCESSION AGREEMENT
                  (hereinafter referred to as the "Agreement")

                                     between

                       EMPLOYERS REINSURANCE CORPORATION,
                              Overland Park, Kansas
                           GE REINSURANCE CORPORATION,
                              Barrington, Illinois
                                       and
                GE FRANKONA RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
                                 Munich, Germany
           (hereinafter referred to individually as a "Ceding Company"
                       and collectively as the "Company")

                                       and

                                   XL Re Ltd.

            (hereinafter referred to as the "Subscribing Reinsurer")

It is  mutually  agreed  by and  between  the  Company  on the one  part and the
Subscribing  Reinsurer on the other part that the Subscribing  Reinsurer's share
in the  interests  and  liabilities  of the  Reinsurers,  as  set  forth  in the
Agreement,  effective 12:01 a.m., Local Standard Time, January 1, 2002, attached
hereto and forming part of this Contract, shall be for X percent (XX%).

The share of the  Subscribing  Reinsurer in the interests and liabilities of all
Reinsurers  in respect of the  Agreement  shall be  separate  and apart from the
shares of the other subscribing  reinsurers to the Agreement.  The interests and
liabilities of the  Subscribing  Reinsurer shall not be joint with those of such
other subscribing  reinsurers,  and in no event shall the Subscribing  Reinsurer
participate  in  the  interests  and  liabilities  of  such  other   subscribing
reinsurers.

The  Subscribing  Reinsurer's  portion of the  Reinsurer's  Margin shall be sent
directly  to  the  Subscribing  Reinsurer  using  the  following  wire  transfer
instructions:

<PAGE>


        US$ Instructions
                  Correspondent Bank
                  CITIBANK N.A.
                  111 Wall Steet,
                  New York, N.Y.
                  FEB ABA  #021000089
                  SWIFT Code:  CITIUS33
                  CHIPS ABA: 0008

                  Beneficiary Bank
                  The Bank of Bermuda Ltd.
                  6 Front Street
                  Hamilton, Bermuda
                  SWIFT Code: BBDA BMHM

                  For the Account of:  XL Re Ltd.
                  Account No.  805175


This Contract may be executed in any number of counterparts, each of which shall
be deemed an original but all of which  together  shall  constitute  one and the
same instrument.

IN WITNESS WHEREOF,  the parties hereto have caused this Contract to be executed
by their duly authorized representatives.

For  and  on  behalf  of  EMPLOYERS  REINSURANCE  CORPORATION,   GE  REINSURANCE
CORPORATION AND GE FRANKONA RUCKEVERSICHERUNG-AKTIENGESELLSCHAFT


By:      __/s/ Jeffrey J. Cooper _____
Title:   _Vice President______________
Date:    __9/13/02 ___________________


For and on behalf of XL Re Ltd.


By:      __/s/ Daniel L. Sussman ___
Title:   __EVP______________________
Date:    ___________________________



<PAGE>


                                    EXHIBIT A

                      2002 Retrocession/Reinsurance Program

IRI:
IRI  has in  place  Per  Risk runoff  coverage  with  limits of  $XXXm excess of
$XXm for natural  perils,  excess of $XXm for fire and explosion  with differing
placed  percentages  by layer  (XX%-XX%)
We have completed a Cat program with limits of $XXXm excess of $XXm to cover the
runoff  portfolio  and the new  business  written.  IRI has  reduced the Maximum
Policy  Limits from $Xb to $XXm and has a XX%  uncapped  Quota Share for the new
portfolio.

Commercial  Insurance  Operations:  Westport  Ins  Co,  Coregis  Ins  Co.  First
Specialty Insurance Company.
Maximum  net per risk line is $Xm and cat  retention  of $XXm with cat limits to
the approximate XXX-year return period.
Other specific cat and per risk programs assigned to specific MGA programs. Each
has cat protection in place to the XXX-year occurrence level.
Coregis  and  Westport  have a XX.X%  of $Xm xs $Xm per  policy  program  on the
Affinity book (Insurance Agents, Lawyers, etc) with Fac placed above $XXm.
First  Specialty (E&S Company) has a XX% QS on $XXm limit  Umbrella  program and
generally keeps no more than $Xm net on the other business.
Other Casualty  Exposures  capped by specific  Retros or  Facultative  generally
above $X-Xm.
Westport  is  entering  into a new D&O program  where the  anticipated  net is a
maximum of XX% of $XXm. Expected premium volume of $XX-XXm for 2002.

P&C Americas Re (ERC and GE RE treaty and Fac)
A Whole Account Excess of Loss Layer provides limits of $XXm per occurrence with
2  reinstatements  in the  layer  of $XXm xs $XXm  and one in the  layer of $XXm
excess of $XXm for a total limit per year of $XXXm.
Industry Loss Warranty  Catastrophe programs in place to reduce the maximum loss
any one event above $XXm plus the reinstatement premiums.
The updated ILW program is as follows:
Inforce  through  6/30/02-  will be reviewed for adequacy  based upon  Aggregate
Exposures as of 6/30
$XX.Xm limit at $XXB Attachment
$XXm limit at $XXB Attachment
Inforce through 12/31/02
$XXm limit at a $XXB Attachment
$XXm Limit at a $XXB Attachment
$XXm Limit at a $XXB Attachment
GE RE has a XX% Casualty Facultative Program in runoff effective 1/1/02.
ERC has a XX% Quota  Share on the  Regional  Cat book  capped at an annual  loss
ratio of approximately XXX%.
Contract  Specific  Retros in place on certain  accounts with large  catastrophe
limits.
Healthcare  has a Per  Policy  XOL  treaty of $XXm  excess  of $XXm on  Hospital
business.
<PAGE>

WC Catastrophe Program with limits of $XXXm excess of $XXm with 2 reinstatements
on the first layer of $XXm xs $XXm,  1  reinstatement  on  remainder of program.
Program renews at 5/01/02 with expiring limits in runoff.  New WC cat program in
negotiation. The WC cat cover protects the treaty, fac and direct WC exposures.

GEF-

The attached slide outlines the basic program.  In addition,  the retentions are
$X-$XXm for Marine, Hull, Freight, Energy and Liability Department Specifics for
GEF London. For GEF (non-London),  the retentions are approximately $X.X million
and $XX.X million for marine. Casualty Coverage of $XXm excess of $XXm.

Unless otherwise specified, all of the retrocession/reinsurance  programs listed
above are in place for the entire Term of this Agreement.



<PAGE>


                                    EXHIBIT B

                        EMPLOYERS REINSURANCE CORPORATION
               WHOLE ACCOUNT AGGREGATE EXCESS OF LOSS RETROCESSION
                       JANUARY 1, 2002 - DECEMBER 31, 2002
<TABLE>
<CAPTION>

     Classification              Company                  LOB                 2002 Plan SNEP    % of Total

<S>       <C>                       <C>                    <C>                             <C>      <C>
         Short                     ERC                "Short Tail"                 XXX,XXX,XXX    XX.XX%
         Short                     ERC                   SIMMS                      XX,XXX,XXX     X.XX%
         Short                  Frankona              AviationFAC                  XXX,XXX,XXX     X.XX%
         Short                  Frankona               Aviation N                  XXX,XXX,XXX     X.XX%
         Short                  Frankona               Aviation P                   XX,XXX,XXX     X.XX%
         Short                  Frankona                 CREDIT                    XXX,XXX,XXX     X.XX%
         Short                  Frankona                FIREFAC                              X     X.XX%
         Short                  Frankona                 FIREN                               X     X.XX%
         Short                  Frankona                 FIREP                     XXX,XXX,XXX     X.XX%
         Short                  Frankona               MARINEFAC                             X     X.XX%
         Short                  Frankona                MARINEN                              X     X.XX%
         Short                  Frankona                MARINEP                              X     X.XX%
         Short                  Frankona                  MOTP                     XXX,XXX,XXX     X.XX%
         Short                    GE Re               Fac Property                           X     X.XX%
         Short                    GE Re              P & C Mixed PR                 XX,XXX,XXX     X.XX%
         Short                    GE Re               Property PR                  XXX,XXX,XXX     X.XX%
         Short                    GE Re               Property XS                   XX,XXX,XXX     X.XX%

      Total Short                                                                X,XXX,XXX,XXX    XX.XX%

         Medium                    ERC                   A&H PR                    XXX,XXX,XXX     X.XX%
         Medium                    ERC                   A&H XS                    XXX,XXX,XXX     X.XX%
         Medium                    ERC                  Auto PR                    XXX,XXX,XXX     X.XX%
         Medium                    ERC                  Auto XS                              X     X.XX%
         Medium                    ERC                   GL PR                      XX,XXX,XXX     X.XX%
         Medium                    ERC                   GL XS                      XX,XXX,XXX     X.XX%
         Medium                    ERC                   PL PR                     XXX,XXX,XXX     X.XX%
         Medium                    ERC                   W/C PR                    XXX,XXX,XXX     X.XX%
         Medium                    ERC                 Cas AL XS                    XX,XXX,XXX     X.XX%
         Medium                    ERC                  Cas E&O                     XX,XXX,XXX     X.XX%
         Medium                    ERC                 Cas GL XS                    XX,XXX,XXX     X.XX%
         Medium                    ERC                 Fac GL XS                   XXX,XXX,XXX     X.XX%
         Medium                    ERC                 Fac MM CM                    XX,XXX,XXX     X.XX%
         Medium                    ERC                 MM Treaty                    XX,XXX,XXX     X.XX%
         Medium                    ERC                NA Umbrella                   XX,XXX,XXX     X.XX%
         Medium                 Frankona                 GLFAC                     XXX,XXX,XXX     X.XX%
         Medium                 Frankona                  GLP                      XXX,XXX,XXX     X.XX%
         Medium                   GE Re               Fac Casualty                  XX,XXX,XXX     X.XX%
         Medium                   GE Re              P & C Mixed XS                 XX,XXX,XXX     X.XX%
         Medium                   GE Re               Prof Liab PR                  XX,XXX,XXX     X.XX%

      Total Medium                                                               X,XXX,XXX,XXX    XX.XX%

<PAGE>

          Long                     ERC                   W/C XS                              X     X.XX%
          Long                     ERC               A&H Gp Dis PR                           X     X.XX%
          Long                     ERC                 Cas WC XS                    XX,XXX,XXX     X.XX%
          Long                     ERC                 Fac MM OC                   XXX,XXX,XXX     X.XX%
          Long                     ERC                WC Spec Dir                   XX,XXX,XXX     X.XX%
          Long                     ERC                 Fac WC XS                             X     X.XX%
          Long                  Frankona                  MOTN                      XX,XXX,XXX     X.XX%
          Long                  Frankona                  GLN                      XXX,XXX,XXX     X.XX%
          Long                    GE Re               Casualty PR                   XX,XXX,XXX     X.XX%
          Long                    GE Re               Casualty XS                   XX,XXX,XXX     X.XX%
          Long                    GE Re               Prof Liab XS                  XX,XXX,XXX     X.XX%

       Total Long                                                                  XXX,XXX,XXX    XX.XX%

      Grand Total                                                                X,XXX,XXX,XXX   XXX.XX%

</TABLE>

<PAGE>


EXHIBIT C
                        NUCLEAR INCIDENT EXCLUSION CLAUSE
             LIABILITY - REINSURANCE - U.S.A. (NMA 1590) (BRMA 35A)


1.   This  Agreement  does  not cover  any loss or  liability  accruing  to  the
     Cedent as a member of, or  subscriber  to, any  association  of insurers or
     reinsurers  formed for the purpose of covering nuclear energy risks or as a
     direct or indirect reinsurer of any such member, subscriber or association.

2.   Without in  any  way  restricting  the  operation of  paragraph (1) of this
     Clause it is understood  and agreed that for all purposes of this Agreement
     all the original  policies of the Cedent (new,  renewal and replacement) of
     the  classes  specified  in Clause II of this  paragraph  (2) from the time
     specified  in Clause III of this  paragraph  (2) shall be deemed to include
     the following provision (specified as the Limited Exclusion Provision):

Limited Exclusion Provision*

       I. It is  agreed  that  the  policy  does not apply  under any  liability
          coverage, to (injury, sickness,  disease, death or destruction) bodily
          injury or property  damage with respect to which an insured  under the
          policy is also an  insured  under a nuclear  energy  liability  policy
          issued by  Nuclear  Energy  Liability  Insurance  Association,  Mutual
          Atomic Energy Liability  Underwriters or Nuclear Insurance Association
          of Canada,  or would be an insured  under any such  policy but for its
          termination upon exhaustion of its limits of liability.

      II. Family   Automobile  Policies  (liability  only),  Special  Automobile
          Policies  (private  passenger  automobiles,  liability only),  Farmers
          Comprehensive    Personal   Liability   Policies   (liability   only),
          Comprehensive Personal Liability Policies (liability only) or policies
          of a similar nature;  and the liability  portion of combination  forms
          related to the four  classes of  policies  stated  above,  such as the
          Comprehensive  Dwelling Policy and the applicable  types of Homeowners
          Policies.

     III. The  inception  dates  and  thereafter of  all  original  policies  as
          described in II above,  whether  new,  renewal or  replacement,  being
          policies which either

               (a)  become effective on or after 1st May, 1960, or

               (b)  become   effective   before   that  date  and  contain   the
                    Limited  Exclusion  Provision  set out above;  provided this
                    paragraph (2) shall not be  applicable to Family  Automobile
                    Policies,  Special Automobile  Policies,  Special Automobile
                    Policies or policies  or  combination  policies of a similar
                    nature,  issued by the  Cedent on New York  risks,  until 90
                    days following  approval of the Limited Exclusion  Provision
                    by the Governmental Authority having jurisdiction thereof.
<PAGE>

3.   Except for  those  classes of  policies specified in Clause II of paragraph
     (2) and without in any way  restricting  the  operation of paragraph (1) of
     this  Clause,  it is  understood  and agreed that for all  purposes of this
     Agreement the original  liability  policies of the Cedent (new, renewal and
     replacement) affording the following coverages:

          Owners,  Landlords  and  Tenants  Liability,   Contractual  Liability,
          Elevator  Liability,   Owners  or  Contractors  (including  railroad),
          Protective Liability, Manufacturers and Contractors Liability, Product
          Liability,   Professional  and  Malpractice  Liability,   Storekeepers
          Liability,   Garage   Liability,   Automobile   Liability   (including
          Massachusetts Motor Vehicle or Garage Liability)

     shall be deemed to include,  with respect to such coverages,  from the time
     specified  in  Clause V of this  paragraph  (3),  the  following  provision
     (specified as the Broad Exclusion Provision):

     Broad Exclusion Provision*

     It is agreed that the policy does not apply:

     I.   Under an Liability Coverage, to (injury,  sickness,  disease, death
          or destruction (bodily injury or property damage

          (a)  with  respect to  which  an  insured  under the policy is also an
               insured under a nuclear energy liability policy issued by Nuclear
               Energy  Liability  Insurance  Association,  Mutual  Atomic Energy
               Liability   Underwriters  or  Nuclear  Insurance  Association  of
               Canada,  or would be an insured under any such policy but for its
               termination upon exhaustion of its limit of liability; or

          (b)  resulting from  the  hazardous  properties  of  nuclear  material
               and with  respect  to which  (1) any  person or  organization  is
               required to maintain financial  protection pursuant to the Atomic
               Energy Act of 1954,  or any law  amendatory  thereof,  or (2) the
               insured is, or had this policy not been issued would be, entitled
               to  indemnity  from the United  States of America,  or any agency
               thereof, under any agreement entered into by the United States of
               America, or any agency thereof, with any person or organization.

     II.  Under  any  Medical  Payments  Coverage,  or  under any  Supplementary
          Payments  Provision relating to (immediate medical or surgical relief,
          (first aid,  to  expenses  incurred  with  respect to (bodily  injury,
          sickness, disease or death (bodily injury resulting from the hazardous
          properties  of nuclear  material and arising out of the operation of a
          nuclear facility by any person or organization.

<PAGE>

    III.  Under  any   Liability   Coverage,  to  (injury,  sickness,   disease,
          death or destruction  (bodily injury or property damage resulting from
          the hazardous properties of nuclear material if


          (a)  the  nuclear  material (1)  is at  any nuclear facility owned by,
               or  operated  by or on  behalf  of,  an  insured  or (2) has been
               discharged or dispersed therefrom;

          (b)  the  nuclear  material  is  contained in  spent  fuel or waste at
               any time possessed, handled, used, processed, stored, transported
               or disposed or by or on behalf of an insured; or

          (c) (the  injury,  sickness,  disease,  death  or   destruction   (the
               bodily injury or property  damage arises out of the furnishing by
               an  insured  of  services,   materials,  parts  or  equipment  in
               connection   with  the   planning,   construction,   maintenance,
               operation or use of any nuclear facility, but if such facility is
               located within the United States of America, its territories,  or
               possessions or Canada, this exclusion (c) applies only to (injury
               to or destruction of property at such nuclear facility  (property
               damage to such nuclear facility and any property thereat.

     IV.  As   used  in   this  endorsement:  "hazardous   properties"   include
          radioactive,  toxic or explosive properties;  "nuclear material" means
          source  material,  special  nuclear  material or by-product  material;
          "source   material",   "special  nuclear   material"  and  "by-product
          material"  have the meanings given to them in the Atomic Energy Act of
          1954 or in any law  amendatory  thereof;  "spent  fuel" means any fuel
          element or fuel  component,  solid or  liquid,  which has been used or
          exposed to radiation  in a nuclear  reactor;  "waste"  means any waste
          material (1) containing by-product material and (2) resulting from the
          operation  by any  person  or  organization  of any  nuclear  facility
          included within the definition of nuclear facility under paragraph (a)
          or (b) thereof; "nuclear facility" means

          (a)  any nuclear reactor,

          (b)  any  equipment  or  device  designed  or used for (1)  separating
               the isotopes of uranium or plutonium, (2) processing or utilizing
               spent fuel, or (3) handling, processing or packaging waste,

          (c)  any  equipment  or  device  used for the processing,  fabricating
               or alloying of special nuclear  material if at any time the total
               amount of such  material  in the  custody  of the  Insured at the
               premises where such equipment or device is located consists of or
               contains  more than 25 grams of  plutonium  or uranium 233 or any
               combination thereof, or more than 250 grams of uranium 235,
<PAGE>


          (d)  any  structure,  basin,  excavation,  premises  or place prepared
               or used for the storage or disposal of waste,  and  includes  the
               site on which any of the  foregoing  is located,  all  operations
               conducted on such site and all premises used for such operations;
               "nuclear reactor" means any apparatus designed or used to sustain
               nuclear fission in a self-supporting chain reaction or to contain
               a critical mass of fissionable material;

               (with respect to injury to or destruction  of property,  the word
               "injury" or "destruction"  ("property  damage" includes all forms
               of radioactive contamination of property.  (includes all forms of
               radioactive contamination of property.

     V.   The   inception  dates  and   thereafter  of   all  original  policies
          affording  coverages  specified in this  paragraph  (3),  whether new,
          renewal or  replacement,  being policies which become  effective on or
          after  1st  May,  1960,  provided  this  paragraph  (3)  shall  not be
          applicable to

          (i)  Garage  and  Automobile  Policies  issued  by  the  Cedent on New
               York risks, or

         (ii)  Statutory   liability   insurance  required   under  Chapter  90,
               General Laws of Massachusetts,  until 90 days following  approval
               of the Board Exclusion  Provision by the  Governmental  Authority
               having jurisdiction thereof.

4.   Without in  any  way  restricting   the  operation of paragraph (1) of this
     Clause,  it is understood and agreed that  paragraphs (2) and (3) above are
     not applicable to original  liability  policies of the Cedent in Canada and
     that with respect of such  policies  this Clause shall be deemed to include
     the Nuclear Energy Liability  Exclusion  Provisions adopted by the Canadian
     Underwriters'  Association  or  the  Independent  Insurance  Conference  of
     Canada.

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


*Note The words printed in italics in the Limited Exclusion Provision and in the
Broad  Exclusion  Provision  shall apply only in relation to original  liability
policies  which  include  a Limited  Exclusion  Provision  or a Broad  Exclusion
Provision containing those words.


<PAGE>


                                    EXHIBIT D

                       NUCLEAR INCIDENT EXCLUSION CLAUSE -
          PHYSICAL DAMAGE - REINSURANCE - U.S.A. (NMA 1119) (BRMA 35B)


1.   This  Contract  does  not cover  any  loss or  liability  accruing  to  the
     Reassured,  directly or  indirectly,  and whether as Insurer or  Reinsurer,
     from any Pool of Insurers or Reinsurers  formed for the purpose of covering
     Atomic or Nuclear Energy risks.

2.   Without in  any  way  restricting  the  operation  of paragraph (1) of this
     Clause,  this Contract does not cover any loss or liability accruing to the
     Reassured,  directly or  indirectly,  and whether as Insurer or  Reinsurer,
     from any insurance against Physical Damage (including business interruption
     or consequential loss arising out of such Physical Damage) to:

I.   Nuclear  reactor  power  plants  including  all  auxiliary  property on the
     site, or

     II.  Any  other  nuclear  reactor   installation,   including  laboratories
          handling   radioactive    materials   in   connection   with   reactor
          installations, and "critical facilities" as such, or

    III.  Installations   for   fabricating   complete   fuel  elements  or  for
          processing substantial  quantities of "special nuclear material",  and
          for  reprocessing,   salvaging,   chemically  separating,  storing  or
          disposing of "spent" nuclear fuel or waste materials, or

     IV.  Installations  other  than  those listed  in  paragraph (2)  III above
          using substantial quantities of radioactive isotopes or other products
          of nuclear fission.

3.   Without in  any  way  restricting  the operations of paragraphs (1) and (2)
     hereof,  this Contract does not cover any loss or liability by  radioactive
     contamination  accruing  to the  Reassured,  directly  or  indirectly,  and
     whether as Insurer or Reinsurer, from any insurance on property which is on
     the  same  site  as  a  nuclear   reactor  power  plant  or  other  nuclear
     installation and which normally would be insured therewith except that this
     paragraph (3) shall not operate

     (a)  where   the  Reassured  does  not  have  knowledge  of  such   nuclear
          reactor power plant or nuclear installation, or

     (b)  where  said  insurance  contains  a  provision  excluding coverage for
          damage  to  property   caused  by  or   resulting   from   radioactive
          contamination,  however caused. However on and after 1st January 1960,
          this  sub-paragraph (b) shall only apply provided the said radioactive
          contamination   exclusion   provision   has  been   approved   by  the
          Governmental Authority having jurisdiction thereof.

4.   Without  in  any  way restricting the operations of paragraphs (1), (2) and
     (3)  hereof,  this  Contract  does  not  cover  any  loss or  liability  by

<PAGE>

     radioactive   contamination   accruing  to  the   Reassured,   directly  or
     indirectly,  and  whether as Insurer or  Reinsurer,  when such  radioactive
     contamination is a named hazard specifically insured against.

5.   It is  understood  and agreed that  this  Clause shall  not extend to risks
     using  radioactive  isotopes in any form where the nuclear  exposure is not
     considered by the Reassured to be the primary hazard.

6.   The term "special  nuclear  material" shall  have  the  meaning given it in
     the Atomic Energy Act of 1954 or by any law amendatory thereof.

7.   The Reassured to be sole judge of what constitutes:

     (a) substantial quantities, and

     (b) the extent of installation, plant or site


NOTE: - Without in any way restricting the operation of paragraph (1) hereof, it
is understood and agreed that

     (a)  all policies  issued  by  the  Reassured on or  before  31st  December
          1957 shall be free from the  application  of the other  provisions  of
          this Clause until expiry date or 31st  December 1960  whichever  first
          occurs whereupon all the provisions of this Clause shall apply.

     (b)  with  respect  to  any risk  located in Canada  policies issued by the
          Reassured  on or  before  31st  December  1958  shall be free from the
          application  of the other  provisions of this Clause until expiry date
          or  31st  December  1960  whichever  first  occurs  whereupon  all the
          provisions of this Clause shall apply.


<PAGE>


                                    EXHIBIT E

       NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) 1984 (WORLDWIDE
               EXCLUDING U.S.A. and CANADA) (NMA 1975) (BRMA 34B)


This Agreement shall exclude Nuclear Energy Risks whether such risks are written
directly and/or by way of reinsurance and/or via Pools and/or Associations.

For all purposes of this Agreement, Nuclear Energy Risks shall be defined as all
first party  and/or third party  insurances  (other than  Workers'  Compensation
and/or Employers' Liability) in respect of:

     (i)  nuclear reactors and nuclear power stations or plant

     (ii) any other  premises or facilities  whatsoever  related to or concerned
          with:

          (a) the production of nuclear energy or

          (b) the  production  or storage or handling of nuclear fuel or nuclear
              waste.

    (iii) any  other  premises  or facilities  eligible  for  insurance  by  any
          local  Nuclear Pool and/or  Association  but only to the extent of the
          requirements  of the  local  Pool  and/or  Association,  it being  the
          intention  always that  Reinsurers  shall  follow the  fortunes of the
          Reinsured  insofar as the Reinsured  complies with the requirements of
          any such local Pool and/or Association.

However, this Exclusion shall not apply

     (a)  to  any  insurance  or  reinsurance  in  respect of the  construction,
          erection  or  installation  of  buildings,  plant and  other  property
          (including   contractor's  plant  and  equipment  used  in  connection
          therewith):

          (i)  for the storage of nuclear  fuel - prior to the  commencement  of
               storage.

         (ii)  as regards reactor installations - prior to the commencement
               of  loading  of nuclear  fuel into the  reactor,  or prior to the
               initial  criticality,   depending  on  the  commencement  of  the
               insurance  or  reinsurance  of the  relevant  local  Nuclear Pool
               and/or Association.

     (b)  to  any  Machinery  Breakdown  or  other  Engineering   insurance   or
          reinsurance  not coming  within the scope of (a) above,  nor affording
          coverage in the "higher radioactivity" zone.

Notwithstanding  the provisions of this Clause,  certain liabilities the type of
which by market  practice  and custom  have not been  declared  to the  Japanese
Nuclear Pool are covered hereunder.


<PAGE>


                                    EXHIBIT F

              WAR RISKS EXCLUSION CLAUSE (REINSURANCE) ( BRMA 56B)


As regards  interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by war,
invasion,   hostilities,   acts  of  foreign  enemies,   civil  war,  rebellion,
insurrection, military or usurped power, or martial law or confiscation by order
of any government or public authority.

This War Exclusion Clause shall not, however, apply to interest which at time of
loss or damage are within the territorial limits of the United States of America
(comprising  the fifty  States of the Union and the  District of  Columbia,  its
territories   and   possessions,   including  the  Panama  Canal  Zone  and  the
Commonwealth  of Puerto Rico and including  Bridges between the United States of
America and Mexico provided they are under United States ownership), Canada, St.
Pierre  and  Miquelon,  provided  such  interests  are  insured  under  original
policies,  endorsements  or binders  containing a standard war or hostilities or
warlike operations exclusion clause.

Nevertheless,  this  clause  shall not be  construed  to apply to loss or damage
occasioned by riots,  strikes,  civil commotion,  vandalism,  malicious  damage,
including acts committed by agents of any  government,  party or faction engaged
in war, hostilities or other warlike operation,  provided such agents are acting
secretly and not in  connection  with any  operations of military or naval armed
forces in the country where the interests insured are situated.



<PAGE>


                                    EXHIBIT G

                        INSOLVENCY FUNDS EXCLUSION CLAUSE


This Agreement excludes all liability of the Ceding Company arising by contract,
operation of law or otherwise,  from its  participation  or membership,  whether
voluntary or involuntary, in any insolvency fund. "Insolvency Fund" includes any
guarantee  fund,  insolvency  fund,  plan,  pool,  association,  fund  or  other
arrangement, howsoever denominated,  established or governed, which provides for
any  assessment of or payment or assumption by the Ceding Company of part or all
of any  claim,  debt,  charge,  fee or other  obligation  of an  insurer  or its
successors or assigns  which has been declared by any competent  authority to be
insolvent or which is otherwise deemed unable to meet any claim,  debt,  charge,
fee or other obligation in whole or in part.



<PAGE>


                                    EXHIBIT H

               POOLS, ASSOCIATIONs AND SYNDICATES EXCLUSION CLAUSE

Section A:

Excluding:

     All business derived directly or indirectly from any Pool, Association,  or
     Syndicate,  except  for  the  IRI  Association,  which  maintains  its  own
     reinsurance facilities.

     Any Pool or Scheme (whether  voluntary or mandatory)  formed after March 1,
     1968 for the purpose of insurance  property whether on a country-wide basis
     or in  respect  of  designated  areas.  This  exclusion  shall not apply to
     so-called  Automobile  Insurance  Plans or other  Pools  formed to  provide
     coverage for Automobile Physical Damage.

Section B:

It is agreed that business written by the Company for the same perils,  which is
known at the time to be insured by, or in excess of underlying amounts placed in
the following Pools, Associations or Syndicates,  whether by way of insurance or
reinsurance, is excluded hereunder:

          Associated Factory Mutuals Improved Risk Mutuals
          Any Pool,  Association or Syndicate  formed for the purpose of writing
          (except for IRI)
          Oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs,
          United States Aircraft  Insurance Group,  Canadian Aircraft  Insurance
          Group,
          Associated Aviation Underwriters, American Aviation Underwriters

Section B does not apply:

Where the Total Insured Value over all interests of the risk in question is less
than $XXX,XXX,XXX.

To  interests  traditionally  underwritten  as  Inland  Marine  or stock  and/or
contents written on a blanket basis.

To Contingent Business  Interruption,  except when the Company is aware that the
key  location  is known at the time to be insured in any Pool,  Association,  or
Syndicate named above other than as provided for under Section B(a).


<PAGE>


To risks as follows:

          Offices, Hotels, Apartments,  Hospitals,  Educational  Establishments,
          Public Utilities,  (other than railroad schedules) and builder's risks
          on the classes of risks specified in this subsection (d) only.

Where this clause attaches to Catastrophe  Excesses,  the following Section C is
added:

Section C:

Nevertheless the Reinsurer  specifically  agrees that liability  accruing to the
Company from its participation in:

The following so-called "Coastal Pools":

          Alabama Insurance Underwriting Association
          Florida Windstorm Underwriting Association
          Louisiana Insurance Underwriting Association
          Mississippi Windstorm Underwriting Association
          North Carolina Insurance Underwriting Association
          South Carolina Windstorm and Hail Underwriting Association
          Texas Catastrophe Property Insurance Association

                                       AND

All "Fair  Plan"  and  "Rural  Risk  Plan"  business  for all  perils  otherwise
protected  hereunder  shall  not  be  excluded,   except,   however,  that  this
reinsurance does not include any increase in such liability resulting from:

     (i)  The  inability  of  any  other  participant  in  such  "Coastal  Pool"
          and/or "Fair Plan" and/or "Rural Risk Plan" to meet its liability.

    (ii)  Any  claim  against  such  "Coastal  Pool"  and/or "Fair  Plan" and/or
          "Rural Risk Plan" or any participant  therein,  including the Company,
          whether by way of subrogation or otherwise, brought by or on behalf of
          any  insolvency  fund (as  defined in the  Insolvency  Fund  Exclusion
          Clause incorporated in this Contract).