Exhibit 10.11

                                    Preferred
                                      Life
                          Insurance Company of New York
                        152 West 57th Street, 18th Floor
                            New York, New York 10019

                              REINSURANCE AGREEMENT

                                     between

                  PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
                               New York, New York

                  (hereinafter referred to as "Preferred Life")

                                       and

                              MDNY HEALTHCARE, INC.

                               Melville, New York

                       (hereinafter referred to as "Plan")

                             January 1, 1999 RENEWAL

                       REINSURANCE POLICY NUMBER 17055-036

                                                    Tax I.D. #__________________

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                                TABLE OF CONTENTS

TITLE                                                         ARTICLE

Reinsurance Coverage

Definitions                                                      I

Schedule of Reinsurance                                         II

Premium  Payment                                               III

Notice of Claims and Reimbursement                              IV

Reports, Records and Audits                                      V

Arbitration                                                     VI

Insolvency/Cessation of Operations                             VII

Limitations of Reinsurance Coverage                           VIII

Effective Date, Duration and Termination                        IX

General Provisions                                               X

Document Execution

Endorsements:

Continuation of Benefits                                         1

Out of Area Conversion Provision                                 2

<PAGE>

                              Reinsurance Coverage

It is hereby agreed that in consideration of the promises, terms, and conditions
contained in this Reinsurance Agreement,  Plan shall cede to, and Preferred Life
shall  reinsure,   the  portion  specified  herein  of  the  Membership  Service
Agreements issued by the Plan.

                                   Article I

                                   Definitions

A.    "Acute Care Services" shall mean those services which are necessary to the
      care and treatment of an unstable medical condition caused by the onset of
      an illness or injury which places the patient's  health in severe jeopardy
      and requires immediate medical attention.

            Acute Care  Services  do not include  health care or other  services
            which are for  custodial  care or  services  which  assist in or are
            intended to improve the usual activities of daily living.

B.    "Approved Fixed  Procedural Fee Hospital" shall mean a hospital with fixed
      per diems or fixed ease rates  which have been  reviewed  and  approved by
      Allianz Life prior to any service  being  rendered.  This does not include
      any discounted fee-for-service arrangements, nor does it include per diems
      or  case  rates  which  revert  to  a  discount  off  actual  charges  for
      fee-for-service once an outlier or stop-loss threshold has been reached.

C.    "Contract  Year" shall mean the twelve (12) month  period  which begins on
      the Effective Date of this  Reinsurance  Agreement,  or any anniversary of
      the Effective Date.

D.    "Deductible"  shall mean the  deductible  amount  shown in the Schedule of
      Reinsurance. The Deductible will be applied to any Loss as follows:

      1.    If the Loss  consists  of  Eligible  Hospital  Services  or Eligible
            Medical   Services   incurred   during  a  period   of   continuous,
            uninterrupted  confinement at one or more  facilities,  charges from
            each facility  will be applied to the  Deductible in an amount equal
            to the  proportion  of that  facility's  Services to total  Eligible
            Hospital Services or Eligible Medical Services.

E.    "Eligible  Hospital  Services"  shall mean those Acute Care  Services  for
      Members who require Acute Care while  registered  bed patients,  which are
      generally and customarily provided by the Plan's  participating  hospitals
      or other specialized  institutions within the Service Area of the Plan and
      which are prescribed, directed, or authorized by or on behalf of the Plan.
      Eligible Hospital Services shall mean the lesser of:

      1.    The amount of the Plan's fee schedule; or

      2.    The amount of the Reasonable and Customary charges;

but in any event,  Eligible  Hospital Services shall be limited to an average of
$2,000 per day of each period of continuous hospital confinement. Operating room
charges are Eligible Hospital Services, but are excluded from the calculation of
the average daily limit.  Eligible Hospital Services shall also include Referral
Services and outpatient facility charges.

<PAGE>

F.    "Eligible Medical Services" shall mean those services  performed by health
      care professional and paramedical  personnel including medical,  surgical,
      diagnostic,  therapeutic,  and preventive services which are generally and
      customarily  performed,  prescribed,  or  directed  by or on behalf of the
      Plan. Eligible Medical Services shall mean the lesser of:

      1.    The amount of the Plan's fee schedule; or

      2.    The amount of the Reasonable and Customary charges;

      Eligible Medical Services shall also include Referral Services

G.    "Loss" shall mean only such  eligible  amounts as are incurred  during the
      Contract Year, or under the previous year's "carry forward"  provision for
      treatment  and  services  rendered  to a  Member  while  this  Reinsurance
      Agreement  is in effect and  provided  such  treatment  and  services  are
      covered by the  Membership  Service  Agreement.  The word "Loss" shall not
      include:

      1.    Compensation  paid to salaried  officers or employees of the Plan or
            any other overhead expenses;

      2.    Any amount paid by the Plan for  punitive or exemplary  damages,  or
            compensatory  damages  awarded  to  any  Member  arising  out of the
            conduct of the Plan in the  investigation,  trial,  or settlement of
            any claims or failure to pay or delay in payment of  benefits  under
            its Membership Service Agreement; or

      3.    Any Statutory penalty imposed upon the Plan on account of any unfair
            trade practice or any unfair claims practice.

H.    "Member" shall mean any person or family  dependent  enrolled and eligible
      to receive services under a Membership Service Agreement.

I.    "Membership Service Agreements" shall mean those contractual agreements to
      provide services to Members of the Plan which are approved by the State of
      New York and are for those Members for who Plan has requested  reinsurance
      coverage from Preferred Life.  Under those Membership  Service  Agreements
      only the following  products  serviced by the Plan will be reinsured under
      this Agreement:

            1.    Commercial HMO                  2. Medicare

            Applicable  Membership  Service  Agreements shall be incorporated by
            reference.

J.    "Prior   Approved   Transplant   Reimbursement   Schedule"  shall  mean  a
      reimbursement  schedule  for  a  specific  transplant  procedure  that  is
      approved, in writing, by Preferred Life prior to the transplant admission.
      Instructions  for obtaining  prior  approval are available  from Preferred
      Life upon request.

K.    Reasonable  and  Customary"  shall  mean  the  cost of  services  that are
      generally  incurred  for cases of  comparable  nature and  severity in the
      geographical area involved.

L.    "Referral  Services"  shall mean those Acute Care  Services  provided to a
      Member  by a  non-participating  hospital  which,  due to the  specialized
      nature of the  service or  facility  required,


                                       2
<PAGE>

cannot be  provided by the Plan's  participating  hospitals.  Referral  Services
shall be considered  Eligible  Hospital Services or Eligible Medical Services if
such services are specifically  authorized by the Plan.  Referral Services shall
mean the lesser of:

      1.    The amount of the negotiated charges; or

      2.    The amount of the Reasonable and Customary charges;

but in any event  Referral  Services,  to the extent they are Eligible  Hospital
Services,  shall be limited  to an  average of $2,000 per day of each  period of
continuous  hospital  confinement.  Operating room charges are excluded from the
calculation of the average daily limit.

M.    "Service  Area"  shall mean the  service  area  defined in the  Membership
      Service Agreements.


                                       3
<PAGE>

                                   Article II

                             Schedule of Reinsurance

A.    The Effective Date for this Reinsurance Agreement shall be January 1,1999.

B.    The monthly premium for the Reinsurance  Coverage  defined in paragraph C.
      below shall be $1.51 per Commercial Member and $4.33 per Medicare Member.

C.    The Reinsurance  Coverage to be provided under this Reinsurance  Agreement
      shall be defined as follows:

      1.    For  Eligible  Hospital  Services,  the  Deductible  amount for such
            Reinsurance  Coverage  shall be $100,000 of the Loss for each Member
            for  each  Contract  Year.  For  Eligible  Medical   Services,   the
            Deductible amount for such Reinsurance  Coverage shall be $20,000 of
            the Loss for each Member for each Contract Year. Once the Deductible
            has been satisfied, Preferred Life shall indemnify the Plan for:

            a.    The  excess  Loss  for  Eligible  Hospital  Services  in  that
                  Contract  Year for any  Member who is under one year of age at
                  the start of the Contract Year shall be reimbursed as follows:

                  1)    90%  if  services  are  performed  in a  "per  diem"  or
                        approved fixed procedural fee hospital.

                  2)    85% if services are performed on an outpatient basis.

                  3)    70% if services are performed in any other hospital.

            b.    The  excess  Loss  for  Eligible  Hospital  Services  in  that
                  Contract Year for any Member who is one year of age or over at
                  the start of the Contract Year shall be reimbursed as follows:

                  1)    90%  if  services  are  performed  in a  "per  diem"  or
                        approved fixed procedural fee hospital.

                  2)    80% if services are performed on an outpatient basis.

                  3)    80% if services are performed in any other hospital.

            c.    The  excess  Loss  for  Eligible  Hospital  Services  in  that
                  Contract  Year for  expenses  related to organ and bone marrow
                  transplant therapy shall be reimbursed as follows:

                  1)    90% if services  are  performed  in a LifeTrac  facility
                        with a Prior Approved Transplant  Reimbursement Schedule
                        for that confinement.

                  2)    80% if services are performed in a hospital with a Prior
                        Approved  Transplant  Reimbursement  Schedule  for  that
                        confinement.

                  3)    50% if services are performed in any other hospital.


                                       4
<PAGE>

                  4)    50% for organ and bone marrow Retransplantation Services
                        performed in any  hospital.  Retransplantation  Services
                        shall  mean  retransplantation  of the  same  organ/bone
                        tissue type performed within one year of the date of the
                        initial transplant procedure.

                  The acquisition  cost of the "live" organ is not included as a
                  benefit in this Reinsurance Agreement for any organ transplant
                  procedure.

            d.    90% of the excess Loss for Eligible  Medical  Services in that
                  Contract Year paid by the Plan to a provider.

            e.    In the event an excess  Loss could be  indemnified  under more
                  than one of the above  subsections,  the subsection  providing
                  the least indemnity shall apply.

            f.    Except  for  the  hospitals  listed  in  Exhibit  I,  expenses
                  incurred at hospitals having "per diem"  arrangements with the
                  Plan  shall  be  reimbursed  on the  basis  of the  contracted
                  hospital's  actual  charges to the  Member or Plan,  but in an
                  amount  which does not exceed  the "per  diem"  rate.  For the
                  hospitals  listed in  Exhibit  I,  eligible  charges  shall be
                  limited  to the  amounts  stated,  including  any  outlier  or
                  stoploss provisions, if specifically listed.

                  Hospitals  with outlier or stoploss  provisions  in which "per
                  diem"  revert to a  discount  off  actual  charges  or fee-for
                  services  charges shall not be considered "per diem" hospitals
                  once the outlier or stoploss threshold is reached.

            h.    Notwithstanding the above, the maximum  reinsurance  indemnity
                  payable under this Reinsurance Agreement for Eligible Hospital
                  Services and Eligible  Medical  Services for each Member shall
                  be $2,000,000.

D.    Loss  incurred  by the Plan  during  the last  thirty-one  (31)  days of a
      Contract Year for which no benefits  were payable  under this  Reinsurance
      Agreement  because  such  Loss  was  applied  to the  Deductible  for that
      Contract Year shall be applied  toward the  Deductible  for the succeeding
      Contract Year.  Benefits for carry-forward  Losses shall be subject to the
      maximums established in Article I, Sections E and L.

E.    The preceding  Schedule of  Reinsurance  is subject to the  Limitations as
      defined in Article VIII.


                                       5
<PAGE>

                                  Article III

                                 Premium Payment

A.    The  amount  of  premiums  to be paid by the  Plan to  Preferred  Life for
      Reinsurance  Coverage  under this  Reinsurance  Agreement  is set forth in
      Article II herein.

B.    Premiums  shall be  payable  monthly  and shall be based on the  number of
      Members  enrolled and eligible to receive Eligible  Hospital  Services and
      Eligible Medical Services during the month.

C.    Premiums shall be due on the first day of the month for which  Reinsurance
      Coverage is provided  and are payable to  Preferred  Life at its office in
      New York, New York.

D.    A grace  period not to exceed  one month  shall be granted to the Plan for
      the payment of every premium due.

E.    If any premium is not paid before the expiration of the grace period, this
      Reinsurance  Agreement shall automatically  terminate as of the expiration
      of the period for which premium has been paid.

F.    The premium  payment by the Plan to Preferred Life shall be accompanied by
      a statement  signed by an authorized  Plan official in which the number of
      enrolled and eligible Members for that month is given.

G.    Preferred  Life shall  have the right to change the  premium at the end of
      the first  Contract  Year of this  Reinsurance  Agreement  and at any time
      thereafter,  provided this  Reinsurance  Agreement has not had the premium
      changed within the preceding  twelve (12) months and further provided that
      at least  thirty-one  (31) days written notice has been given by Preferred
      Life to the Plan. The Plan must give Preferred Life  thirty-one  (31) days
      advance  written  notice of any change in  coverage.  Upon  notice of such
      change of coverage,  Preferred Life may elect to exclude the  modification
      of  coverage  from  Reinsurance  Coverage  or  charge  additional  premium
      therefore.  Preferred  Life  shall not be liable for any  modification  of
      coverage  of the  Reinsured  Policy  in the event  that the Plan  fails to
      properly  notify  Preferred Life. Any change in premium that is solely the
      result of a change in coverage shall not be considered a change in premium
      requiring  the twelve (12) month period of time before  another  change in
      premium can be made.


                                       6
<PAGE>

                                   Article IV

                       Notice of Claims and Reimbursement

A.    The Plan shall give  Preferred  Life timely written notice of any claim or
      potential  claim.  The Plan shall use its best  efforts to give  Preferred
      Life notice of claim or potential  claim within  thirty-one (31) days from
      the date on which the claim or potential claim is incurred.

B.    Preferred  Life shall  furnish the Plan with a supply of claim forms to be
      used in filing a claim.

C.    The Plan shall file  completed  proof of Loss by sending to Preferred Life
      the  information  requested  on the claim  form,  along with copies of the
      various bills and itemized expenses involved.

D.    In accordance with the terms and conditions of this Reinsurance Agreement,
      Preferred  Life shall make payment to the Plan within  thirty (30) days of
      Preferred Life's receipt of complete  written proof of such Loss,  subject
      to E. below.

E.    Preferred  Life shall not be liable  with  regard to any Loss for which it
      has not received  written  notice  within the twelve (12) months after the
      end of the Contract  Year in which the Loss was  incurred.,  except in the
      case of insolvency, as defined in Article VII.


                                       7
<PAGE>

                                   Article V

                           Reports, Records and Audits

A.    The Plan shall submit a monthly report to Preferred Life listing the names
      and amounts for those Members who have received Eligible Hospital Services
      and  Eligible  Medical  Services  during the  Contract  Year which  exceed
      seventy-five  (75)  percent of the per Member  Deductible  as set forth in
      Article II.

B.    The Plan shall report to Preferred  Life any changes of a material  nature
      in its  Membership  Service  Agreements.  Such  report  shall  be  sent to
      Preferred Life at least  thirty-one (31) days before the Effective Date of
      the change so that Preferred Life may evaluate the need for any changes in
      this Reinsurance Agreement.

C.    The Plan shall report to Preferred Life any  investigation  or request for
      information of a material nature by a State Insurance Department regarding
      the  conduct of the Plan.  Such  report must be provided in writing by the
      Plan to Preferred Life within  thirty-one (31) days following the date the
      Plan receives  notice,  written or  otherwise,  of such  investigation  or
      request from the State Insurance Department.

D.    The Plan shall keep a record of the monthly  enrollment of Members covered
      by its Membership  Service  Agreements and the Eligible  Hospital Services
      and Eligible Medical Services  received by each Member while covered under
      this Reinsurance Agreement. Such record shall be kept during the time this
      Reinsurance Agreement is in effect and for a one (1) year period after its
      termination date.

E.    The Plan's books and  records,  to the extent  permitted by law,  shall be
      made  available to  Preferred  Life for  inspection  and audit at any time
      during normal business hours during the time this Reinsurance Agreement is
      in effect and for a one (1) year period after its termination date.

F.    All information  disclosed to Preferred Life by the Plan or to the Plan by
      Preferred Life, either in the course of conducting  negotiations or as the
      result of  complying  with the terms and  conditions  of this  Reinsurance
      Agreement,   shall  be  considered  to  be  privileged  and   confidential
      information by both the Plan and Preferred Life.

G.    The  submission  of  this  Reinsurance  Agreement  to  any  Department  of
      Insurance  or any  State or  Federal  agency  shall  not be  considered  a
      violation of F above.


                                       8
<PAGE>

                                   Article VI

                                   Arbitration

A.    In the event of any dispute or difference  of opinion  arising out of this
      Agreement  which  cannot be amicably  resolved  by the Plan and  Preferred
      Life, the Plan and Preferred Life agree that such dispute or difference of
      opinion shall be submitted to and settled by arbitration.

B.    Except as otherwise provided herein, the arbitration shall be conducted in
      accordance  with  the  Commercial   Arbitration   Rules  of  the  American
      Arbitration  Association  (the "AAA" and the "AAA's Rules") which shall be
      in effect on the date of delivery of demand for arbitration.  In the event
      that the AAA's Rules  conflict with any  provisions of this Article,  this
      Article shall govern.

C.    The party that determines that a dispute should be resolved by arbitration
      (the "Initiating Party") shall give written notice to the other party (the
      "Responding  Party") of its  desire to compel  arbitration,  which  notice
      shall  contain a statement  setting  forth the nature of the dispute,  the
      amount involved, if any, and the remedy sought.

D.    The  arbitration  tribunal shall consist of three  arbitrators who must be
      disinterested  parties,  unaffiliated with the Plan or Preferred Life. The
      Plan shall appoint one  arbitrator,  and Preferred  Life shall appoint one
      arbitrator.  The third  arbitrator  shall be appointed by the previous two
      (2) arbitrators.  If the two previous  arbitrators cannot agree on a third
      arbitrator, then the third arbitrator shall be appointed by AAA.

E.    If either party refuses or neglects to appoint an arbitrator  within sixty
      (60) days after receipt of written notice from the other party  requesting
      it to do so, the requesting  party shall instruct AAA to appoint a neutral
      second  arbitrator.  The two  appointed  arbitrators  can then appoint the
      third.

F.    For the  purposes of  arbitration,  this  Reinsurance  Agreement  shall be
      considered an honorable  engagement  rather than a mere legal  obligation,
      and the arbitrators  are not bound by judicial  formalities or strict rule
      of law in interpreting this Reinsurance Agreement.

G.    The decision of a majority of the  arbitrators  shall be final and binding
      on both the Plan and Preferred Life.

H.    The expense of arbitration shall be divided between the Plan and Preferred
      Life based on a decision made by the arbitrators.

I.    Any such  arbitration  shall  take  place in New York,  unless  some other
      location is mutually agreed upon.

J.    The laws of New York  shall  govern the  arbitration  process in the event
      they conflict with A through I above.


                                       9
<PAGE>

                                  Article VII

                       Insolvency/Cessation of Operations

A.    In the event that Preferred Life should become insolvent, this Reinsurance
      Agreement shall  automatically  terminate on the date of Preferred  Life's
      insolvency.

B.    In the  event  that the Plan  shall  become  insolvent,  this  Reinsurance
      Agreement  shall  automatically  terminate  on  the  date  of  the  Plan's
      insolvency.  All Reinsurance  shall be payable directly to the liquidator,
      receiver,  or statutory  successor of the Plan,  without diminution due to
      the insolvency of the Plan.

C.    For purposes of this  Reinsurance  Agreement,  "insolvent" or "insolvency"
      shall mean that both of the following conditions occur:

      1.    A final  determination is made by a court of competent  jurisdiction
            that the Plan or Preferred Life is insolvent; and

      2.    All operations of the Plan or Preferred Life cease.

            The date of  insolvency  shall be  determined  as the date which the
            court  declares the Plan or Preferred  Life insolvent or the date on
            which the Plan or Preferred  Life has ceased  operations,  whichever
            date is later in time.

            Operations of the Plan will not be considered  ceased so long as the
            Plan is in control of a Receiver (which, as used herein,  includes a
            court or state appointed  supervisor,  receiver,  or  rehabilitator)
            until  the date the  Receiver  stops  paying  for  future  services,
            publicly  declares  its  intention  to not make  payment  for future
            services,  and orders Plan providers to stop  rendering  services on
            behalf of the Plan other than those  services for the remaining term
            for which providers have previously been paid.

D.    In the event the Plan should cease  operations  and become  insolvent,  as
      defined  above,  during  the  term of this  Reinsurance  Agreement,  it is
      further agreed the following would apply:

      1.    The liquidator,  receiver,  or statutory successor of the Plan shall
            give written  notice to Preferred  Life of the pendency of any claim
            affecting this Reinsurance  Agreement within a reasonable time after
            such a claim is filed. During the pendency of such claim,  Preferred
            Life may  investigate at its own expense such claim and interpose in
            the proceeding  where such claim is to be adjudicated,  any defenses
            which  it may  deem  available  to the  Plan  or to its  liquidator,
            receiver, or statutory successor; and

      2.    The expense  thus  incurred by Preferred  Life shall be  chargeable,
            subject to court  approval,  against the Plan or its  successors  as
            part of the expense of liquidation to the extent of a  proportionate
            share of the benefit which may accrue to the Plan solely as a result
            of the defense undertaken by Preferred Life.

E.    Notice of the Plan's or  Preferred  Life's date of  insolvency  or date of
      cessation of operations  shall be  communicated  to the other party at the
      earliest possible point in time.


                                       10
<PAGE>

                                  Article VIII

                       Limitations of Reinsurance Coverage

A.    Preferred Life's  reimbursement of claims to the Plan shall not exceed, in
      any event, the limits of coverage stated in Article II.

B.    The Plan is solely  responsible for providing all services to its Members,
      for  compensation of all liability to its Members,  and for payment of all
      expenses to its Members.

C.    Preferred Life shall have no  responsibility  or obligation to provide any
      services or payment to any Member of the Plan, directly or indirectly.

D.    To the extent the Plan  receives or will receive any payment or receives a
      reduction  in its  liability  by  reason  of a  Coordination  of  Benefits
      provision in the Plan's  Membership  Service  Agreement or by any right of
      subrogation.  Preferred  Life shall only  indemnify the Plan in respect of
      any excess  beyond the amount of COB or  subrogation  amounts  received or
      applied currently or in the future as reductions in its liability.

E.    Preferred  Life shall not  reimburse  the Plan for  amounts  incurred  for
      skilled nursing or rehabilitative services (including,  but not limited to
      treatments   for  motor   function  or  mobility,   physical   therapy  or
      psychotherapies),  unless such services are provided  concurrent  with and
      incidental to Acute Care Services.

F.    Preferred  Life  shall not be liable to the Plan,  and the Plan shall hold
      harmless and indemnify Preferred Life, for any of the following:

      1.    Professional  liability  or  liability  for  any  act  or  omission,
            tortious or otherwise,  in connection with any services  rendered to
            any person or group of persons by the Plan or any group,  entity, or
            person employed by or affiliated in any manner with the Plan;

      2.    Liability assumed by the Plan in excess of Plan's Membership Service
            Agreements as identified in Article I of this Reinsurance Agreement,
            including  liability under any contract other than Plan's Membership
            Service Agreements;

      3.    Expenses  or losses for which the Plan has  released  any persons or
            entity from its legal liability;

      4.    Liabilities which are non-pecuniary in nature (not having a monetary
            value);

      5.    Liabilities,   expenses,   or  losses   which  are  based  upon  any
            noncompliance or violation of any Federal or State statute, rule, or
            regulation by the Plan;

      6.    Additional  expenses or losses  resulting  from those services which
            are  billed in excess of the  usual and  customary  charges  for the
            locality where same were administered;

      7.    Any expenses to the extent the Plan  receives a reduction in charges
            because  of a  Coordination  of  Benefits  provision  in the  Plan's
            Membership Service Agreements or any right of subrogation;


                                       11
<PAGE>

      8.    Any liability due to war or act of war;

      9.    Any liability for replacement of equipment,  furniture,  or supplies
            which  are  not  Eligible  Hospital  Services  or  Eligible  Medical
            Services.

      10.   Any  liability  for any  property  damage  expenses  resulting  from
            negligence by any party which causes a failure of any equipment used
            in the treatment of a Member.


                                       12
<PAGE>

                                   Article IX

                    Effective Date, Duration and Termination

A.    This Reinsurance Agreement shall become effective on the date set forth in
      Article II.

B.    This  Reinsurance  Agreement  shall  continue in effect from the Effective
      Date until it is terminated.

C.    This Reinsurance  Agreement shall automatically  terminate for non-payment
      of premium by the Plan as set forth in Article III.

D.    This Reinsurance  Agreement shall  automatically  terminate on the date of
      Preferred  Life's  insolvency or cessation of operations or on the date of
      the Plan's insolvency or cessation of operations.

E.    This Reinsurance  Agreement can be terminated in accordance with paragraph
      A. of Article X.

F.    Termination of this  Reinsurance  Agreement shall not terminate the rights
      or  liabilities  of either the Plan or Preferred  Life arising  during any
      period when this Reinsurance Agreement was in force, provided that nothing
      herein  shall be  construed  to  extend  Preferred  Life's  liability  for
      reimbursements  under this Reinsurance  Agreement for any Loss paid by the
      Plan  which  was  incurred  on or after  the date of  termination  of this
      Reinsurance Agreement.

G.    The Plan and  Preferred  Life shall each have the right to terminate  this
      Reinsurance Agreement by giving the other party, and the State of New York
      Health and  Insurance  Departments,  written  notice of such  intention to
      terminate at least  thirty-one  (31) days prior to the end of any Contract
      Year.


                                       13
<PAGE>

                                   Article X

                               General Provisions

A.    It is  understood  and agreed  that if at any time while this  Reinsurance
      Agreement is in effect the Plan should:

      1.    Acquire   the  assets  and   liabilities   of  any  other   company,
            corporation, or foundation; or

      2.    Be  acquired,  come  under  control  of or be merged  with any other
            company, corporation, or foundation;

            Preferred  Life shall,  at its  option,  have the right to charge an
            additional  premium  to the  Plan,  or  terminate  this  Reinsurance
            Agreement by giving written notice by certified mail which shall set
            forth the date and time of such  termination,  but not  sooner  than
            thirty-one (31) days after the date of receipt of such notice.

B.    The Plan shall give Preferred Life written notice in the event that any of
      A. above should occur as soon as Plan is aware that such event will occur.

C.    This Reinsurance Agreement may be altered or amended at any time by mutual
      consent of the Plan and Preferred  Life either by written  Amendment or by
      correspondence signed by officers of the Plan and Preferred Life. Any such
      Amendments or correspondence  shall be binding upon the Plan and Preferred
      Life and  deemed to be an  integral  part of this  Reinsurance  Agreement.
      Amendments  are  subject to  approval  by the State of New York Health and
      Insurance Departments prior to effectuation.

D.    This  Reinsurance  Agreement  shall not be assignable  without the express
      written consent of the other party.

E.    Nothing  in this  Reinsurance  Agreement  shall  create any right or legal
      contractual  relationship  between  Preferred  Life and any Member under a
      Membership  Service Agreement  identified in Article I of this Reinsurance
      Agreement.

F.    The Plan is  solely  responsible  for all  services  to  Members,  for all
      liabilities  to  Members,  and  for  payment  of all  claims  of  Members.
      Preferred Life shall not have any  responsibility or obligation to provide
      any  service  or  payment  to any  Member,  directly  or  indirectly.  The
      Reinsurance Coverage provided herein is payable solely to the Plan.

G.    If any payment is made by Preferred Life under this Reinsurance Agreement,
      Preferred  Life shall be  subrogated  to all the Plan's  rights to recover
      such  payment  against any Member,  person or  organization,  and the Plan
      shall  execute and deliver  instruments  and do whatever is  necessary  to
      preserve and secure such rights.  Any  recovery  made by the Plan,  net of
      attorney's  fees charged to the Plan,  shall be paid to Preferred  Life to
      the extent of payment made under this Reinsurance Agreement.

H.    This Reinsurance Agreement, including Endorsements and attached papers, if
      any,  constitutes the entire  contract of  reinsurance.  No change in this
      Reinsurance  Agreement  shall  be valid  until  approved  by an  executive
      officer of Preferred  Life and unless such approval be


                                       14
<PAGE>

      endorsed hereon or attached hereto.  No agent has authority to change this
      Reinsurance Agreement or to waive any of its provisions.

I.    Plan agrees to give  Preferred  Life written notice of any change in Chief
      Operating  Management,  any fundamental  change in the Management  Service
      Contract,  or any change in majority  ownership of the Plan, and Preferred
      Life shall reserve the right within  thirty-one (31) days.  Preferred Life
      shall  reserve the right  within  thirty-one  (31) days of receipt of such
      written notice to terminate this Reinsurance Agreement.

As of  January  1,  1999,  all  the  promises,  terms  and  conditions  of  this
Reinsurance  Agreement will  supersede  those of  Reinsurance  Agreement  Policy
Number 17055-036, dated January 1, 1998, and Reinsurance Coverage will be deemed
continuous.

IN  WITNESS  WHEREOF,  the Plan and  Preferred  Life have,  by their  respective
officers,  executed  and  delivered  this  Reinsurance  Agreement  in  duplicate
effective from the date set out in Article II hereof.

                                    MDNY HEALTHCARE, INC.

Dated:      4/8/99                  By:     /s/
      -------------------              ----------------------------------------

Attest:                             Title:   Chief Financial Officer
       ------------------                 -------------------------------------

                  PREFERRED LIFE INSURANCE COMPANY OF NEW YORK

Dated:                              By:
      -------------------              ----------------------------------------

Attest:                             Title:
      -------------------              ----------------------------------------


                                       15
<PAGE>

                                ENDORSEMENT NO. 1

Endorsement of Policy No. 17055-036 ("Reinsurance  Agreement") between Preferred
Life Insurance  Company of New York  ("Preferred  Life") MDNY  Healthcare,  Inc.
("Plan") to provide  limited  coverage for certain Members of the Plan when they
can no longer  receive  benefits  because of insolvency  and  liquidation of the
Plan.

Definitions

1.    Receiver means any court or state appointed  supervisor or receiver of the
      Plan.
2.    Provider means a hospital, doctor or other health care provider.
3.    Insolvency  means  the  conditions  of  Article  VII  of  the  Reinsurance
      Agreement have been met, including that Plan operations have ceased.
4.    Plan Benefits means the contractual obligations of the Plan to its Members
      to insure costs for health services.
5.    Acute Care  Services  and Acute  Care are as  defined  in the  Reinsurance
      Agreement.
6.    Members means those Members with Membership Service  Agreements,  as those
      terms are defined in the Reinsurance Agreement,  for which, as of the date
      of insolvency,  1) reinsurance is applicable;  2) reinsurance  premium has
      been paid; and 3) premium has been paid to the plan.

Limitations

1.    There is no liability of Preferred Life under this  Endorsement  until and
      unless  all  conditions  of  Insolvency  in  Article  VII have  been  met,
      including the condition that Plan operations cease.

2.    This  Endorsement  provides  no benefits  for  creditors,  owners,  or the
      Receiver  of the Plan,  although  payment of Plan  Benefits  may be to the
      Receiver for transfer to the appropriate Provider payees.

3.    This Endorsement provides no benefits for services which are the legal, or
      direct or indirect contractual,  obligation of a Provider. As one example,
      this Endorsement provides no benefits for a service if the Provider or any
      entity  contracted  with a Provider (1) has been paid to provide  services
      for the  period in which the  service is  provided,  or (2) has a legal or
      contractual obligation to provide such service, whether or not payment has
      or will be received by the Provider.

4.    This  Endorsement  provides no benefits for services which are included in
      coverage provided by a state guaranty fund.

5.    This Endorsement provides no benefit for services to Plan insureds who are
      not Members as defined above.

6.    Liability of Preferred Life under the  Continuation of Benefits  Provision
      is limited to $5 million  dollars in the  aggregate  for  Commercial  HMO,
      Medicare and Point-of-Service combined.

Continuation of Benefits Provision

Upon the date the Plan is Insolvent, Preferred Life will provide the benefits in
A through D below, subject to the Limitations.


<PAGE>

A.    Preferred Life will continue Plan Benefits for Members who are confined in
      an Acute Care hospital on the date of  Insolvency,  beginning on such date
      and  continuing to the earlier of 365 days or until their  discharge,  and
      subject to the Limitations.

B.    Preferred Life will continue Plan Benefits for Members who are confined on
      the date of Insolvency in skilled nursing or rehabilitation facilities, if
      care in such  facilities  is rendered  concurrent  with and  incidental to
      Acute Care  Services.  Plan  Benefits for such  services will begin on the
      date of Insolvency  and continue until the earlier of 120 days or the date
      of discharge, and subject to the Limitations.

C.    Preferred Life will continue Plan Benefits for Members (other than Members
      subject to A or B above) from the date of Insolvency  through the contract
      period after Insolvency, but for not more than 60 days, and subject to the
      Limitations.

D.    For any Members who are Title XVIII Medicare enrollees.  A, B, and C above
      will  apply,  subject to the  further  limit that Plan  Benefits  will not
      extend  beyond the date such Member is  entitled  to coverage  under other
      Title XVIII provisions or any other federal program.

Conversion Coverage

Preferred Life will issue conversion coverage to Members, other than Members who
are Medicaid or Title XVIII  Medicare  enrollees,  who apply to Allianz Life for
conversion  coverage within 31 days of Insolvency.  The conversion coverage will
be that which is  customarily  issued to by  Preferred  Life at the then current
rates and of the type available for conversion.

Except as stated herein,  all terms and conditions of the Reinsurance  Agreement
remain unchanged.

The Effective Date of this Endorsement is January 1,1999.

                                            MDNY HEALTHCARE, INC.

Dated:    4/8/99                    By:     /s/
      -------------------              ----------------------------------------

                                    Title:  Chief Financial Officer
                                          -------------------------------------

                  PREFERRED LIFE INSURANCE COMPANY OF NEW YORK

Dated:                              By:
      -------------------              ----------------------------------------

                                    Title:
                                          -------------------------------------


                                       2
<PAGE>

                                ENDORSEMENT NO.2

Endorsement  between  Preferred Life Insurance  Company of New York (hereinafter
referred to as "Preferred Life") and MDNY Healthcare, Inc. (hereinafter referred
to as "Plan") Policy No. 17055-036.

The  following  provision  is hereby  made a part of the  Reinsurance  Agreement
between Preferred Life and Plan.

                        Out of Area Conversion Provision

      In the event that a Plan Member  moves  outside  the  Service  Area of the
      Plan, such Member, without evidence of insurability,  shall have the right
      of  conversion  for a period  of  thirty-one  (31)  days.  The  Conversion
      Coverage will be that which is customarily issued by Preferred Life at the
      then current rates and of the type available for conversion.

      Except as herein  stated,  all terms  and  conditions  of the  Reinsurance
      Agreement remain unchanged.

The Effective Date of this Endorsement is January 1, 1999.

                                    MDNY HEALTHCARE, INC.

Dated:                              By:
      -------------------              ----------------------------------------

                                    Title:
                                          -------------------------------------

                  PREFERRED LIFE INSURANCE COMPANY OF NEW YORK

Dated:                              By:
      -------------------              ----------------------------------------

                                    Title:
                                          -------------------------------------