Exhibit 10.1
                        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                                                             5
ARTICLE 9 AGGREGATE LIMIT                                                      5
ARTICLE 10 CO-PARTICIPATION                                                    6
ARTICLE 11 DEFINITIONS                                                         6
ARTICLE 12 NET RETAINED LINES                                                 12
ARTICLE 13 REINSURANCE PREMIUMS                                               13
ARTICLE 14 REINSURERS' MARGIN                                                 14
ARTICLE 15 CEDING COMMISSION                                                  15
ARTICLE 16 CURRENCY                                                           15
ARTICLE 17 TAXES                                                              16
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                                                      29
ARTICLE 35 COMPANY'S INTERESTS & LIABILITIES                                  29
ARTICLE 36 PARTIES TO THIS AGREEMENT                                          30
ARTICLE 37 ENTIRE AGREEMENT                                                   30
ARTICLE 38 INTERMEDIARY                                                       30
<PAGE>


                                    EXHIBITS


EXHIBIT A                                       INURING REINSURANCE

EXHIBIT B                                       INURING REINSURANCE

EXHIBIT C                                             WARRANTY

EXHIBIT D                                          MIX OF BUSINESS
EXHIBIT E                       NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -
                                      REINSURANCE - U.S.A. (NMA 1590) (BRMA 35A)
EXHIBIT F                 NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE -
                                      REINSURANCE - U.S.A. (NMA 1119) (BRMA 35B)
EXHIBIT G                   NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE)
                                        1984 (WORLDWIDE EXCLUDING U.S.A. AND
                                          CANADA) (NMA 1975) (BRMA 34B)
EXHIBIT H                    WAR RISKS EXCLUSION CLAUSE (REINSURANCE) (BRMA 56B)
EXHIBIT I                               INSOLVENCY FUNDS EXCLUSION CLAUSE
EXHIBIT J                    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"),
                GE FRANKONA RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
                                 Munich, Germany
                              (hereinafter "GEF"),
                          GE FRANKONA REINSURANCE LTD.
                                  London, U.K.
                          (hereinafter "GEF - London")
                                       and
                       GE SPECIALTY INSURANCE (U.K.) LTD.
                                 United Kingdom
                              (hereinafter "GESI")

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

                                       by

                   THE REINSURERS SUBSCRIBING THEIR RESPECTIVE
                   INTERESTS AND LIABIITIES CONTRACTS ATTACHED

           (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

                                        1

<PAGE>

2003Whole  Account Aggregate Excess of Loss Coverages Written by the Company for
Affiliated Companies,  all subject to the terms,  conditions,  and exclusions of
this Agreement.



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. If no agreement is reached on an adjustment to premium,  the Reinsurers
shall not be liable for any losses occurring and claims made arising out of such
additional affiliate(s).


                                    ARTICLE 2

                                      TERM

This Agreement shall apply to losses occurring and claims made during the period
commencing  on January 1, 2003 and  expiring on  December  31,  2003,  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
     Exhibits A and B  attached  hereto,  shall be in place at XXX% (X  percent)
     through  the entire Term of this  Agreement,  regardless  of their  renewal
     dates or so deemed.

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  as per Exhibit C attached
     hereto,  with the guidance of and review by the Intermediary.  This premium
     adjustment  will be based upon using the plan premium weights and plan loss
     ratios as shown in  Exhibit  C.  There  shall be no  change to  Reinsurance
     Premiums due to changing  premium weights or actual loss ratios as a result
     of this warranty. The Company and Reinsurers shall try to mutually agree to
     such premium adjustment.  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 ERC is fully authorized by GE Re, GEF, GEF-London
     and GESI to act as their  agent  with  respect  to all  matters  under this
     Agreement.

4.   The Company warrants that the maximum aggregation of property limit exposed
     per zone in respect of the Company's retrocession Subject Business shall be
     $XXX.X million.

5.   The   Company    warrants   that   the   Company's    loss   exposures   to
     Terrorism/Terrorist  Activity Loss shall be in  accordance/consistent  with
     the underwriting submission provided to the Reinsurers.


                                    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  E;

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

                                        3
<PAGE>

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 G;

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

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

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

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

G.   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.

H.   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).

I.   Life insurance and life reinsurance liability,  except as provided for Life
     Catastrophe Loss, as defined in Article 11.


                                    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"),  subject to
a minimum Aggregate Retention of $X,XXX.XXX million.

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.

                                        4

<PAGE>

                                    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  the
Co-Participation in Article 10, and subject in all cases to the following limits
and  retentions  for the following  three layers of coverage  (collectively  the
"Coverage Layer Limits"):

Layer 1 - The limit for the first  layer of  coverage  ("Layer  1") shall  equal
X.XX% (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.

Layer 2 - The limit for the second  layer of  coverage  ("Layer  2") shall equal
XX.XX% (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
XX.XX% (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.


                                    ARTICLE 9

                                 AGGREGATE LIMIT

The maximum amount for which the Reinsurers  shall be liable  hereunder shall be
the lesser of XX.XX% (X point X percent) of Subject Net Earned Premium,  subject
to the  Co-Participation  in Article 10, or $X,XXX.XXX  million (the  "Aggregate
Limit").

Not  withstanding  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 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.XX% (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:

the result of X.XX minus  ($X,XXX.XXX  million  divided  by actual  Subject  Net
Earned  Premium)  applied to each limit of Coverage and to the XX.XX% (X point X
percent)  of Subject  Net Earned  Premium in respect of the  Aggregate  Limit in
Article 9.

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,  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  ("ERC"),  GE
     Reinsurance       Corporation       ("GE      Re"),       GE       Frankona
     Ruckversicherungs-Atkiengesellschaft, Munich, Germany, ("GEF"), GE Frankona
     Reinsurance Limited, London, UK ("GEF - London") and GE Specialty Insurance
     (UK) Ltd.,  United  Kingdom  ("GESI") 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  and is  authorized  to sign on  behalf  of each
     Company Member.

D.   "Company  Plan  Shock  Loss  Ultimate  Net Loss" - Company  Plan Shock Loss
     Ultimate Net Loss shall equal 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 Company  only SNEP;  plus
     3) X.XX% (X point X percent) of GE Re only SNEP;  plus
                                        6

<PAGE>


     4)   X.XX% (X point X percent) of GEF-  London and GESI net earned  premium
          combined.

E.   "Defense and Cost  Containment  Expense" - as used in this Agreement  shall
     mean     all      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" - as used in this  Agreement
     shall mean  Subject  Ultimate  Net Loss from any one  property  per risk in
     excess of $XX.X million 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.
                                        7

<PAGE>


J.   "Life Catastrophe Loss" - as used in this Agreement shall mean Ultimate Net
     Loss net of inuring reinsurances emanating from liabilities recorded by the
     Company and/or Affiliated  Companies in respect of a Loss Event, as defined
     in the  underwriting  submission,  where the Company's share of such losses
     aggregate to at least $XX.X million.  Coverage hereunder is also subject to
     a maximum any one life Ultimate Net Loss of $X.X million.

K.   "Net  Reinsurance  Premiums"  - as used in this  Agreement  shall  mean Net
     Reinsurance Coverage Limit Premiums,  plus interest thereon from January 1,
     2003 through the date of payment at an effective  annual  interest  rate of
     X.X% (X point X  percent),  plus Net Shock  Loss  Premiums,  plus  interest
     thereon  from  January 1, 2003  through the date of payment at an effective
     annual interest rate of X.X% (X point X percent).

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

M.   "Non-Shock Loss Subject  Ultimate Net Loss for GE Re, GEF, GEF - London and
     GESI Limitation"-  Non-Shock Loss Subject Ultimate Net Loss for GE Re, GEF,
     GEF-London and GESI combined shall be limited to the sum of the following:

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

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

     3)   Plan  Non-Shock  Loss  Subject  Ultimate Net Loss for GEF - London and
          GESI  combined  of XX.XX% (X point X percent) of GEF - London and GESI
          combined underlying SNEP; plus

     4)   $XXX.XXX million.

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

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

     1)   X.XX% (one point seven nine percent) of ERC only SNEP; plus
     2)   X.XX% (six point six one percent) of GEF (Germany) only SNEP; plus
     3)   X.XX% (two point three six 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)   $X.X million in respect of First Specialty Insurance Corporation; plus

                                        8

<PAGE>

     7)   X.XX% (X point X  percent)  in  respect  of GEF - London and GESI SNEP
          combined; plus
     8)   $X.X million in respect of GEF-Copenhagen.

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

P.   "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.

Q.   "Property  Catastrophe  Loss"  - as  used in  this  Agreement,  shall  mean
     property losses recorded by the Company and/or  Affiliated  Companies which
     losses  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.

R.   "Shock Loss" - as used in this  Agreement  shall mean a loss emanating from
     Terrorism/Terrorist   Activity,   Property   Catastrophe   Loss,   Workers'
     Compensation Catastrophe Loss, Life Catastrophe Loss and Large Property Per
     Risk Ultimate Net Loss.

S.   "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.XX% (X point X percent) of the SNEP of the Company.

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

     4.)  Terrorism/Terrorist Activity Loss shall be limited in the aggregate to
          XX.XX% (X point X percent) of the SNEP of the Company.

     5.)  Life  Catastrophe  Loss shall be limited in the aggregate to X.XXX% (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.

     T.   "Statutory  Penalties"  - as used in this  Agreement  shall mean fines
          imposed by statutes or laws or related regulations.

                                        9

<PAGE>


     U.   "Subject  Net Earned  Premium"  or "SNEP" - as used in this  Agreement
          shall  mean  the  net  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
          this 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 GEF related to the 2003 Whole  Account  Aggregate
          Excess of Loss  Coverages  Written by the Company  for the  Affiliated
          Companies provided by ERC and GEF to Affiliated Companies shall not be
          included  in the  calculation  of  Subject  Net Earned  Premium.  Life
          Insurance and Life  Reinsurance  business  premiums  shall be excluded
          from Subject Net Earned Premium.

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

     V.   "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 Policy Limits, to
          the extent  permitted by law,  and XXX% (X percent) of  liability  for
          Extra  Contractual  Obligations,  to  the  extent  permitted  by  law,
          emanating from underlying contracts of the Company's clients.  Subject
          Ultimate  Net Loss  shall  include  Ultimate  Net Loss  assumed by the
          Company  under  the  2003  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.

     W.   "Terrorism/Terrorist  Activity  Loss"- as used in this Agreement shall
          mean the following:

          1.   In respect of U.S. losses, a  Terrorism/Terrorist  Activity Loss,
               for purposes of this  Agreement,  shall be defined by the current
               definition of Terrorism Risk Insurance Act of 2002 as of the date
               of this Agreement as follows:

                  "Section 1.02(1) defines an act of terrorism for purposes of
the Act Section 102(1)(A) states, "The term "act of terrorism" means any act
that is certified by the Secretary, in

                                        10

<PAGE>

concurrence  with the secretary of State, and the Attorney General of the United
States - (i) to be an act of terrorism;  (ii) to be a violent act or an act that
is dangerous to - (I) human life; (II) property; or (III) infrastructure;  (iii)
to have  resulted in damage within the United  States,  or outside of the United
States in the case of - (I) an air  carrier  or vessel  described  in  paragraph
(5)(B);  or (II) the premises of a United States mission;  and (iv) to have been
committed by an individual or individuals acting on behalf of any foreign person
or foreign interest,  as part of an effort to coerce the civilian populations of
the United States or to influence the policy or affect the conduct of the United
States  Government by coercion."  Section  1.02(1)(B)  states,  "No act shall be
certified by the  Secretary as an act of terrorism if - (i) the act is committed
as part of the course of a war declared by the Congress, except that this clause
shall not apply with respect to any coverage for workers' compensation;  or (ii)
property and casualty insurance losses resulting from the act, in the aggregate,
do  not  exceed  $X,XXX,XXX."  Section  1.02(1)(C)  and  (D)  specify  that  the
determinations  are  final  and not  subject  to  judicial  review  and that the
Secretary of the Treasury cannot delegate the determination to anyone."

          2. In respect of non-U.S. losses, a Terrorism/Terrorist Activity Loss,
     for purposes of this Agreement,  shall be defined as an act,  including but
     not limited to, the use of force or violence and/or the threat thereof,  of
     any person or group(s) of persons,  whether acting alone or on behalf of or
     in connection  with any  organization(s)  or  government(s),  committed for
     political,  religious,  ideological  or  similar  purposes,  including  the
     intention  to influence  any  government  and/or to put the public,  or any
     section of the public, in fear.

          Terrorism/Terrorist  Activity  Loss  includes  loss,  damage,  cost or
     expense of whatsoever  nature directly or indirectly  caused by,  resulting
     from or in  connection  with any action taken in  controlling,  preventing,
     suppressing, or in any way relating to any act of terrorism.

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

     Y.   "Ultimate  Net  Loss"  - as  used in this  Agreement  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 2003  Whole
          Account  Aggregate Excess of Loss Coverages Written by the Company for
          the Affiliated Companies.

     Z.   "2003 Whole Account  Aggregate Excess of Loss Coverages Written by the
          Company for the Affiliated  Companies" as used in this Agreement 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:

                                        11


<PAGE>

<TABLE>
<CAPTION>


                                  In Millions                                                In Millions

                                                                                              Estimated
                                                         Estimated               Ultimate Net  Ultimate Net
                                    Aggregate              Net                   Loss Ratio      Loss
                                    Limit                 Earned                 Aggregate     Aggregate
          Affiliated Company        Amounts               Premium                Retention     Retention
          ------------------      -------               --------------------------------     ----------
          <S>                        <C>                 <C>                        <C>           <C>

          Westport Ins. Corp.        xx.xx               xxx.x                      xx.x%         xxx.x
          GEF - Copenhagen           xx.xx               xxx.x                      xx.x%          xx.x
          Medical Protective Co.     xx.xx               xxx.x                      xx.x%         xxx.x
          Coregis Insurance Co.      xx.xx                xx.x                      xx.x%          xx.x
          First Specialty Ins. Corp. xx.xx                xx.x                      xx.x%          xx.x
</TABLE>

     AA.  "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 2003 Whole  Account  Aggregate  Excess of Loss  Coverages
          Written by the Company for Affiliated Companies is limited as follows:

<TABLE>
<CAPTION>
                                                                                 In Millions
                  Affiliated Company                                                UNL
----------------------------------------------------------------------------------------------------------------------
                  <S>                                                              <C>

                  Coregis Insurance Company                                        $xx.x
                  Westport Insurance Corp.                                         $xx.x
                  First Specialty Insurance Corp.                                  $xx.x
                  GEF-Copenhagen                                                   $xx.x
</TABLE>

     BB.  "Workers'  Compensation  Catastrophe Loss" - as used in this Agreement
          shall mean 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.


                                   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

                                        12

<PAGE>


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  (hereinafter the "Net Reinsurance
          Coverage Limit Premiums"),  plus interest thereon from January 1, 2003
          through the date of payment at an effective  annual  interest  rate of
          X.X% (X point X percent).  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% (one point seven nine  percent)  of the  Aggregate  Limit,
          subject to a minimum Net  Reinsurance  Coverage Limit Premium equal to
          $XX.XX  million,  plus XX.XX% (X point 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.XX million.

          Layer 2 - The Net Reinsurance Coverage Limit Premium for Layer 2 shall
          equal XX.X% (X point 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 - If all lines of business excluding Life, Accident and Health
          and Personal Accident Business combined  Terrorism/Terrorist  Activity
          Loss aggregate  Subject Ultimate Net Loss is less than or equal to the
          greater of $XXX.X  million  or XX.XX% (X point X  percent)  of Company
          SNEP,  then the Net  Reinsurance  Coverage  Limit  Premium for Layer 3
          shall  equal XX.X% (X point 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 the  lesser of X.XX% (X point X percent)
          of SNEP or $XXX.XXX million. Otherwise, Net Reinsurance Coverage Limit
          Premium  for Layer 3 shall  equal XX.X% (X point 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 the lesser of
          X.X% (X point X percent) of SNEP or $XXX.XXX million.

          Within 45 (forty five) days from the end of each calendar quarter, the
          Company shall  calculate  and pay to the  Reinsurers  Net  Reinsurance
          Coverage Limit  Premiums,  plus interest  thereon from January 1, 2003
          through the date of payment at an effective  annual  interest  rate of
          X.X% (X point X percent).

     B.   Net Shock Loss  Premiums  - The  Company  shall pay to the  Reinsurers
          premiums for Shock Losses  (hereinafter the "Net Shock Loss Premiums")
          equal to X.X% (X point X  percent)  of Shock  Loss in excess of $XXX.X
          million, subject to a maximum Net Shock Loss Premium of $XX.X million,
          plus interest  thereon at an effective  annual rate of X.X% (X point X
          percent)  from  January  1, 2003  through  the date of  payment to the
          Reinsurers.

                                        13

<PAGE>

          Notwithstanding  the above,  if all lines of business  excluding Life,
     Accident   and   Health   and   Personal    Accident    Business   combined
     Terrorism/Terrorist  Activity  aggregate  Subject  Ultimate  Net  Loss  are
     greater than $XXX.X  million or XX.XX% (X point X percent) of Company SNEP,
     then Net Shock Loss Premiums shall be X (X dollars).

          The Company shall  determine and pay to the  Reinsurers Net Shock Loss
     Premiums, plus interest from January 1, 2003 through the date of payment at
     an effective  annual  interest rate of X.X% (X point X percent),  45 (forty
     five) 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.XX million.

          However,  should this Agreement be commuted on or before  December 31,
          2003, then the Reinsurers  shall return to the Company XX% (X percent)
          of the  Initial  Reinsurers'  Margin by January 5, 2004.  Should  this
          Agreement  be  commuted  on or  before  December  31,  2004,  then the
          Reinsurers  shall  return to the  Company  XX% (X  percent) of Initial
          Reinsurers'  Margin by January 5, 2005. If this  Agreement is commuted
          after January 1, 2005,  then the  Reinsurers  shall retain all Initial
          Reinsurers' Margin and there shall be no return due the Company.

     B.   Additional  Reinsurers'  Margin -The  Reinsurers  shall be entitled to
          Additional  Reinsurers'  Margin  equal to the  product of  multiplying
          X.XX% (X point X percent)  to the result of Net  Reinsurance  Coverage
          Limit  Premiums  for Layer 1,  less  X.XX% (X point X percent ) of the
          Aggregate Limit.

          The Reinsurers shall also be entitled to Additional Reinsurers' Margin
          equal to X.XX% (X point X percent) of Net  Reinsurance  Coverage Limit
          Premiums for Layer 2 only.

          Such Additional  Reinsurers' Margin shall be calculated by the Company
          quarterly 45 (forty five) days in arrears of each calendar quarter end
          and paid 90 (ninety)  days in arrears of each  calendar  quarter  end.
          Additional  Reinsurers' Margin shall equal the Additional  Reinsurers'
          Margin  calculated  for the  respective  quarter  less any  Additional
          Reinsurers' Margin previously paid, if any.

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

          There  shall be no return of any  Additional  Reinsurers'  Margin upon
          commutation at any time.

                                        14

<PAGE>


          The Company shall pay Additional Reinsurers' Margin due, if any, along
          with interest at an effective annual interest rate of X.XX% (X point X
          percent) from January 1, 2003 through the date of payment.

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



                                   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.  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

                                        15

<PAGE>

          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.

     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,  2003,  within  45 (forty  five)  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  each   Company   Member  and  each
                    Affiliated Company

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

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

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

               5.   Net Earned Premium for each Affiliated Company

               6.   Subject Net Earned Premium for each Company Member

          B.   Reinsurance Premiums

               1.   Net Reinsurance Coverage Limit Premiums

               2.   Net Shock Loss Premiums

               3.   Ceding Commission

               4.   Initial Reinsurers' Margin

                                        16

<PAGE>


               5.   Additional Reinsurers' Margin

     2.   Premium Settlements - Within 45 (forty five) days from the end of each
          calendar  quarter,   the  Company  shall  calculate  and  pay  to  the
          Reinsurers Gross Reinsurance Premiums.

     3.   Annual  Reports  -  Starting  with  December  31,  2003  and  annually
          thereafter,  within 45 (forty five) 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 each  Company  Member 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 15 (fifteen) days of
receipt of the report by the Reinsurers or 45 (forty five) 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
Reinsurers,  subject to all terms,  conditions

                                        17

<PAGE>

and  exclusions  of  this  Agreement.  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; less

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

               5)   Any Commutation settlement, per Article 25; plus

                                        18

<PAGE>

               6)   Additional Consideration.

          Beginning  with the calendar  quarter  ending  December 31, 2003,  the
          Reinsurers  shall  calculate  and report the  balance of the  Notional
          Profit Sharing Account to the Company within 45 (forty five) 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 (X point 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 compliant  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, GEF, GEF-London or GESI; or

               2.   A loss of Combined GAAP Equity  ($XX.XXX  billion GECS GAAP,
                    as per GECS method of accounting), (not SEC GAAP), in excess
                    of XX% (X percent) in total for the combined  Companies from
                    December 31, 2002.

               3.   A downgrade by A.M. Best to an "A-" or below for any of ERC,
                    GE Re, GEF, GEF-London or GESI.

          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.


                                   ARTICLE 21

                            ADDITIONAL CONSIDERATION

At the end of each calendar quarter, the Notional Profit Sharing Account will be
credited by the Company with Additional  Consideration determined by multiplying
the average daily balance of

                                        19

<PAGE>


the Notional  Profit Sharing  Account during the calendar  quarter by X.XXXX% (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  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

                                        20

<PAGE>

         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 Shock Loss Premiums, including interest on such amounts as specified in
     the relevant clauses,  Initial Reinsurers' Margin,  Additional  Reinsurers'
     Margin,  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.

     B.   Notwithstanding  the above,  the Reinsurers  may elect  Commutation 1)
          after December 31, 2017, 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

                                        21

<PAGE>

          2) for any reason on or after December 31, 2027.  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% (X point X percent) annual discount rate and
               to be determined 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 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

                                        22

<PAGE>

     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.  The decision of the independent actuarial firm shall
     be binding upon both parties.

     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.  Such rights shall  continue as long as either party hereto has a
     claim against the other arising out of this Agreement.


                                   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

                                        23

<PAGE>

     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.

     E.   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 single  arbitrator or tribunal  shall make its decision based upon
          this  Agreement  giving due regard to the customs and practices of the
          insurance and  reinsurance  industries,  provided,  however,  that the
          terms of this  Agreement are to be construed in an evenhanded  fashion
          as between the Company and Reinsurers.  Without limitation,  where the
          language of this  Agreement  is deemed to be  ambiguous  or  otherwise
          unclear, the issue will be resolved in the manner most consistent with
          the relevant  terms  without  regard to  authorship  of the  language,
          without any presumption or arbitrary interpretation or construction in
          favor of either the Company or the Reinsurers  and in accordance  with
          the intent of the parties.

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

                                        25

<PAGE>


     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  achieve a X.X% (X point X  percent)  effective
     annual  yield in 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 ceded  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)   to reimburse  the Reinsurer for any sum which is in excess of the
               actual  amount  required  to pay  the  Reinsurers'  share  of any
               liability under this Agreement.

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

                    a)   Subject  Ultimate  Net  Losses  and  Defense  and  Cost
                         Containment  Expenses  paid  by the  Company,  but  not
                         recovered from the Reinsurers;

                    b)   reserves for Subject  Ultimate Net Losses  reported and
                         outstanding;


                                        27

<PAGE>

                    c)   reserves for Subject  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.

     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 - Actual  costs of the Letter of Credits up to
               XXX (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 (XX)
               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, GEF,  GEF-London and GESI
     shall be split  into  Short  Tail,  Medium  Tail,  and Long  Tail  expected
     premiums and loss categories as per Exhibit D 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  column) 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
     "Medium", or "Long" categories, then either party may request an adjustment
     to Net  Reinsurance  Coverage  Limit  Premiums  to  maintain  the  economic
     position had such change in mix of business not  occurred.  [The  requested
     change  will be based  solely on the actual  premium  weights and plan loss
     ratios  applied to the estimated  payment

                                        28

<PAGE>


     patterns  shown in Exhibit D. 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 the
     Intermediary or an independent third party, 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.


                                   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  including,  but not  limited  to, the  Company's
     obligations under this Agreement for payment of premiums.

                                   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

                                        29

<PAGE>

     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 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.

                                        30

<PAGE>





                       INTERESTS AND LIABILITIES AGREEMENT


                                     to the

                                  WHOLE ACCOUNT
                      AGGREGATE EXCESS OF LOSS RETROCESSION
                              REINSURANCE AGREEMENT
                            Effective January 1, 2003

            (hereinafter referred to as the "Reinsurance Agreement")

                                     between

                       EMPLOYERS REINSURANCE CORPORATION,
                           GE REINSURANCE CORPORATION,
                GE FRANKONA RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT,
                          GE FRANKONA REINSURANCE LTD.
                                       AND
                       GE SPECIALTY INSURANCE (U.K.) LTD.

             (hereinafter referred to collectively as the "Company")

                                       and

                                    XL RE LTD

            (hereinafter referred to as the "Subscribing Reinsurer")



     It is hereby mutually  agreed that the  Subscribing  Reinsurer shall have a
     XX% (X percent) share in the interests and  liabilities as set forth in the
     captioned  Reinsurance  Agreement.  The share of the Subscribing  Reinsurer
     shall be several and not joint with any other  reinsurer  participating  in
     the Reinsurance  Agreement and the Subscribing  Reinsurer shall be separate
     and  apart  from the  shares  of any  other  participating  reinsurer.  The
     Subscribing  Reinsurer  shall in no event  participate in the interests and
     liabilities  of  the  other   reinsurer.   It  being  understood  that  the
     Subscribing Reinsurer, at its sole discretion,  may elect to exercise or to
     refrain  from  exercising  any rights,  privileges,  remedies or options to
     which it shall be entitled under the Reinsurance Agreement, irrespective of
     the  actions  taken  or not  taken,  as  the  case  may  be,  by any  other
     participating reinsurer.

     In no event  shall the  Subscribing  Reinsurer  be  required  to obtain the
     agreement, consent or concurrence of any other participating reinsurer with
     respect to the performance or non-performance by the Subscribing  Reinsurer
     with respect to any term, condition, limitation or other

<PAGE>


     restriction  set  forth  in  the  Reinsurance   Agreement,   including  any
     modification, amendment or change to the Reinsurance Agreement to which the
     Company and the Subscribing Reinsurer may agree.


     This Interests and  Liabilities  Agreement shall be effective as of January
     1, 2003 and shall terminate in accordance with the terms of the Reinsurance
     Agreement.


     In Witness  Whereof,  the parties  hereto have  caused this  Interests  and
     Liabilities  Agreement to be signed in triplicate by their duly  authorized
     representatives.


     Signed this 30 day of September  2003,  For and on behalf of the Company by
     Employers Reinsurance Corporation

     By:  /s/ Jeffrey J. Cooper

     Title: Vice President



     Signed this 25 day of September 2003,
     For  and on behalf of XL Re Ltd

     By:  /s/ Daniel L. Sussman

     Title: EVP



<PAGE>



                                    EXHIBIT E

                        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.

          III. Under any  Liability  Coverage,  to


<PAGE>

               (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 F

                       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
     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.


<PAGE>

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 G

            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 H

              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 I

                        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 J

               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 exluded, 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 therin,  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).

<PAGE>

























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).