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                                                                  Exhibit 10.22



                        [LETTERHEAD OF ANNUITY & LIFE RE]



September 4, 2002
(as revised December 19, 2002)

Michael H. Choate
c/o Annuity and Life Re America, Inc.
280 Trumbull Street
Hartford, CT 06103
USA

RE: RETENTION AGREEMENT

Dear Michael:

         The Board of Directors of Annuity and Life Re (Holdings), Ltd. ("ANR")
is currently exploring the possibility of a significant capital raising or other
strategic transaction. Because you are an important part of the management and
professional team of ANR and/or one or more of its subsidiaries (collectively,
the "Company"), the Board of Directors of ANR has determined that it is in the
best interests of ANR and its shareholders to offer you appropriate incentives
to continue to focus on the business of the Company during this period while a
transaction is being considered. As used in this letter agreement, the term
"Change in Control" shall have the meaning set forth in ANR's Restricted Stock
Plan.

         In consideration of your continued employment with the Company, the
Company hereby offers, and you, intending to be legally bound, hereby accept,
the following modifications to your employment arrangements with the Company:

         1.       Your base salary shall be $140,000, effective as of September
                  1, 2002.

         2.       The Company shall pay you a retention bonus of $45,000 (the
                  "Retention Bonus"). $15,000 of the Retention Bonus was paid to
                  you in September 2002, with the balance to be paid on the
                  earlier of May 31, 2003 or the occurrence of a Change in
                  Control (such date, the "Bonus Date"), so long as you are
                  still an employee of the Company on the Bonus Date; provided,
                  however, that if your employment with the Company is
                  terminated before the Bonus Date, then you

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                  shall immediately repay to the Company the portion of the
                  Retention Bonus already paid and you further acknowledge that
                  you will not be eligible to receive the balance of the
                  Retention Bonus.

         3.       ANR shall grant you 15,000 restricted common shares (the
                  "Restricted Shares") pursuant to the ANR Restricted Stock
                  Plan. The Restricted Shares shall vest in three equal annual
                  installments commencing on September 30, 2003; provided,
                  however, that, if there is a Change in Control, all such
                  Restricted Shares shall immediately vest in accordance with
                  Section 11 of the Restricted Stock Plan.

         You acknowledge and agree that nothing contained herein shall
constitute a contract of employment, and your employment with the Company may be
terminated at any time, with or without cause, at the option of either the
Company or yourself, with or without notice.

         Please sign below to indicate that you acknowledge and agree to the
terms and conditions set forth in this letter agreement.

                                       By: /s/ Frederick S. Hammer
                                          _____________________________________
                                       Name:  Frederick S. Hammer
                                       Title: Chairman of the Board of Directors

I hereby acknowledge and agree to the terms and conditions set forth in this
letter agreement.

By: /s/ Michael H. Choate
    ________________________________
Name: Michael H. Choate