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                                                                  Exhibit 10.71

                UNDERWRITING MANAGEMENT AGREEMENT - VSCI1996-8

         This Agreement, entered into on the 1st day of September, 1996 (the
"Agreement") by and between Virginia Surety Company, Inc., an Illinois
corporation ("Company") and RISCORP Management Services, Inc., a Florida
corporation ("Agent").

                                   PREAMBLES

         WHEREAS, the Company desires to appoint Agent as its agent for
performing responsibilities set forth in this Agreement; and

         WHEREAS, the Agent desires to perform such responsibilities;

         NOW, THEREFORE, the Company and Agent, in consideration of the mutual
promises herein contained and for other good and valuable consideration, the
receipt and sufficiency whereof is hereby acknowledged, agree as follows:

         1.  APPOINTMENT,

         1.1 APPOINTMENT. The Company does hereby nominate, constitute and
appoint Agent as its agent for (i) the soliciting, issuing, underwriting and
servicing of the Company's insurance policies classified in the schedule
attached hereto as Exhibit A (such insurance and any policies, contracts,
binders, endorsements, certificates or agreements of insurance, individually
and collectively, will be referred to as "Policy" or "Policies" hereunder) and 
(ii) for the servicing of the Quota Share Reinsurance Agreement (Quota Share), 
attached to this Agreement, between the Company and its Quota Share Reinsurer. 

         1.2 AUTHORITY. Agent is authorized to: 

             1.2.1 Issue Policies subject to (i) the scope and limits granted in
the schedule attached hereto as Exhibit A; (ii) the terms and conditions
(including exclusions) of any Policies issued, underwritten, or serviced
pursuant to this Agreement; (iii) the execution of the Quota Share between the
Company and its Quota Share Reinsurer before binding any Policies (iv) the
terms and 

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conditions of the Quota Share; (v) applicable state insurance laws, rules, and
regulations; (vi) the underwriting policies, rules and guidelines of the Company
as set forth in Exhibit B hereto or as otherwise provided from time to time by
the Company; (vii) the Company's ultimate right to veto the underwriting and
issuing of any Policy by Agent; (viii) the Company's ultimate right to cancel
any Policy subject to applicable governmental regulatory requirements for
cancellation and non-renewal; (ix) the Company's ultimate right to veto the
appointment by Agent of any agent or broker, and the ultimate power of the
Company to cancel any such agency pursuant to Section 1.2.7; (xi) the Company's
right to approve all advertising with respect to the Policies in which Company's
name is used.

         1.2.2 Collect, account and receipt for and pay premiums on Policies
Agent writes on behalf of Company in accordance with Sections 1.2.3, 4 And 7,
and, as full compensation, to retain commissions out of premiums so collected in
amounts as specified in the schedule attached hereto as Exhibit A.  Agent agrees
that all premiums, including return premiums received by Agent, are Company's
property.

         1.2.3 Hold all premiums, including return premiums received by Agent in
a fiduciary capacity for Company in accordance with Section 4.1.14.

         1.2.4 Exercise Agent's authority through authorized employees of Agent
or its affiliates.

         1.2.5 Represent other companies.

         1.2.6 Exercise exclusive and independent control of Agent's time and
conduct.

         1.2.7 Appoint agents and producers after assuring that the agent or
producer is lawfully licensed to transact the type of insurance for which he is
appointed and is not serving on  


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Company's or Agent's Board of Directors.

             1.2.8 Terminate agents and producers.

         1.3 PERFORMANCE. Agent hereby accepts the foregoing appointment and
agrees faithfully to perform the duties thereof in a professional manner as an
agent of the Company and to obey promptly such reasonable instructions as it may
receive from time to time from the Company in accordance with this Agreement.

         1.4 FAILURE OF PERFORMANCE. If the Agent materially breaches this
Agreement, the Company may, as one remedy but not as an exclusive remedy,
require its own employees or designated representatives to carry out the Agent's
duties hereunder. Agent shall reimburse the Company for the Company's reasonable
expenses, including salaries, incurred for having its employees or
representatives perform such duties, or, at the Company's option, shall pay such
employees or representatives directly. Such reimbursement or direct payments
shall be made by Agent within five (5) days after the Agent's receipt of
invoices of such expenses. For purposes of this Agreement a material breach
shall not have occurred until Agent has received written notice of the grounds
of the breach and has failed to cure the breach within thirty (30) days after
receiving written notice.

         2. TERRITORY.
         Agent's authority to solicit, issue, underwrite or service Policies
extends only to insureds or prospective insureds located in the states specified
in Exhibit A hereto, subject to the applicable licensing authority of the
Company, the Company having made and received approval of all necessary
regulatory filings and to Agent's obtaining licenses wherever required for
activities conducted by Agent pursuant to this Agreement. Agent hereby agrees to
obtain such licenses and the Company at its sole discretion may revoke Agent's
authority as regards any particular insured or 

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prospective insured.

         3.  REPRESENTATIONS AND WARRANTIES.

         3.1 REPRESENTATIONS AND WARRANTIES OF AGENT. On the date hereof, during
the term of this Agreement, and for any period described in Section 10.5.1,
Agent hereby represents and warrants to Company as follows:

             3.1.1 LAWS AND LICENSES. Agent has and will comply with all
applicable laws, rules and regulations (including but not limited to providing
current copies of agent's or broker's license to be maintained in Company's
records, request of and proof of agent or broker background reports and Company
appointment of all agents where applicable) and shall, whenever necessary,
obtain and maintain at its own expense all licenses required for it to perform
this Agreement.

             3.1.2 NO BREACH. This Agreement is a valid and binding obligation
of Agent. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, will not breach or conflict with Agent's
by-laws or Articles of Incorporation, or with any agreement, covenant, or
understanding (oral or written) to which Agent is bound, and will not
adversely affect the application for issuance or the validity of any license of
the Agent.

             3.1.3 STATUS. Agent is a duly organized and validly existing
corporation in the State of Florida.

             3.1.4 AUTHORIZATION. The execution, delivery, and performance of
this Agreement by Agent has been duly and properly authorized by it.

         3.2 REPRESENTATIONS AND WARRANTIES OF COMPANY. On the date hereof, 
during the term of this Agreement, and for any period described in Section 
10.5, Company hereby represents and warrants to Agent as follows:
 

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               3.2.1 LAWS AND LICENSES. Company has and will comply with all
applicable laws, rules and regulations and shall, whenever necessary, obtain and
maintain at its own expense all licenses required for it to perform this
agreement.

               3.2.2 NO BREACH. This Agreement is a valid and binding obligation
of Company. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, will not breach or conflict with Company's
by-laws or Articles of Incorporation, or with any agreement, covenant, or
understanding (oral or written) to which Company is bound, and will not
adversely affect the application for issuance or the validity of any license of
the Company.

               3.2.3 STATUS. Company is a duly organized and validly existing
corporation in the State of Illinois.

               3.2.4 AUTHORIZATION. The execution, delivery, and performance of
this Agreement by Company has been duly and properly authorized by it.

        4.  DUTIES AND RESPONSIBILITIES.

        4.1 GENERAL. Subject to the Company's supervision and
instructions, Agent agrees to perform the following duties and services in
addition to those otherwise enumerated in this Agreement:

            4.1.1 Agent acknowledges that Company intends for each Policy
issued hereunder to be reinsured under the Quota Share. Company hereby approves
payment of reinsurance premiums to and collections from the Quota Share pursuant
to its terms and conditions.

            4.1.2 Solicit, underwrite, issue, secure proper countersignatures
when required by applicable laws and service Policies on behalf of the Company.

            4.1.3 Cancel Policies issued or underwritten by Agent  

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in accordance with the terms of the Policies and applicable state regulations.

               4.1.4 Issue Policies only on forms approved by the Company and
filed with and approved by regulatory authorities wherever such filing and
approval is required, unless such forms are modified with the prior written
consent of the Company.

               4.1.5 Investigate and settle claims as provided in Section 5
below and establish reserves for such claims.

               4.1.6 Maintain at Agent's expense data processing systems and
equipment, an office or offices and a staff of employees sufficient in number
and qualifications to perform the duties set forth in this Agreement. 

               4.1.7 Underwrite and issue policies in accordance with the
premium rates and underwriting criteria and guidelines as defined in Exhibit B
hereto (or as may be modified from time to time as agreed upon by Company and
agent).

               4.1.8 Perform Agent is responsibilities under Section 7 of this
agreement.

               4.1.9 Pay to Company a policy-issuing fee of 6% of gross net
written premiums, as defined in the schedule attached hereto as Exhibit A, on
all Policies issued under the terms hereof processed in accordance with Section
7.1. The policy-issuing fee is subject to a minimum monthly payment of $5,000
and minimum annual payment of $120,000. The minimum annual policy-issuing fee
will be balanced against the actual annual policy-issuing fee received by the
Company forty five (45) days after expiration of this Agreement. Any additional
amounts due the Company shall be remitted sixty days after the expiration of
this Agreement. In addition, the Agent shall reimburse the Company for
all taxes, fees, assessments and residual market loads of any kind imposed upon
Company pursuant to any law or regulation as a result of the 

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policies issued under the terms of this Agreement. Taxes, fees, assessments and
residual market loads will be adjusted annually utilizing December 31st figures
until all applicable taxes, fees, assessments or residual market loads have been
paid by the Company.

               4.1.10 Pay to Company any fines imposed by regulatory
authorities, taxation authorities, their agents for data collection and advisory
organizations providing loss cost and policy forms due to late filing or poor
quality of data provided by Agent in accordance with Section 7.3.2.

               4.1.11 Pay to Company any fines imposed by regulatory authorities
upon Company due to the use of unapproved forms or rates by Agent or due to
other market conduct violations caused by Agent's conduct.

               4.1.12 Maintain separately for Company and each other insurer
with which Agent does business, complete and current records and accounts,
including underwriting files, which Agent shall retain in accordance with
Section 8 and any applicable laws.

               4.1.13 Refund within sixty (60) days of the end of each calendar
month, return commissions on Policy cancellations or premium reduction, in each
case at the same rate at which such commissions were originally retained.

               4.1.14 Hold all monies, including premiums, return premiums and
reinsurance monies received by Agent, in a fiduciary capacity for Company.
Except as otherwise authorized by this Agreement, Agent shall maintain such
monies in a separate and segregated bank account in a bank that is a member of
the Federal Reserve System and is insured by the Federal Deposit Insurance
Corporation. This account shall not be used for any purpose other than payments
to or on behalf of Company. Any investment income produced from this bank
account shall vest and become the property of Agent. 


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             4.1.15 Comply with all regulatory requirements including, but not
limited to, the cancellation, nonrenewal, or conditional renewal of policies.

             4.1.16 Return upon demand after termination of this Agreement,
all unused Policies, forms, and other property furnished to Agent by Company.
Such items remain the property of Company. Agent shall fully cooperate with and
assist Company in recovering such items from third parties, if any.

         5.  CLAIM SETTLEMENT AUTHORITY

         5.1 CLAIMS. Agent shall investigate, negotiate and settle all policy
claims or losses on behalf of the Company; however, agent shall obtain the prior
approval of the Company before settling any policy claim or loss which is in
excess of One Hundred Thousand Dollars ($100,000.00) gross incurred loss. Agent
shall determine coverage for claims, however, agent shall obtain the prior
written approval of the Company for the handling of claims in which the Company
is named as a defendant or claims in which the agent seeks declaratory relief on
behalf of the Company. All claims or losses shall be reported in monthly
statements pursuant to Section 7 below. In addition, upon receiving notice or
knowledge of any Policy claim or loss in excess of One Hundred Thousand Dollars
($100,000) gross incurred loss; or any loss regardless of incurred dollar amount
involving the following: amputation of a major extremity, brain or spinal cord
injury, multiple deaths, permanent total disability as defined in the Workers'
Compensation act of the applicable State, any second or third degree burn of
50% or more of the body, reopening of any case in which further award might
involve liability of the Quota Share, bad faith claims or suits, demands in
excess of policy limits, actual or alleged violation of law by the Agent or
litigation naming Company as a defendant; Agent shall immediately notify the
Company in writing of

    
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such claim or loss, provide the amount of the reserve for such claim as
established by Agent, the facts and circumstance of the claim, the Agent's
analysis of the insured's liability for the claim, the Agent's analysis of
damages resulting from the claim, the Agent's analysis of the applicability of
coverage for the claim, and such other information and records concerning such
claim or loss as the Company requests.

         5.2 LEGAL COUNSEL AND ALLOCATED CLAIM COST. Whenever Agent shall deem 
it prudent to engage legal counsel or loss adjusters to protect the Company's
interest regarding claims or losses, such services shall be provided only by
qualified attorneys-at-law and/or licensed loss adjusters selected by Agent,
who have substantial experience in the handling of claims litigation of the
type involved. Any provision hereof to the contrary notwithstanding, it is
agreed that, with respect to any claim or loss of any amount, Agent shall
promptly furnish Company, or its designee, any additional claim or loss
information requested by the Company with respect to a claim or loss pertaining
to any policy covered by this agreement, and it is further agreed with respect
to any claim or loss of any amount as follows:

         a)  The Company may defend or assign an attorney of its own choice
             to defend or be associated in the defense of any claim or loss
             reported to the Company and, in the event an attorney has already
             been employed by Agent, the service of such attorney which has
             already been employed by Agent shall be terminated by Agent
             forthwith and the Agent shall waive any conflict of interest that
             may have been created by such attorney's employment by Agent.

                       
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         b)  in the event that the Company is named as a defendant in any
             lawsuit, Agent shall as soon as it has notice or knowledge of such
             lawsuit, immediately give written notice thereof to the Company
             accompanied by a copy of the complaint and any court papers
             related to such lawsuit.

         5.3 Unallocated costs, no reimbursement shall be paid by the Company to
Agent for the salaries, office expenses or other expenses incurred by or on
behalf of the Agent (including overhead) in the handling of the Company's claims
or losses. No reimbursement shall be paid by the Company to the Agent for fees
to attorneys, experts and service providers who are employees of, or on
permanent retainers to the Agent, unless Company gives its prior approval for
any such reimbursement.

         5.4 Claim fund. Agent agrees to monitor a claims paying checking
account ("Account"), established and funded by the Quota Share Reinsurer, from
which it will pay on behalf of Company all claims and allocated claim costs
under the Policies. Agent agrees to ensure the minimum balance in the Account as
per the Quota Share is maintained.

         6. EXPENSES.

         6.1 Agent shall pay from its own monies (and not seek reimbursement
from Company for) all commissions to any agents, subagents, brokers and
sub-producers, all inspection fees, expenses of examinations of Agent and other
governmental expenses in connection therewith, all refunds of unearned
commissions owed to Company on canceled policies, all costs to print and
inventory Policy forms, all costs to service claims as stated in Section 5.3
above and all unallocated costs to collect premiums in regard to Policies
issued, underwritten or serviced pursuant to this Agreement.

         6.2 In the event Company is notified by a regulatory

                         
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authority of the need of or an independent actuarial, accounting and/or legal
opinion not originally contemplated by this Agreement, Company shall notify
Agent who will in turn reimburse any expense incurred by Company.

         7. ACCOUNTING AND REPORTING PROCEDURES.

         Agent shall:

         7.1 Within thirty (30) days after the end of each month, remit to
Company the policy-issuing fee in accordance with Section 4.1.9. on all Policies
issued under the terms of this Agreement. Agent may not offset balances due to
Company hereunder against balances due Agent under any other contract with
Company.;

         7.2 On behalf of the Company supply accounting, underwriting and claim
bordereaux and pay the reinsurance premium to and make collections from the
Quota Share pursuant to its terms and conditions;

         7.3 With regard to business placed by Agent with Company hereunder,
furnish to Company in hard copy form:

                                                                           
             7.3.1 Within thirty (30) days after the end of each month, a bank
statement and bank reconciliation report for the claims paying checking account
described in Section 5.4 and a report of written, collected, earned and unearned
premiums; losses and loss adjustment expenses paid and outstanding; loss and
loss adjustment expenses incurred; commissions earned by Agent; Quota Share
earned and unearned premiums, commissions and losses (including losses and loss
adjustment expenses paid and outstanding, loss and loss adjustment expenses
incurred) ceded; and such other information as may be reasonably requested by
Company, which information Company shall maintain on file and shall make
available to insurance regulatory authorities for review;

             7.3.2 provide detail and summary reports, in a electronic or
printed medium, as are required to meet all reporting 


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requirements of state regulatory or taxation authorities, their agents for data
collection, and advisory organizations providing loss cost and policy forms
including but not limited to:

         a.       within (30) thirty days of the close of the calendar quarter
                  direct premiums (written and earned); inforce premiums;
                  policy counts (written and inforce); direct losses and loss
                  adjustment expenses including salvage and subrogation (paid
                  and reserve); number of claims open, closed with payment and
                  closed without payment; as prescribed by state regulatory
                  authorities. 

         B.       within (30) thirty days of the close of the quarter the direct
                  written premium, loss and loss adjustment expense including
                  salvage and subrogation (paid and reserved) transaction data
                  as prescribed by advisory organizations providing loss cost
                  and policy forms.

         C.       the reports of direct premiums (written and earned), losses
                  and loss adjustment expenses including salvage and subrogation
                  (paid and reserved) (30) thirty days prior to the prescribed
                  deadline as required by state regulatory data collection
                  agents including but not limited to financial calls, unit
                  statistical data, summary statistical data and detail claim
                  information for National Council on Compensation Insurance
                  (NCCI), Insurance Services Office (ISO) and National
                  Association of Independent Insurers (NAII), 

                  7.4 By the first business day of February of each year, the
Agent shall provide the Company with any information the Company may require in
order to complete its statutory financial statements.

         8.       BOOKS AND RECORDS.

         Agent shall at its own expense keep such books and records as 


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may be required by law, rulings, or orders of the insurance departments of the
states having jurisdiction over Agent or Agent's business or over any Policies
or the Quota Share connected with this Agreement and also as reasonably
requested by the Company, and shall make such books and records available for
examination, audit, and copying by the insurance departments of such states and
by the Company, or by their authorized representatives. The Company and the
Quota Share Reinsurer shall have the right to examine and review at any
reasonable time all books, records, files and papers, including, but not by way
of limitation, claim files and underwriting files, maintained and kept by Agent,
which relate to this Agreement, the Policies, or the Quota Share. Agent shall
institute and maintain retention and disposal systems for claim files and
underwriting files in accordance with procedures and requirements as prescribed
by law. All books and records of the Agent shall be maintained at the principal
place of business of Agent and shall be complete, accurate, and up-to-date, and
shall reflect all monies paid or received by Agent and all transactions of Agent
pursuant to this Agreement. Anything to the contrary notwithstanding, all of the
books, records, files and papers maintained and kept by Agent relating to
underwriting and claims matters involving this Agreement or the Policies, shall
be and remain the sole and exclusive property of the Company except that upon
termination of this Agreement, all right, title and interest in and to all
Policy renewals or expirations and all records with respect to renewals or
expirations shall automatically and irrevocably transfer to the vest in Agent.

         9. Indemnification.

         Agent shall indemnify and hold harmless Company from and against all
losses, damages, costs, expenses, claims or liabilities of any description
suffered by the Company with respect



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to the Agent or any Policies issued or underwritten by Agent, including, without
limitation, any attorney's fees, in connection with or arising out of (i) any
allegations, whether or not such allegations are groundless, that the Agent has
not complied with any laws, rules, or regulations to which it is subject, (ii)
any breach of any warranty or representation of Agent made in this Agreement or
any other breach of this Agreement by Agent, or (iii) any alleged misconduct,
negligence, misrepresentation, or other acts or failures to act of the Agent or
of it officers, directors, employees, agents, subproducers or independent
contractors.

10.      TERMINATION OF AGREEMENT,

         10.1  Except as specified in sections 10.2 - 10.4 of this Agreement,
this Agreement shall terminate on September 1, 1997.

         10.2  This Agreement may be terminated immediately by Company upon
giving written notice to Agent in the event of:
                                                                           
               10.2.1 The misappropriation by Agent of any of Company's funds or
property;

               10.2.2 The fraud, gross negligence or willful misconduct of
Agent;

               10.2.3 An assignment by Agent for the benefit of creditors; the
dissolution or liquidation of Agent; the appointment of a receiver or liquidator
for a substantial part of Agent's property; the institution of bankruptcy,
insolvency or similar proceedings by or against Agent;

               10.2.4 Material breach by Agent of any provision of this
Agreement which Agent has failed to cure within thirty (30) days after receiving
written notice for the grounds of the material breach of this Agreement; 

               10.2.5 Termination of the Quota Share for any reason;

               10.2.6 If any law or regulation of the federal, state or
local government of any jurisdiction in which Agent is doing 

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business shall render illegal or invalid any transaction contemplated by this
Agreement, any term of this Agreement or the Quota Share, the Agreement may be
terminated insofar as it applies to such jurisdiction by the Company giving
notice to Agent to such effect or by Agent giving notice to the Company to such
effect. 

         10.2.7 Change in ownership of ten percent (10%) or more of the
outstanding voting stock of Agent, sale, merger or transfer of Agent or change
of any principal officer or director of Agent. Company acknowledges and accepts
that Agent's parent anticipates a public offering to occur during the first
quarter of 1996.

         10.2.8 Termination of Wexford Underwriting Managers, Inc. involvement 
with Agent's worker's compensation business.

         10.3 This Agreement may be terminated by either party by giving at
least ninety (90) days written notice of termination to the other party.

         10.4 This Agreement may be terminated at any time by mutual written
agreement.

         10.5 Upon termination of this Agreement: 

              10.5.1 If at any time the Company sends notice of termination to
Agent as provided in Section 10.2 above or the Agreement is otherwise terminated
as provided herein, Agent shall not, with respect to this Agreement, solicit,
underwrite, quote, bind or issue any Policies or renew any existing Policies for
which the inception date or renewal date falls after the effective date of
termination of this Agreement, nor shall Agent cancel and rewrite any existing
Policies to provide for inception or anniversary dates prior to the effective
date of termination of this Agreement. Anniversary dates of Policies shall be
regarded as renewal dates for this purpose, and Agent shall terminate any such
Policies on its next anniversary date after the effective date of

                         
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termination of this Agreement unless instructed otherwise by the Company in
writing. Upon termination of this Agreement, the authority of Agent to
underwrite or issue Policies on behalf of the Company shall also terminate.

               10.5.2 Unless otherwise indicated by this Agreement or Company
otherwise notifies Agent in writing, Agent's duties and responsibilities under
this Agreement shall survive termination of this Agreement until such time as
all Policies issued, underwritten or serviced by Agent pursuant to this
Agreement have expired and the Quota Share has expired, and all known losses
thereunder have been paid or settled, have runoff or otherwise have been
disposed of in the judgement of the Company, and all incurred but not reported
loss reserves have been reduced to zero, and any amounts owed to the Company by
others or under the Quota Share in regard to any claims have been collected by
the Company. The only compensation Agent shall receive for its performance of
its duties hereunder (both during and after the term of this Agreement) is set
forth in the Commissions section of Exhibit A.

               10.5.3 Agent shall, unless notified in writing to the contrary by
Company:

         a.    Continue to represent Company for the purpose          
               of servicing Policies placed by Agent with             
               Company which are in force on, or renewed at           
               Company's election, or as required by law,             
               after the date of termination of this Agreement        
               and continue to receive its normal compensation        
               for such services.                                     
                                                                      
         B.    Issue and countersign appropriate endorsements         
               on contracts of insurance in force, provided           
               that without prior written approval of Company,        
               such endorsement shall not increase                    

                        

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              or extend Company's liability or extend the       
              term of any Policy.                               
                                                                
         C.   Collect and receipt for premiums and retain       
              commissions out of premiums collected as full     
              compensation.                                     

         10.6 Any notice issued pursuant to this Section shall be effective on
the day after it is received by Agent. 

         11.  SUSPENSION OF AGENT'S AUTHORITY.

         11.1 Company may, in lieu of terminating this Agreement, by notice to
Agent, immediately suspend Agent's authority to bind new or renewal business
and/or change any existing insurance policy during the pendency of any of the
following events: 

               11.1.1 Agent is delinquent in payment of any monies due Company;
or

               11.1.2 Any dispute exists between Agent and Company regarding the
existence of any of the events listed in Section 10.2 

               11.1.3 The Quota Share is not executed between Company and its
Quota Share reinsurer.

         11.2  Such suspension shall remain in effect until such delinquency is
cured or dispute is resolved and Agent receives written notification from
Company to that effect. If such delinquency is not cured within fifteen (15)
days from the date of receipt of written notification by Agent of such
delinquency, Company may exercise its right to terminate this Agreement under
Section 10.2

         11.3  Unless otherwise notified in writing to the contrary by Company,
Agent's obligation under this Agreement shall continue during the suspension of
Agent's authority under this Agreement.

         11.4  Any notice of suspension issued pursuant to this Section shall be
effective immediately.

                        
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         12. TRUST AGREEMENT.

         On or before September 10, 1996, the Agent, the Company and a qualified
financial institution acting as trustee thereunder shall enter into a trust
deposit agreement under which the Agent shall create a trust account f or the
benefit of the Company and shall deposit the sum of One Million Five Hundred
Thousand Dollars ($1,500,000) into the trust account. Trust account means the
funds and other assets held by the trustee from time to time under the trust
deposit agreement. The trust deposit agreement shall comply with, and the
financial institution acting as trustee thereunder shall be qualified to act as
trustee pursuant to, the applicable laws and regulations of Illinois and New
York, and those of each other applicable jurisdiction.

         Assets deposited in the trust account shall consist only of (i) cash
(United States legal tender), (ii) direct obligations of the United States or of
any agency or instrumentality of the United States, or in certificates of
deposit issued by a financial institution organized under the laws of the United
States or any state to the extent guaranteed or insured as to the payment of
principal and interest, or to the payment of principal only, by the United
States or an agency or instrumentality of the United States, provided such
obligation or certificate of deposit shall have a maturity date of ten years or
less from the date of purchase; and (iii) other investments for which the
Company shall first have given its written consent (which may be given subject
to conditions) from among those which are eligible investments for the Company
pursuant to both Article viii of the Illinois Insurance Code and Paragraphs (1),
(2), (3), (8) and (10) of subsection (a) of Section 1404 of the New York
Insurance Law; provided that such investments are issued by an institution that
is not the parent, parent subsidiary, or affiliate of either the Company or the
Agent.  

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         Notwithstanding any other provisions of this Agreement, the Company or
its successors interest may draw upon the Trust Fund at any time without
diminution because of insolvency of the Company or of the Reinsurer for one or
more of the following purposes only: 

         A.   To reimburse the Company for unearned premium on policies on     
              account of cancellations of such policies.                       
                                                                               
         B.   Upon 30 days notice to Agent, to pay or to reimburse the         
              Company for any loss which has not been otherwise paid.          
                                                                               
         C.   To pay any other amounts the Company claims are due under this
              Agreement.                                                       

         The issuing bank will have no responsibility whatsoever in connection
with the propriety of withdrawals made by the Company or the disposition of
funds withdrawn, except to ensure that withdrawals are made only upon the order
of properly authorized representatives of the Company.

         When all known loss reserves have been settled or closed and incurred
but not reported loss reserves are reduced to zero, the Company and the Agent
will mutually agree to terminate the Trust Agreement in its entirety. 

         13.  MISCELLANEOUS.

         13.1 This Agreement may be revised by mutual agreement of agent and
Company and such revision shall be evidenced by a written agreement duly
executed by authorized representatives of Agent and Company, which specifies the
effective date thereof.

         13.2 Agent shall not commit Company to any expenses or obligations not
specifically provided for herein without the prior written permission of
Company.

         13.3 Company shall have the right to oversee and supervise the
operation of this Agreement, including but not limited to the right at all
reasonable times, to have access to and to copy at Company's expense Agent's
books and records as they relate to this Agreement,

                           
                                       19

<PAGE>   20

which rights shall survive the termination or expiration of this Agreement. The
director or commissioner of insurance of any state where Agent issues policies
on behalf of Company shall have at all reasonable times the right of access to
all books and records and bank account of Agent in a form usable by such
official.

         13.4 Any provision of this Agreement which conflicts with applicable
law or regulation will be amended to the minimum extent necessary to effectuate
compliance with such law or regulation.

         13.5 Agent shall not have authority to represent Company on any
exclusive basis with respect to any policy form, line, class or subclass of
business, unless otherwise authorized in writing by Company. 

         13.6 Agent shall not have authority to negotiate, place, bind, cancel
or amend reinsurance on behalf of Company.

         13.7 The Company is responsible for all filings and reporting
requirements to state insurance regulatory, taxation authorities and advisory
organizations subject to the provisions set forth in Section 4.

         13.8 Failure of either party to enforce compliance with any term or
condition of this Agreement shall not constitute a waiver of such term or
condition. No waiver of any breach or default hereunder shall be valid unless in
writing and signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature.

         13.9 This Agreement shall be construed in accordance with the laws of
the state of Illinois.

         13.10 If any dispute arises between the Company and Agent with
reference to the interpretation, performance, or breach of this Agreement
(whether the dispute arises before or after termination of this Agreement) such
dispute, if not resolved by the parties, must be submitted to nonbinding
mediation. If such  

                                       20

<PAGE>   21

dispute is not resolved by nonbinding mediation within sixty (60) days it will
then be submitted to final and binding arbitration.

         Arbitration shall be initiated by the delivery of written request of
either party sent certified or registered mail. The arbitration hearings will be
held in the city of the Company's home office or a location agreed upon by the
parties to this Agreement.

         The members of the board of arbitration shall be active or retired
disinterested officials of insurance or reinsurance companies or Underwriters at
Lloyd's London not under the control or management of either party to this
agreement and will not have personal or financial interests in the result of the
arbitration. Each party shall appoint its arbitrator, and the two arbitrators
shall choose an umpire before instituting the hearing. If either party fails for
any reason to appoint an arbitrator within thirty (30) days after receipt of
written notice from the other party requesting to do so, the requesting party
may appoint both arbitrators. If the two arbitrators fail to agree in the
selection of an umpire within thirty (30) days of their appointment, each
arbitrator will nominate three individuals, of whom the other will decline two.
The final decision will be made by drawing lots.

         The claimant shall submit its initial brief within forty-five (45) days
from appointment of the umpire. The respondent shall submit its brief within
forty-five (45) days thereafter, and the claimant may submit a reply brief
within thirty (30) days after filing of the respondent's brief.

         The arbitrators will not be obliged to follow judicial formalities or
the rules of evidence except to the extent required by the law of the State of
Illinois. Further, the arbitrators will interpret this Agreement as an
honorable engagement rather than merely a legal obligation and shall make its
decision considering the custom and practice of the applicable insurance and
reinsurance



                                       21

<PAGE>   22

businesses.

         The board shall issue its decision in writing based upon a hearing in
which evidence may be introduced without following strict rules of evidence but
in which cross-examination and rebuttal shall be allowed. The board shall make
its decision within sixty (60) days following the termination of the hearings
unless the parties consent to an extension. The majority decision of the board
shall be final and binding upon all parties to the proceeding. Judgement may be
entered upon the award of the board in any court having jurisdiction.

         Punitive damages will not be awarded, the arbitrators may, however, at
their discretion award such other costs and expenses as they deem appropriate,
including but not limited to attorneys' fees, to the extent permitted by law.
Punitive damages will be deemed to include that portion of any award that is
awarded as a multiple of compensatory damages, including an award of double or
treble damages.

         The Company and Agent will bear the expense of their own arbitrator and
will jointly and equally bear with the other party the cost of the umpire and
arbitration if such arbitration arises out of any action by Agent in accordance
with and upon the express written direction of the Company in connection with
this Agreement.

         13.11 This Agreement may not be directly or indirectly assigned by
either party in whole or in part, nor may Agent appoint a sub managing general
agent.

         13.12 During the term of this Agreement, Agent shall obtain and
maintain in full force and effect, at its expense, and if available, fidelity
insurance, errors and omissions insurance, directors and officers insurance, and
general liability insurance in such amounts and on such terms as are reasonably
acceptable to the Company. Agent shall furnish the Company with copies of the
 

                                       22

<PAGE>   23

certificates of insurance for such insurance, and shall not cancel or amend any
such insurance without the Company's prior written consent.

         13.13 Any notice or other communications required or permitted
hereunder shall be sufficiently given if sent by certified or registered mail,
postage prepaid, if to Agent, addressed to RISCORP Management Services, Inc.,
1390 Main Street, Sarasota, Florida, Attention: Stephen C. Rece, Senior Vice
President and if to Company addressed to Virginia Surety Company, Inc., 123
North Wacker Drive, Chicago, Illinois 60606, Attention: Wayne J. Baliga, Vice
President, or such other address as notified by either party to the other.

         13.14 Agent is an independent contractor, not an employee of Company,
and nothing in this Agreement shall be construed to create an employer/employee
relationship between Company and Agent.

         13.15 The Agent acknowledges and agrees that it will benefit from this
Agreement and that a breach by it of the covenants contained in Sections 1, 2,
4, 5 or 10.5.1 herein would cause the Company irreparable damages that could not
adequately be compensated for only by monetary compensation. Accordingly, it is
understood and agreed that in the event of any such breach or threatened
breach, the Company may apply to a court of competent jurisdiction for, and
shall be entitled to, injunctive relief from such court, without the requirement
of posting a bond, or proof of damages, designed to cure existing breaches and
to prevent a future occurrence or threatened future occurrence of like breaches
on the part of the Agent. It is further understood and agreed that the remedies
and recourses herein provided shall be in addition to, and not in lieu of any
other remedy or recourse which is available to the Company either at law or in
equity in the absence of this Paragraph including without limitation the right
to damages.



                                       23

<PAGE>   24

         13.16 The Company nor the Agent shall not disclose material details of
this Agreement and the Policies without the prior consent of the other party.
However, this restriction will not apply to disclosures made by the Company or
The Agent to its agents, producers, shareholders, policyholders, auditors,
accountants, arbitrators, legal counsel, or other third parties as required in
the ordinary course of business, or to disclosures required by arbitration
panels, governmental agencies, regulatory authorities, or courts of law.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.

RISCORP MANAGEMENT SERVICES, INC.

By:/s/
 -----------------------------
Title: Senior Vice President
      ------------------------
Date: 10/18/96
      ------------------------

VIRGINIA SURETY COMPANY, INC.

By:/s/ Wayne J. Baliga
 -----------------------------
Title: Vice President
      ------------------------
Date: 9/25/96
      ------------------------

                                       24
<PAGE>   25

                                    EXHIBIT A

                              SCHEDULE OF AUTHORITY

Agent is only authorized to accept or bind business, as defined in the
Classification Section below, subject to the Amounts and stipulation indicated
below. Amounts in excess of the authorized limits or classifications must be
referred to Company for review and approval prior to binding.

         
         GROSS NET WRITTEN PREMIUM LIMIT --a maximum of $30,000,000 unless Agent
         obtains the prior written consent of the Company. Gross Net Written
         Premium shall mean gross written premium of the Company less returned
         premium and dividends paid on policies that are written subject to a
         loss sensitive dividend plan. For business that is written subject to
         an installment billing plan, the premiums shall be considered written
         thirty (30) days after the day which they became due to the Company.

         POLICY-TERM--not more than one year. 

         POLICY LIMITS AND COVERAGE CLASSIFICATIONS

         COVERAGE                             LIMIT
         Workers Compensation                 Statutory
         Employers Liability Coverages        $1,500,000
         No other classes of insurance may be written on Company's insurance
         policies. 

         EXCLUDED CLASSES OF BUSINESS
         agent shall not issue policies which are excluded under the terms and
         conditions of the Quota Share.

         COMMISSIONS--the Company will allow the Agent a commission equal to the
         commissions provided for in the Quota Share and from such commissions,
         Agent shall pay to the Company the policy issuing fee provided for in
         Section 4.1.9 of the Underwriting Management Agreement between Company
         and Agent. 

         TERRITORIAL LIMITATIONS-- Agent shall not issue any policy in

<PAGE>   26

any jurisdiction other than the States of Alabama, Georgia, Oklahoma, North
Carolina, Louisiana, Tennessee, Maryland and Virginia. Agent may issue the
Company's policies to ancillary business operations located in other states
provided the primary business operation (at least 60% of account premium) is
located in the states listed above or is insured by RISCORP Property and
Casualty Insurance Company, Riscorp Insurance Company and RISCORP National
Insurance Company. It is further understood that Agent shall not compete on
existing, renewal or prospective accounts written by Muirfield Underwriters,
Ltd., GAN National Insurance Company and Catholic Mutual Group (list of CMG
prospective and existing accounts per attached letter dated October 18, 1995).
Nothing is this Agreement or Exhibit shall be construed to prohibit Agent from
soliciting, issuing, underwriting and servicing any insurance policies for any
policyholder of the above mentioned companies after the termination of this
Agreement.

RATES AND UNDERWRITING- - Agent shall not issue any policy that does not meet
the rate and underwriting guidelines set forth in Exhibit B to the Underwriting
Management Agreement between Company and Agent, as amended from time to time by
Company, and incorporated herein by reference, unless such policy is referred to
Company for review and approval prior to binding.