<PAGE>
                                                                       EXHIBIT 4

WARRANTS WERE ISSUED TO HARTFORD LIFE INSURANCE COMPANY AND HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY ON JULY 17, 2003 IN SUBSTANTIALLY THE FORM SET FORTH
IN THIS EXHIBIT 4. THE TERMS AND CONDITIONS OF BOTH WARRANTS ARE IDENTICAL
EXCEPT FOR THE NAMES OF THE RESPECTIVE PARTIES.
<PAGE>
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) PURSUANT TO
REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) IN
COMPLIANCE WITH AN EXEMPTION THEREFROM AND ACCOMPANIED, WITH AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH AN EXEMPTION THEREFROM (UNLESS SUCH TRANSFER IS TO AN AFFILIATE
OF THE REGISTERED HOLDER).

           THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
                  EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
                 TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT

Warrant No. ____                                       Number of Shares: 500,000
                                                         (subject to adjustment)

Date of Issuance: July ____, 2003

                      ANNUITY AND LIFE RE (HOLDINGS), LTD.

                          COMMON STOCK PURCHASE WARRANT

      Annuity and Life Re (Holdings), Ltd., a Bermuda corporation (the
"COMPANY"), for value received, hereby certifies that Hartford Life and Annuity
Insurance Company, or its registered assigns (the "REGISTERED HOLDER"), is
entitled, subject to the terms and conditions set forth below, to purchase from
the Company, in whole or in part, at any time and from time to time on or after
the date of issuance and on or before 5:00 p.m., New York time, on July __, 2013
and shall be void thereafter (the "EXERCISE PERIOD"), 500,000 shares of Common
Stock, $1.00 par value per share, of the Company, at an exercise price of $1.25
per share. The shares purchasable upon exercise of this warrant ("WARRANT") and
the exercise price per share, each as adjusted from time to time pursuant to the
provisions of this Warrant, are hereinafter referred to as the "WARRANT SHARES"
and the "EXERCISE PRICE," respectively.

1. EXERCISE.

            (a) This Warrant may be exercised by the Registered Holder by
surrendering this Warrant, along with the purchase form appended hereto as
Exhibit A duly executed and completed by the Registered Holder or by the
Registered Holder's duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate by
notice in writing to the Registered Holder, accompanied by either (i) cash or
certified cashier's check payable to the Company (or wire transfer of
immediately available funds), in lawful money of the United States, of the
Exercise Price payable in respect of the number of Warrant Shares purchased upon
such exercise (the "AGGREGATE EXERCISE PRICE") or (ii) a written notice to the
Company that the Registered Holder is exercising this Warrant on a "cashless"
exercise basis by authorizing the Company to withhold from issuance a number of
shares of Common Stock issuable upon such exercise of the Warrant which when
multiplied by the Fair Market Value of the Common Stock is equal to the
Aggregate Exercise Price (and such withheld shares shall no longer be issuable
under this Warrant).

            (b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above (the "EXERCISE DATE"). At such time, the person or persons in whose
name or names any certificates for Warrant Shares shall be issuable upon such
exercise

<PAGE>
as provided in subsection 1(c) below shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.

            (c) Within ten (10) days after the date of exercise of this Warrant,
the Company, at its expense, will cause to be issued in the name of, and
delivered to, the Registered Holder, or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of full Warrant Shares to which the Registered
Holder shall be entitled upon such exercise plus, in lieu of any fractional
share to which the Registered Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 3 hereof; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involving the issuance and delivery of any such certificate upon
exercise in a name other than that of the Registered Holder. Notwithstanding the
foregoing, the Registered Holder shall be solely responsible for any income
taxes payable and arising from the issuance or exercise of this Warrant, or any
ad valorem property or intangible tax assessed against the Registered Holder. If
this Warrant shall be exercised in part only, the Company shall, upon surrender
of this Warrant for cancellation, execute and deliver a new Warrant evidencing
the rights of the Registered Holder to purchase the balance of the Warrant
Shares purchasable hereunder.

            (d) The Company shall reasonably assist and cooperate with any
Registered Holder required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant (including, without limitation, making any filings required to be made
by the Company).

            (e) Notwithstanding any other provision of this Warrant, if the
exercise of all or any portion of this Warrant is to be made in connection with
a registered public offering, a sale of the Company or any other transaction or
event, such exercise may, at the election of the Registered Holder, be
conditioned upon consummation of such transaction or event in which case such
exercise shall not be deemed effective until the consummation of such
transaction or event.

2. ADJUSTMENTS. In order to prevent dilution of the rights granted under this
Warrant and to grant the Registered Holder certain additional rights, the
Exercise Price shall be subject to adjustment from time to time as provided in
this Section 2 and the number of Warrant Shares shall be subject to adjustment
from time to time as provided in this Section 2.

            (a) Adjustment for Stock Splits and Combinations. If the Company
shall at any time after the date on which this Warrant was first issued (the
"ORIGINAL ISSUE DATE") while this Warrant remains outstanding and unexpired in
whole or in part, effect a subdivision (by any stock split or otherwise) of the
outstanding Common Stock into a greater number of shares, the Exercise Price in
effect immediately before that subdivision shall be proportionately decreased
and the number of shares of Common Stock obtainable upon exercise of this
Warrant shall be proportionately increased. Conversely, if the Company shall at
any time or from time to time after the Original Issue Date combine (by reverse
stock split or otherwise) the outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately before the
combination shall be proportionately increased and the number of shares of
Common Stock obtainable upon exercise of this Warrant shall be proportionately
decreased. Any adjustment under this paragraph shall become effective at the
close of business on the date the subdivision or combination becomes effective

            (b) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time or from time to time after the Original Issue Date while
this Warrant remains outstanding and unexpired in whole or in part shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of


                                       2
<PAGE>
Common Stock, then and in each such event the Exercise Price then in effect
immediately before such event shall be decreased as of the time of such issuance
or, in the event such a record date shall have been fixed, as of the close of
business on such record date, by multiplying the Exercise Price then in effect
by a fraction:

                  (i) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date; and

                  (ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the total number
of shares of Common Stock issuable in payment of such dividend or distribution;

provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Exercise Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Exercise Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.

            (c) Adjustment for Reclassification, Exchange and Substitution. If
at any time after the Original Issue Date while this Warrant remains outstanding
and unexpired in whole or in part, the Common Stock issuable upon exercise of
this Warrant is changed into the same or a different number of shares of any
class or classes of stock, this Warrant will thereafter represent the right to
acquire such number and kind of securities as would have been issuable as a
result of exercise of this Warrant and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment in this Section 2.

            (d) Adjustments for Other Dividends and Distributions. In the event
the Company at any time or from time to time after the Original Issue Date while
this Warrant remains outstanding and unexpired in whole or in part shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Company (other than shares of Common Stock) or in cash or other property
(other than cash out of earnings or earned surplus, determined in accordance
with generally accepted accounting principles), then and in each such event
provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the Registered Holder would have been entitled to receive
had this Warrant been exercised into Common Stock on the date of such event and
had the Registered Holder thereafter, during the period from the date of such
event to and including the Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder.

            (e) Adjustment for Mergers or Reorganizations, etc. Any
reorganization, recapitalization, reclassification, consolidation, merger, sale
of all or substantially all of the Company's assets or other transaction
involving the Company in which the Common Stock is converted into or exchanged
for securities, cash or other property while this Warrant remains outstanding
and unexpired in whole or in part (other than a transaction covered by
subsections 2(a), 2(b) or 2(d)) is referred to herein as an "ORGANIC CHANGE".
Prior to the consummation of any such Organic Change, the Company shall make
appropriate provision (in form and substance satisfactory to the Registered
Holders of the Warrants then remaining outstanding and unexpired) to ensure that
the Registered Holder shall have the right to receive, in lieu of or in addition
to (as the case may be) such shares of Common Stock immediately acquirable and
receivable upon exercise of this Warrant, the kind and amount of securities,
cash or other property as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock


                                       3
<PAGE>
immediately acquirable and receivable upon exercise of this Warrant had such
Organic Change not taken place. In such case, appropriate adjustment (in form
and substance satisfactory to the Registered Holders of the Warrants then
remaining outstanding and unexpired) shall be made with respect to the
Registered Holder's rights and interests to ensure that the provisions of this
Section 2 shall thereafter be applicable to the Warrants. The Company shall not
effect any reorganization, recapitalization, consolidation or merger unless,
prior to the consummation thereof, the successor entity (if other than the
Company) resulting from the consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance satisfactory to
the Registered Holders of the Warrants then remaining outstanding and unexpired)
the obligation to deliver to each Registered Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire; provided, that any assumption shall not
relieve the Company of its obligations hereunder.

            (f) Other Events. If any event occurs that would adversely affect
the Registered Holder's rights but is not expressly provided for by this Section
2, then the Company's Board of Directors will make an appropriate adjustment in
the Exercise Price and number of Warrant Shares subject to this Warrant so as to
protect the Registered Holder's rights; provided, however, that no such
adjustment will increase the Exercise Price or decrease the number of shares of
Common Stock obtainable as otherwise determined pursuant to this Section 2.

            (h) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Exercise Price pursuant to this Section 2, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Registered Holder a
certificate setting forth such adjustment or readjustment (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable and the Exercise Price) and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the written
request at any time of the Registered Holder, promptly furnish or cause to be
furnished to the Registered Holder a certificate setting forth (i) the Exercise
Price then in effect and (ii) the number of shares of Common Stock and the
amount, if any, of other securities, cash or property which then would be
received upon the exercise of this Warrant, and shall cause a copy of such
certificate to be mailed (by first-class mail, postage prepaid) to the
Registered Holder.

3. FRACTIONAL SHARES. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the fair market value ("FAIR MARKET VALUE") per
share of Common Stock, such Fair Market Value to be determined as follows:

            (a) If traded on a securities exchange or through the Nasdaq
National Market or SmallCap Market, the Fair Market Value shall be deemed to be
the average of the closing prices of the securities on such exchange over the
thirty (30) day period ending three (3) days prior to the closing. If actively
traded over the counter, the value shall be deemed to be the average of the
closing bid or sales prices (whichever is applicable) over the thirty (30) day
period ending three (3) days prior to the closing; or

            (b) If at any time such security is not listed on any securities
exchange or quoted in the Nasdaq National Market or the SmallCap Market, or
actively traded over the counter, the Fair Market Value shall be the fair value
thereof, as determined jointly by the Board of Directors and the Registered
Holders of the Warrants then remaining outstanding and unexpired. If such
parties are unable to reach agreement within a reasonable period of time, such
fair value shall be determined by an appraisal conducted, at the Company's
selection, of either CS First Boston, Goldman Sachs, Merrill Lynch, or Morgan
Stanley. If none of these potential appraisers are able to serve, then such fair
value shall be determined by an independent appraiser experienced in valuing
securities jointly selected by the


                                       4
<PAGE>
Company's Board of Directors and the Registered Holders of the Warrants then
remaining outstanding and unexpired. The determination of the appraiser shall be
final and binding upon the parties and the parties shall share the fees and
expenses of such appraiser equally.

4. REQUIREMENTS FOR TRANSFER.

            (a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Act or (ii) the Company first shall have been furnished with an opinion of legal
counsel reasonably satisfactory to the Company to the effect that such sale or
transfer is exempt from the registration requirements of the Act.

            (b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
corporation to a wholly owned subsidiary of such corporation or to a corporation
owned by the same parent entity of such corporation, a transfer by a Registered
Holder which is a partnership to a partner of such partnership or a retired
partner of such partnership or to the estate of any such partner or retired
partner, or a transfer by a Registered Holder which is a limited liability
company to a member of such limited liability company or a retired member or to
the estate of any such member or retired member, provided that, as a condition
to the Company effecting such transfer, the transferee in each case agrees in
writing to be subject to the terms of this Section 4, or (ii) a transfer made in
accordance with Rule 144 under the Act, unless in the case of clause (ii) only,
the Company reasonably requests an opinion of counsel regarding compliance with
Rule 144 under the Act.

            (c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
                  ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED,
                  SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
                  AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER SUCH ACT AND
                  SUCH LAWS OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM
                  AND AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
                  OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT
                  REQUIRED."

      The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.

5. No Impairment. The Company will not, by amendment of its charter or through
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (a) not increase the par


                                       5
<PAGE>
value of any shares of Common Stock obtainable upon the exercise of this Warrant
and (b) take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

6. NOTICES OF RECORD DATE, ETC. In the event:

            (a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or

            (b) of any Organic Change; or

            (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holders at least twenty (20) days prior to the record date specified
therein (or such shorter period approved by a majority of the Registered
Holders) and at least twenty (20) days prior to the effective date of such event
specified in clause (b) or (c) hereof a notice specifying, as the case may be,
(i) the record date for such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such Organic Change, dissolution, liquidation or winding-up is to take
place, and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such Organic Change, dissolution, liquidation or winding-up;
provided, however, that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. Nothing herein shall prohibit the
Registered Holder from exercising this Warrant during the twenty (20) day period
commencing on the date of such notice.

7. RESERVATION OF STOCK. The Company covenants that for the duration of the
Exercise Period, the Company will at all times reserve and keep available, from
its authorized and unissued Common Stock solely for issuance and delivery upon
the exercise of this Warrant and free of preemptive rights, such number of
Warrant Shares and other securities, cash and/or property, as from time to time
shall be issuable upon the exercise of this Warrant. The Company further
covenants that it shall, from time to time, take all steps necessary to increase
the authorized number of shares of its Common Stock if at any time the
authorized number of shares of Common Stock remaining unissued is insufficient
to permit the exercise of this Warrant.

8. ISSUANCE UPON EXERCISE. All shares of Common Stock issuable upon exercise of
this Warrant will be duly and validly issued, fully paid and nonassessable and
will be free of restrictions on transfer, other than restrictions on transfer
under any agreement between the Registered Holder and the Company and under
applicable state and federal securities laws, and will be free from all taxes,
liens and charges in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously or otherwise specified herein). The
Company shall take all such actions as may be necessary to ensure that all such
shares of Common Stock may be so issued without violation of any applicable law
or governmental regulation or any requirements of any domestic stock exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be delivered by the Company upon each such issuance as soon
as practicable).


                                       6
<PAGE>
9. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder of this
Warrant, properly endorsed, to the Company at the principal office of the
Registered Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Registered Holder, at the
Company's expense, a new Warrant or Warrants of like tenor, in the name of the
Registered Holder or as the Registered Holder may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
(or other securities, cash and/or property) then issuable upon exercise of this
Warrant.

10. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably satisfactory to
the Company (an affidavit of a Registered Holder shall be satisfactory) of the
ownership and loss, theft, destruction or mutilation of any certificate
evidencing this Warrant and, in the case of loss, theft or destruction, upon
delivery of an indemnity agreement of the Registered Holder in form reasonably
satisfactory to the Company, or in the case of mutilation, upon surrender and
cancellation of such certificate, the Company shall, at its expense, execute and
deliver in lieu of such certificate, a new certificate of like kind representing
the same rights represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.

11. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Registered Holder that:

            (a) Organization, Qualifications and Corporate Power. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of Bermuda and is duly licensed or qualified to transact business as a
foreign corporation and is in good standing in each jurisdiction in which the
nature of the business transacted by it or the character of the properties owned
or leased by it requires such licensing or qualification. The Company has full
corporate power and authority to own and hold its properties and to carry on its
business as now conducted and as proposed to be conducted, to execute, deliver
and perform this Agreement.

            (b) Authorization; No Conflict; No Violation. The Company's
execution and delivery of this Agreement and performance of its obligations
hereunder, and issuance and delivery of the Warrant Shares have been duly
authorized by all requisite corporate action and will not (a) result in a
violation of the charter or the Company's bylaws, as amended, (b) result in a
violation of any applicable law, rule or regulation, or any material order,
injunction, judgment or decree of any court or other agency of government, (c)
conflict with, result in a breach of, or constitute (or, with due notice or
lapse of time or both, would constitute) a default under, or give rise to any
right of termination, acceleration or cancellation under, any material
indenture, agreement, contract, license, arrangement, understanding, evidence of
indebtedness, note, lease or other instrument to which the Company or any of its
properties or assets is bound, (d) result in the creation or imposition of any
material lien, charge, restriction, claim or encumbrance of any nature
whatsoever upon the Company or any of the Company's material properties or
assets or (e) require any consent, approval, notification, waiver or other
similar action from any third party.

            (c) Consents and Approvals. No registration or filing with, or
consent or approval of or other action by, any federal, state or other
governmental agency or instrumentality or any third party is or will be
necessary for the Company's valid execution, delivery and performance of this
Agreement or the Company's issuance and delivery of the Warrant Shares, other
than those (a) which have previously been obtained or made or (b) those which
are required to be made under federal or state securities laws, which will be
obtained or made, and will be effective, within the time periods required by
law.

            (d) Validity. This Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligations of the
Company, enforceable against the Company


                                       7
<PAGE>
in accordance with its terms, except to the extent limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application related to the enforcement of creditors' rights generally and (b)
general principles of equity, and except that enforcement of rights to
indemnification and contribution contained therein may be limited by applicable
federal or state laws or the public policy underlying such laws, regardless of
whether enforcement is considered in a proceeding in equity or at law.

            (e) Ownership Percentage. This Warrant is one of a series of
Warrants issued by the Company, all dated the date hereof and of like tenor
(collectively, the "COMPANY WARRANTS"). If exercised on the date hereof, the
number of shares of Common Stock issued pursuant to this Warrant together with
all the other Company Warrants, would constitute less than five percent (5%) of
the issued and outstanding Common Stock of the Company following such exercise.

12. TRANSFERS, ETC.

            (a) The Company shall maintain a register at its principal executive
office containing the name and address of the Registered Holder of this Warrant.
The Registered Holder may change its or his address as shown on the warrant
register by written notice to the Company requesting such change.

            (b) Subject to the provisions of Section 4 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant with a properly executed assignment (in the form of Exhibit B
hereto) at the principal executive office of the Company.

            (c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder as the absolute owner
hereof for all purposes; provided, however, that if and when this Warrant is
properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.

            (d) The Company shall not close its books against the transfer of
this Warrant or any share of Common Stock issued or issuable upon the exercise
of this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to ensure that the par value per share of the unissued Common Stock
acquirable upon exercisable of this Warrant is at all times equal to or less
than the Exercise Price then in effect.

13. SPECIAL OWNERSHIP NOTICE. In the event the number of shares of Common Stock
issued upon exercise of this Warrant, together with the exercise of all the
other Company Warrants, would constitute five percent (5%) or more of the issued
and outstanding Common Stock of the Company following such exercise, then the
Company will promptly notify the Registered Holder hereof in accordance with the
provisions of Section 14.

14. MAILING OF NOTICES, ETC. Any notice, request, demand or other communication
required or permitted to be given to a party pursuant to the provisions of this
Agreement will be in writing and will be effective and deemed given under this
Agreement on the earliest of: (a) the date of personal delivery, (b) the date of
transmission by facsimile, with confirmed transmission and receipt, (c) two (2)
days after deposit with a nationally-recognized courier or overnight service
such as Federal Express, or (d) five (5) days after mailing via certified mail,
return receipt requested. All notices not delivered personally or by facsimile
will be sent with postage and other charges prepaid and properly addressed to
the party to be notified at the address set forth below for such party:


                                       8
<PAGE>
            If to a Registered Holder:

            Hartford Life and Annuity Insurance Company
            P.O. Box 2999
            Hartford, Connecticut 06104-2999
            Phone: (860) 843-3560
            Fax: (860) 843-8665
            Attn: Christine Repasy, General Counsel

            With a copy to (which does not constitute notice):

            Akin, Gump, Strauss, Hauer & Feld, L.L.P.
            300 Convent Street, Suite 1500
            San Antonio, Texas 78205
            Phone: (210) 281-7000
            Fax: (210) 224-2035
            Attn: Barry Chasnoff, Esq.

            If to the Company:

            Annuity and Life Re (Holdings), Ltd.
            Cumberland House
            1 Victoria Street
            Hamilton, Bermuda HM11
            Phone: (441) 296-7667
            Fax: (441) 296-7665
            Attn: John Burke, Chief Executive Officer

            With a copy to (which does not constitute notice):

            Clifford Chance US LLP
            200 Park Avenue
            New York, New York 10166
            Attn: Peter R. Chaffetz, Esq.
            Phone: (212) 878-8000
            Fax: (212) 878-8375

      Any party hereto (and such party's permitted assigns) may change such
party's address for receipt of future notices hereunder by giving written notice
to the Company and the other parties hereto.

15. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Subject to the provisions of
Sections 2 and 6 hereof, until the exercise of this Warrant, the Registered
Holder shall not have or exercise any rights by virtue hereof as a stockholder
of the Company, including, without limitation, the right to vote, to receive
dividends and other distributions or to receive notice of or attend meetings of
stockholders or any other proceedings of the Company. Notwithstanding the
foregoing, in the event (a) the Company effects a split of the Common Stock by
means of a stock dividend and the Exercise Price of and the number of Warrant
Shares are adjusted as of the date of the distribution of the dividend (rather
than as of the record date for such dividend), and (b) the Registered Holder
exercises this Warrant between the record date and the distribution date for
such stock dividend, the Registered Holder shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock
acquired upon such


                                       9
<PAGE>
exercise, notwithstanding the fact that such shares were not outstanding as of
the close of business on the record date for such stock dividend.

16. AMENDMENT OR WAIVER. Any term of this Warrant may be amended or waived upon
the written consent of the Company and the holders of Company Warrants
representing at least 50% of the number of shares of Common Stock then subject
to outstanding Company Warrants; provided that any such amendment or waiver must
apply to all Company Warrants then outstanding; and provided further that the
number of Warrant Shares subject to this Warrant, the Exercise Price of this
Warrant and the number of shares or class of stock obtainable upon exercise of
this Warrant may not be amended, and the right to exercise this Warrant may not
be waived, without the written consent of the holder of this Warrant (it being
agreed that an amendment to or waiver under any of the provisions of Section 2
of this Warrant shall not be considered an amendment of the number of Warrant
Shares or the Exercise Price). The Company shall promptly give notice to all
holders of the Company Warrants of any amendments effected in accordance with
this Section 16. No special consideration may be given to any holder as
inducement to waive or amend this Warrant unless such consideration is given
equally and ratably to all holders.

17. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon and inure to the
benefit of the Registered Owner and its assigns, and shall be binding upon any
entity succeeding to the Company by consolidation, merger or acquisition of all
or substantially all of the Company's assets. The Company may not assign this
Warrant or any rights or obligations hereunder without the prior written consent
of the Registered Holder. The Registered Holder may assign this Warrant without
the Company's prior written consent.

18. REMEDIES. In the event of a breach by the Company of any of its obligations
under this Warrant, the Registered Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not provide adequate compensation for any
losses incurred by reason of its breach of any of the provisions of this Warrant
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.

19. SECTION HEADINGS. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

20. COUNTERPARTS. This Warrant may be executed in two or more counterparts, each
of which will be deemed an original but all of which together will constitute
one and the same instrument.

21. SEVERABILITY. The provisions of this Warrant will be deemed severable and
the invalidity or unenforceability of any provision hereof will not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Warrant, as applied to any party or to any circumstance, is
adjudged by a court or governmental body not to be enforceable in accordance
with its terms, the parties agree that the court or governmental body making
such determination will have the power to modify the provision in a manner
consistent with its objectives such that it is enforceable, and/or to delete
specific words or phrases, and in its reduced form, such provision will then be
enforceable and will be enforced.

22. TITLES AND SUBTITLES. The article and section headings contained in this
Warrant are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Warrant.


                                       10
<PAGE>
23. THIRD PARTIES. Nothing in this Warrant, express or implied, is intended to
confer upon any person other than the parties hereto and their successors and
assigns, any rights or remedies under or by reason of this Warrant.

24. GOVERNING LAW. This Warrant and the performance of the transactions and the
obligations of the parties hereunder will be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to any choice of law principles.

                            [SIGNATURE PAGE FOLLOWS]


                                       11
<PAGE>
      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
attested by its duly authorized officers under its corporate seal and to be
dated the Date of Issuance hereof.

                                        ANNUITY AND LIFE RE (HOLDINGS), LTD.


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

[Corporate Seal]

ATTEST:


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


                                       12
<PAGE>
                                                                       EXHIBIT A

                                  PURCHASE FORM

To:_________________                                          Dated:____________

      The undersigned, pursuant to the provisions set forth in the attached
      Warrant (No. ___), hereby irrevocably elects to purchase _____ shares of
      the Common Stock covered by such Warrant.

      The undersigned herewith makes payment of the full exercise price for such
      shares at the price per share provided for in such Warrant, which is
      $________ in lawful money of the United States.

                                        [                                      ]
                                         --------------------------------------

                                        ----------------------------------------
                                        Name:
                                        Title:

                                        Address:
                                                 -------------------------------

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


                                       13
<PAGE>
                                                                       EXHIBIT B

                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:

<TABLE>
<CAPTION>
Name of Assignee                       Address                                No. of Shares
----------------                       -------                                -------------
<S>                                    <C>                                    <C>


</TABLE>


Dated:
      ---------------------------

                                        [                                      ]
                                         --------------------------------------

                                        ----------------------------------------
                                        Name:
                                        Title:

                                        Address:
                                                 -------------------------------

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

Signature Guaranteed:

By:
    ---------------------------

The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.


                                       14