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                                                                   Exhibit 4.2.6


                    FIFTH AMENDMENT TO THE CREDIT AGREEMENT


         This Fifth Amendment ("Fifth Amendment"), dated as of March 31, 2000,
is among ENHANCE FINANCIAL SERVICES GROUP INC., a corporation duly organized and
validly existing under the laws of the State of New York (together with its
successors and assigns, the "COMPANY"); each of the lenders that is a signatory
hereto (together with its successors and assigns, individually, a "BANK", and,
collectively, the "BANKS"); and FLEET NATIONAL BANK, as Swingline Bank (in such
capacity, together with its successors and permitted assigns in such capacity,
the "SWINGLINE BANK") and as agent for the Banks (in such capacity, together
with its successors in such capacity, the "AGENT").

         The Company, the Banks, the Swingline Bank and the Agent are parties to
a Credit Agreement dated as of June 30, 1998, which Credit Agreement was amended
and restated in its entirety by the Third Amendment to the Credit Agreement
dated as of June 29, 1999 and further amended by a Fourth Amendment to the
Credit Agreement dated as of September 29, 1999 (as so amended and restated and
in effect on the date hereof, the "CREDIT AGREEMENT"). The Company has requested
the Banks to amend the Credit Agreement to extend the Increased Commitment
Period (as originally defined in the Fourth Amendment) with respect to an
increased Commitment during such period and to provide an additional increased
commitment amount of $31,250,000 during such extended Increased Commitment
Period (as defined in the Fifth Amendment). The Banks are in agreement with such
request upon certain terms and conditions. Accordingly, the parties hereto
hereby agree as follows:

         Section 1. DEFINITIONS. Except as otherwise defined in this Fifth
Amendment, terms defined in the Credit Agreement are used herein as defined
therein.

         Section 2. AMENDMENTS. Subject to the satisfaction of the conditions
precedent specified in Section 3 below, but effective as of the date hereof, the
Credit Agreement shall be amended as follows:

         (a)      Section 1.01 (CERTAIN DEFINED TERMS) is amended as follows:

                  (i)      by deleting the definition of "Applicable Margin" and
                  substituting therefor the following:

                  "APPLICABLE MARGIN" shall mean: (a) with respect to Increased
                  Commitment Loans, Revolving Credit Loans and Term Loans that
                  are Base Rate Loans, 0% per annum; and (b) with respect to (i)
                  Increased Commitment Loans, Revolving Credit Loans and Term
                  Loans that are Eurodollar Loans or (ii) with respect to
                  facility fees payable hereunder, the applicable percentage per
                  annum set forth below under the caption "Eurodollar Spread" or
                  "Facility Fee Rate", as the case may be, based upon the
                  ratings by S&P and Moody's applicable on such date to the
                  Index Debt:


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                  --------------------------------------------------------------
                                         Eurodollar Spread
                                   ------------------------------
                   Index Debt         Increased         Term Loan   Facility Fee
                    Rating:        Commitment Loan                    Rate(2)
                                    and Revolving
                                   Credit Loan(1)
                  --------------------------------------------------------------
                     Level 1           0.430%            0.750%        0.120%
                  --------------------------------------------------------------
                     Level 2           0.500%            0.850%        0.150%
                  --------------------------------------------------------------
                     Level 3           0.570%            0.950%        0.180%
                  --------------------------------------------------------------
                     Level 4           0.620%            1.050%        0.230%
                  --------------------------------------------------------------
                     Level 5           0.670%            1.150%        0.280%
                  --------------------------------------------------------------
                  (1)      During any period that the aggregate outstanding
                           principal amount of Increased Commitment Loans,
                           Revolving Credit Loans, Competitive Loans and
                           Swingline Loans exceeds 33% of the aggregate
                           Commitments of the Banks, the Eurodollar Spread for
                           Increased Commitment Loans and Revolving Credit Loans
                           shall be increased by .050% above the percentages set
                           forth in the above grid for each of the Index Debt
                           Rating Levels. During any period that the aggregate
                           outstanding principal amount of Increased Commitment
                           Loans, Revolving Credit Loans, Competitive Loans and
                           Swingline Loans exceeds 66% of the aggregate
                           Commitments of the Banks, the Eurodollar Spread for
                           Increased Commitment Loans and Revolving Credit Loans
                           shall be increased by .100% above the percentages set
                           forth in the above grid for each of the Index Debt
                           Rating Levels.

                  (2)      The facility fee shall not be applicable to any Term
                           Loans.
                  --------------------------------------------------------------

                  For purposes of determining the applicable Index Debt Rating
                  (except for split ratings of more than one equivalent level as
                  provided for below): (a) Level 1 shall be deemed to be
                  applicable if (i) no Event of Default shall have occurred and
                  be continuing and (ii) the Index Debt is rated AA or higher by
                  S&P OR Aa2 or higher by Moody's; (b) Level 2 shall be deemed
                  to be applicable if (i) no Event of Default shall have
                  occurred and be continuing, (ii) Level 1 is not applicable and
                  (iii) the Index Debt is rated A or higher by S&P OR A2 or
                  higher by Moody's; (c) Level 3 shall be deemed to be
                  applicable if (i) no Event of Default shall have occurred and
                  be continuing, (ii) neither Level 1 nor Level 2 is applicable
                  and (iii) the Index Debt is rated A- or higher by S&P OR A3 or
                  higher by Moody's; (d) Level 4 shall be deemed to be
                  applicable if (i) no Event of Default shall have occurred and
                  be continuing, (ii) neither Level 1, Level 2 nor Level 3 is
                  applicable and (iii) the Index Debt is rated BBB+ or higher by
                  S&P OR Baa1 or higher by Moody's; and (e) Level 5 shall be
                  deemed to be applicable if no other Level is applicable. If
                  S&P or Moody's shall not have in effect a rating for the Index
                  Debt (other than by reason of the circumstances referred to in
                  the last sentence of this definition), then S&P shall be
                  deemed to have established a rating in Level 5. If


                                      -2-
<PAGE>

                  the rating for the Index Debt of S&P and Moody's is split by
                  more than one equivalent rating level, the Index Debt Rating
                  shall be deemed to be at that Level corresponding to the
                  rating that is one level higher than the lower of the two
                  ratings. If the rating established or deemed to have been
                  established by S&P or Moody's for the Index Debt shall be
                  changed (other than as a result of a change in the rating
                  system of S&P or Moody's), such change shall be effective as
                  of the date on which it is first announced by S&P or Moody's,
                  as the case may be. Each change in the Applicable Margin shall
                  apply during the period commencing on the effective date of
                  such change and ending on the date immediately preceding the
                  effective date of the next such change. If the rating system
                  of S&P or Moody's shall change, or if S&P or Moody's shall
                  cease to be in the business of rating corporate debt
                  obligations, the Company and the Banks shall negotiate in good
                  faith to amend this definition to reflect such changed rating
                  system or the unavailability of ratings from such rating
                  agency and, pending the effectiveness of any such amendment,
                  the Applicable Margin shall be determined by reference to the
                  rating most recently in effect prior to such change or
                  cessation.

                  (ii)     by deleting the definition of "Commitment" and
                  substituting therefor the following:

                  "COMMITMENT" shall mean, as to each Bank, the obligation of
                  such Bank to make Loans in an aggregate amount not exceeding
                  the amounts and for the time periods set opposite such Bank's
                  name under the caption "Commitment" on the signature pages of
                  the Fifth Amendment (as the same may be reduced at any time or
                  from time to time pursuant to Section 2.03 hereof).

                  (iii)    by deleting the definition of "Notes" and
                  substituting therefor the following:

                  "NOTES" shall mean the Revolving Credit Notes, the Competitive
                  Notes, the Term Loan Notes, the Swingline Note and the
                  Increased Commitment Notes.

                  (iv)     by adding the following new definition:

                  "ASSET BASED BUSINESSES" shall mean non-insurance businesses
                  of the Company and its Subsidiaries.

                  (v)      by adding the following new definition:

                  "FIFTH AMENDMENT" shall mean the Fifth Amendment to the Credit
                  Agreement dated as of March 31, 2000 among the Company, the
                  Banks signatory thereto, the Swingline Bank and the Agent.

                  (vi)     by adding the following new definition:

                  "ORIGINAL COMMITMENT AMOUNT" shall mean, as to each Bank, the
                  obligation of such Bank to make Loans in an aggregate amount
                  not exceeding the amounts set


                                      -3-
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                  opposite such Bank's name under the subcaption "Original
                  Commitment Amount" on the signature pages of the Fifth
                  Amendment (as the same may be reduced at any time or from time
                  to time pursuant to Section 2.03 hereof).

                  (vii)    by adding the following new definition:

                  "INCREASED COMMITMENT AMOUNT" shall mean, as to each Bank, so
                  long as 100% of the Original Commitment Amount is outstanding,
                  the obligation of such Bank to make Loans in an aggregate
                  amount not exceeding the amounts set opposite such Bank's name
                  under the subcaption "Increased Commitment Amount" on the
                  signature pages of the Fifth Amendment (as the same may be
                  reduced at any time or from time to time pursuant to Section
                  2.03 hereof).

                  (viii)   by adding the following new definition:

                  "INCREASED COMMITMENT LOANS" shall mean the loans provided for
                  by Section 2.01(f) hereof, which may be Base Rate Loans and/or
                  Eurodollar Loans.

                  (ix)     by adding the following new definition:

                  "INCREASED COMMITMENT NOTES" shall mean the promissory notes
                  provided for by Section 2.06(g) hereof and all promissory
                  notes delivered in substitution or exchange therefor, in each
                  case as the same shall be modified and supplemented and in
                  effect from time to time.

                  (x)      by deleting the definition of "Increased Commitment
                  Period" and substituting therefor the following:

                  "INCREASED COMMITMENT PERIOD" shall mean the period from the
                  Amendment Effective Date (as defined in the Fifth Amendment)
                  to the earlier of (a) May 30, 2000 or (b) the reduction of the
                  Increased Commitment Amount to $0.00 pursuant to Section 2.03
                  hereof.

                  (xi)     by deleting the definition of "Borrowing" and
                  substituting therefor the following:

                  "BORROWINg" means (a) Increased Commitment Loans or Revolving
                  Credit Loans of the same Type, made, Converted or Continued on
                  the same date and, in the case of Eurodollar Loans, as to
                  which a single Interest Period is in effect, or (b) a
                  Competitive Loan or group of Competitive Loans of the same
                  Type made on the same date and as to which a single Interest
                  Period is in effect.

                  (xii)    by deleting the definition of "Interest Period" and
                  substituting therefor the following:

                  "INTEREST PERIOD" shall mean (a) with respect to any Increased
                  Commitment Loan or Revolving Credit Loan that is a Eurodollar
                  Loan, each period commencing on the date such Eurodollar Loan
                  is made or Converted from a Base Rate Loan or (in


                                      -4-
<PAGE>

                  the event of a Continuation) the last day of the next
                  preceding Interest Period and ending on the numerically
                  corresponding day in the first, second or third calendar month
                  thereafter, as the Company may select as provided in Section
                  4.05 hereof, (b) with respect to any Competitive Loan that is
                  a Eurodollar Loan, the period commencing on the date of such
                  Borrowing and ending on the numerically corresponding day in
                  the calendar month that is one, two or three months
                  thereafter, as specified in the applicable Competitive Bid
                  Request, (c) with respect to any Fixed Rate Borrowing, the
                  period (which shall not be fewer than 3 days or more than 180
                  days) commencing on the date of such Borrowing and ending on
                  the date specified in the applicable Competitive Bid Request,
                  (d) with respect to any Term Loan that is a Eurodollar Loan,
                  each period commencing on the date such Term Loan is made or
                  Converted from a Base Rate Loan or (in the event of a
                  Continuation) the last day of the next preceding Interest
                  Period and ending on the numerically corresponding day in the
                  first, second, third or sixth calendar month thereafter, as
                  the Company may select as provided in Section 4.05 hereof,
                  except that each Interest Period that commences on the last
                  Business Day of a calendar month (or on any day for which
                  there is no numerically corresponding day in the appropriate
                  subsequent calendar month) shall end on the last Business Day
                  of the appropriate subsequent calendar month and (e) with
                  respect to any Swingline Loan, the period commencing on the
                  date such Swingline Loan is made and ending on the date three
                  Business Days thereafter. Notwithstanding the foregoing: (i)
                  the Company may not select any Interest Period for any
                  Increased Commitment Loan, Revolving Credit Loan or
                  Competitive Loan that ends after the Commitment Termination
                  Date or for any Swingline Loan that ends after the date which
                  is three Business Days prior to the Commitment Termination
                  Date; (ii) no Interest Period for any Term Loans may commence
                  before and end after any Principal Payment Date for such Term
                  Loans unless, after giving effect thereto, the aggregate
                  principal amount of such Term Loans having Interest Periods
                  that end after such Principal Payment Date shall be equal to
                  or less than the aggregate principal amount of such Term Loans
                  scheduled to be outstanding after giving effect to the
                  payments of principal required to be made on such Principal
                  Payment Date; and (iii) each Interest Period that would
                  otherwise end on a day which is not a Business Day shall end
                  on the next succeeding Business Day (or, with respect to
                  Eurodollar Loans, if such next succeeding Business Day falls
                  in the next succeeding calendar month, on the next preceding
                  Business Day)."

                  (xiii)   by deleting the definition of "Loans" and
                  substituting therefor the following:

                  "LOANS" shall mean the Increased Commitment Loans, Revolving
                  Credit Loans, Term Loans, Competitive Loans and Swingline
                  Loans.

         (b)      Section 1.03 of the Credit Agreement is deleted and replaced
                  with the following:

                  "1.03 CLASSES; SERIES; TYPE. Loans hereunder are distinguished
                  by "Class". The "Class" of a Loan refers to whether such Loan
                  is an Increased Commitment Loan, a Revolving Credit Loan, a
                  Competitive Loan, a Swingline Loan or a Term Loan,


                                      -5-
<PAGE>

                  each of which constitutes, respectively, a "Class" of Loan.
                  Loans are also distinguished by "Series". The Loans of any one
                  Class made on the occasion of any Borrowing constitute a
                  "Series" of Loans. Loans hereunder are also distinguished by
                  "Type". The "Type" of a Loan refers to whether such Loan is a
                  Base Rate Loan, Eurodollar Loan or a Fixed Rate Loan, each of
                  which constitutes a Type. The Loans may be identified by both
                  Class and Type."

         (c)      Subsection (f) is hereby added to Section 2.01 of the Credit
                  Agreement as follows:

                  "(f)     INCREASED COMMITMENT LOANS. In addition to the Loans
                  provided for in subsections (a), (b), (d) and (e) above of
                  this Section 2.01, each Bank committed to providing an
                  Increased Commitment Amount severally agrees, on the terms and
                  conditions of this Agreement, at the request of the Company,
                  to make Increased Commitment Loans to the Company in Dollars
                  during the Increased Commitment Period in an aggregate
                  principal amount at any one time outstanding up to but not
                  exceeding the amount of the Increased Commitment Amount of
                  such Bank as in effect from time to time (each such increased
                  commitment loan being herein called a "INCREASED COMMITMENT
                  LOAN" and collectively the "INCREASED COMMITMENT LOANS");
                  provided that, 100% of the Original Commitment Amount must be
                  outstanding prior to any Bank making an Increased Commitment
                  Loan; and provided further, upon the expiration of the
                  Increased Commitment Period, in no event shall there be any
                  outstanding Increased Commitment Loans. Subject to the terms
                  and conditions of this Agreement, during such period the
                  Company may borrow, repay and reborrow the amount of the
                  Increased Commitment Amounts by means of Base Rate Loans and
                  Eurodollar Loans, and the Company may Convert Loans of one
                  Type into Loans of another Type (as provided in Section 2.07
                  hereof) or Continue Loans of one Type as Loans of the same
                  Type (as provided in Section 2l07 hereof)."

         (d)      Subsection (e) is hereby added to Section 2.02 of the Credit
                  Agreement as follows:

                  "(e)     INCREASED COMMITMENT LOANS. The Company shall give
                  the Administrative Agent notice with respect to any borrowings
                  of Increased Commitment Loans hereunder in accordance with the
                  terms and provisions of Subsection (a) of this Section 2.02.
                  All provisions of Section 2.02(a) shall also be applicable
                  with respect to Increased Commitment Loans.

         (e)      Section 2.03 (CHANGES IN AGGREGATE AMOUNT OF COMMITMENTS) is
                  deleted and replaced with the following:

                  "2.03    CHANGES IN AGGREGATE AMOUNT OF COMMITMENTS.

                  (a)      The aggregate amount of the Commitments shall be
                  automatically reduced to zero on the Commitment Termination
                  Date.


                                      -6-
<PAGE>

                  (b)      The Company shall have the right at any time or from
                  time to time to terminate in whole, or to reduce in part, the
                  aggregate unused amount of the Commitments; PROVIDED that (x)
                  the Company shall give notice of each such termination or
                  reduction as provided in Section 4.05 hereof, (y) each partial
                  reduction shall be in an integral multiple of $1,000,000 and
                  (z) on or before the Commitment Termination Date, the
                  aggregate amount of the Commitments shall at no time be less
                  than the aggregate outstanding principal amount of all Loans
                  (including the Competitive Loans and the Swingline Loans).

                  (c)      The Company shall have the right to terminate or
                  reduce the unused amount of the Swingline Commitment at any
                  time or from time to time on not less than three Business
                  Days' prior notice to the Administrative Agent (which shall
                  promptly notify the Swingline Bank and each Bank) of each such
                  termination or reduction, which notice shall specify the
                  effective date thereof and the amount of any such reduction
                  (which shall be in integral multiples of $1,000,000) and shall
                  be irrevocable and effective only upon receipt by the
                  Administrative Agent.

                  (d)      The Commitments and Swingline Commitment, once
                  terminated or reduced, may not be reinstated.

                  (e)      On the date ten (10) days after the closing of each
                  Repayment Transaction described in Section 8.18 of the Credit
                  Agreement, the amount of the Increased Commitment Amount shall
                  be reduced proportionately among the Banks by any amount
                  required to be used to repay the Loans pursuant to Section
                  8.18 of the Credit Agreement.

                  (f)      Notwithstanding anything to the contrary herein, any
                  payments received by or on behalf of the Company shall first
                  be applied to reduce the outstanding Increased Commitment
                  Loans, if any."

         (f)      Subsection (g) is added to Section 2.06 of the Credit
         Agreement as follows:

                  "(g)     The Increased Commitment Loans made by each Bank
                  shall be evidenced by a single promissory note of the Company
                  substantially in the form of Exhibit A-5 hereto, dated the
                  date of the Fifth Amendment, payable to such Bank in a
                  principal amount equal to the amount of its increased
                  commitment as originally in effect and otherwise duly
                  completed. The date, amount, Type, interest rate and duration
                  of Interest Period (if applicable) of each Increased
                  Commitment Loan made by each Bank providing such loan to the
                  Company, and each payment made on account of the principal
                  thereof, shall be recorded by such Bank on its books and,
                  prior to any transfer of the Increased Commitment Note
                  evidencing the Increased Commitment Loans held by it, endorsed
                  by such Bank on the schedule attached to such Increased
                  Commitment Note or any continuation thereof; PROVIDED that the
                  failure of such Bank to make any such recordation or
                  endorsement shall not affect the obligations of the Company to
                  make a payment when due of any amount owing hereunder or under
                  such Increased Commitment


                                      -7-
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                  Note in respect of the Increased Commitment Loans evidenced by
                  such Increased Commitment Note."

         (g)      Section 2.07 (OPTIONAL PREPAYMENTS AND CONVERSIONS OR
         CONTINUATIONS OF LOANS) of the Credit Agreement is deleted and replaced
         with the following:

                  "2.07    OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS
                  OF LOANS. Subject to Section 4.04 hereof, the Company shall
                  have the right to prepay Swingline Loans, the Increased
                  Commitment Loans or any Series of Revolving Credit Loans or
                  the Term Loans, in whole at any time or in part from time to
                  time or to Convert Loans of one Type into Loans of another
                  Type or Continue Loans of one Type as Loans of the same Type,
                  PROVIDED that:

                  (a)      the Company shall give the Administrative Agent
                  notice of each such prepayment, Conversion or Continuation as
                  provided in Section 4.05 hereof (and, upon the prepayment date
                  specified in any such notice of prepayment, the amount to be
                  prepaid shall become due and payable hereunder);

                  (b)      the Company shall simultaneously pay interest on any
                  principal so prepaid accrued to the date of such prepayment;

                  (c)      if any Revolving Credit Loan or Increased Commitment
                  Loan that is a Eurodollar Loan is prepaid or Converted on any
                  day other than the last day of the Interest Period therefor,
                  the Company shall simultaneously pay any amounts required by
                  Section 5.05 hereof in respect of such prepayment;

                  (d)      prepayments or Conversions of Term Loans that are
                  Eurodollar Loans may only be made on the last day of any
                  Interest Period therefor and shall be applied ratably to the
                  outstanding installments of such Term Loans;

                  (e)      if any Swingline Loan is outstanding, the Increased
                  Commitment Loans and Revolving Credit Loans may not be prepaid
                  or Converted;

                  (f)      Swingline Loans may not be Continued;

                  (g)      Any payments received by or on behalf of the Company
                  shall first be applied to reduce the outstanding Increased
                  Commitment Loans, if any.

                  The Company shall not have the right to prepay any Competitive
                  Loan without the consent of the Bank making such Competitive
                  Loan.

                  Notwithstanding the foregoing, and without limiting the rights
                  and remedies of the Banks under Section 9 hereof, in the event
                  that any Event of Default shall have occurred and be
                  continuing, the Administrative Agent may (and at the request
                  of the Majority Banks shall) suspend (for so long as such
                  Event of Default shall be continuing) the right of the Company
                  to Convert any Loan into a Eurodollar Loan, or to Continue any
                  Loan as a Eurodollar Loan, in which event


                                      -8-
<PAGE>

                  all Loans shall be Converted (on the last day(s) of the
                  respective Interest Periods therefor) or Continued, as the
                  case may be, as Base Rate Loans."

         (h)      Subsection (a) of Section 3.01 of the Credit Agreement is
         deleted and replaced with the following:

                  "(a)     The Company hereby promises to pay to the
                  Administrative Agent for account of each Bank providing any
                  such Loan (i) the outstanding principal amount of each of such
                  Bank's Increased Commitment Loans, and each Increased
                  Commitment Loan shall mature, upon the expiration of the
                  Increased Commitment Period, (ii) the outstanding principal
                  amount of each of such Bank's Revolving Credit Loans, and each
                  Revolving Credit Loan shall mature, on the Commitment
                  Termination Date and (iii) the outstanding principal amount of
                  each Competitive Loan, and each Competitive Loan shall mature,
                  on the last day of the Interest Period applicable to such
                  Loan."

         (i)      Subsection (a) of Section 3.02 of the Credit Agreement is
         deleted and replaced with the following:

                  "(a)     if such Loan is a Revolving Credit Loan or an
                  Increased Commitment Loan, (i) during such periods as such
                  Loan is a Base Rate Loan, the Base Rate (as in effect from
                  time to time) PLUS the Applicable Margin and (ii) during such
                  periods as such Loan is a Eurodollar Loan, for each Interest
                  Period relating thereto, the Eurodollar Rate for such Loan for
                  such Interest Period PLUS the Applicable Margin;"

         (j)      Section 4.02 of the Credit Agreement is deleted and replaced
         with the following:

                  "4.02    PRO RATA TREATMENT. Except to the extent otherwise
                  provided herein:

                  (a)      the making of Loans of a particular Class (other than
                  Competitive Loans and Swingline Loans) shall be made pro rata
                  among the Banks according to the amounts of their respective
                  Original Commitment Amounts or Increased Commitment Amounts,
                  as the case may be (without taking into account any
                  Competitive Loans or Swingline Loans) and the then current
                  Interest Period of Loans of a particular Class and Series
                  shall be coterminous;

                  (b)      except as otherwise provided in Section 5.04 hereof,
                  Eurodollar Loans having the same Interest Period shall be
                  allocated pro rata among the Banks according to the amounts of
                  their respective Original Commitment Amounts or Increased
                  Commitment Amounts, as the case may be (in the case of the
                  making of Loans) or their respective Loans (in the case of
                  Conversions and Continuations of Loans);

                  (c)      each payment or prepayment of principal of Loans of a
                  particular Class and Series shall be made for account of the
                  Banks pro rata in accordance with the respective unpaid
                  principal amounts of the Loans of such Class and Series held
                  by the Banks;


                                      -9-
<PAGE>

                  (d)      each payment of interest on Loans of a particular
                  Class and Series shall be made for account of the Banks pro
                  rata in accordance with the amounts of interest on Loans of
                  such Class and Series then due and payable to the respective
                  Banks;

                  (e)      each termination or reduction of the amount of the
                  Original Commitment Amounts shall be applied to the Original
                  Commitment Amounts of the Banks, pro rata according to the
                  respective amounts of the Orignal Commitment Amounts of the
                  Banks;

                  (f)      each termination or reduction of the amount of the
                  Increased Commitment Amounts shall be applied to the Increased
                  Commitment Amounts of the Banks, pro rata according to the
                  respective amounts of the Increased Commitment Amounts of the
                  Banks; and

                  (g)      notwithstanding the foregoing, Borrowings, payments
                  and prepayments of Competitive Loans and Swingline Loans shall
                  be made without regard to the foregoing provisions of this
                  Section 4.02.

         (k)      Section 4.04 (MINIMUM AMOUNTS) of the Credit Agreement is
         deleted and replaced with the following:

                  "4.04    MINIMUM AMOUNTS. Except for Conversions, or
                  prepayments made pursuant to Section 5.04 hereof, each
                  Borrowing, Conversion and partial prepayment of principal of
                  Revolving Credit Loans and Increased Commitment Loans shall be
                  in an aggregate amount equal to (i) if it is a Eurodollar
                  Loan, $10,000,000 or any integral multiple of $1,000,000 in
                  excess thereof or (ii) if it is a Base Rate Loan, $5,000,000
                  or integral multiple of $500,000 in excess thereof
                  (Borrowings, Conversions or prepayments of or into Loans of
                  different Types or, in the case of Eurodollar Loans, having
                  different Interest Periods at the same time hereunder to be
                  deemed separate Borrowings, Conversions and prepayments for
                  purposes of the foregoing, one for each Type or Interest
                  Period). Each Conversion of Term Loans shall be in an
                  aggregate amount equal to $3,000,000 or any integral multiple
                  of $200,000 in excess thereof, and each partial prepayment or
                  Conversion of the principal of Term Loans shall be in an
                  aggregate amount at least equal to $500,000 (Conversions or
                  prepayments of or into Loans of different Types or, in the
                  case of Eurodollar Loans, having different Interest Periods at
                  the same time hereunder to be deemed separate Conversions and
                  prepayments for purposes of the foregoing, one for each Type
                  or Interest Period). Each Borrowing or partial prepayment of
                  Swingline Loans shall be in an aggregate amount at least equal
                  to $1,000,000 or in multiples of $200,000 in excess thereof.
                  Each Borrowing or partial prepayment of Competitive Loans
                  shall be in an aggregate amount at least equal to $5,000,000
                  or in multiples of $1,000,000 in excess thereof."

         (l)      Subsection (d) of Section 8.05 of the Credit Agreement is
         deleted and replaced with the following:


                                      -10-
<PAGE>

                  "(d)     Notwithstanding the foregoing paragraphs of this
                  Section 8.05:

                           (i)      any Subsidiary of the Company may be merged
                  or consolidated with or into (x) the Company if the Company
                  shall be the continuing or surviving corporation or (y) any
                  other Subsidiary of the Company; PROVIDED that if any such
                  transaction shall be between a Subsidiary of the Company and a
                  Wholly Owned Subsidiary of the Company, such Wholly Owned
                  Subsidiary shall be the continuing or surviving corporation;
                  PROVIDED FURTHER, the Company shall provide the Agent notice
                  of such transaction within five (5) days of the closing of
                  such transaction;

                           (ii)     the Company or any of its Subsidiaries may
                  purchase equipment, furniture and supplies to be used in the
                  ordinary course of business;

                           (iii)    the Company or any of its Subsidiaries may
                  make Investments permitted by Section 8.08 hereof;

                           (iv)     any Subsidiary of the Company may convey,
                  sell, lease, transfer or otherwise dispose of any or all of
                  its Property (upon voluntary liquidation or otherwise) to the
                  Company or a Wholly Owned Subsidiary of the Company; PROVIDED,
                  the Company shall provide the Agent notice of such transaction
                  within five (5) days of the closing of such transaction; and

                           (v)      the Company or any of its Subsidiaries may
                  convey, sell, lease, transfer or otherwise dispose of (x)
                  equipment no longer used or useful in its business, (y) any
                  portfolio Investment sold or disposed of in the ordinary
                  course of business and (z) any other Investment (including any
                  Investment in the capital stock of Subsidiaries of the Company
                  other than ERC or Asset Guaranty) having a value, together
                  with the value (when sold, leased transferred or otherwise
                  disposed of), of all Investments sold, leased, transferred or
                  otherwise disposed of in reliance on this sub-clause (z), not
                  in excess of $3,000,000."

         (m)      Section 8.18 is hereby added to the Credit Agreement:

                  "Section 8.18 PROCEEDS OF CERTAIN TRANSACTIONS. The Company
                  shall apply 100% of the net proceeds to the Company (net of
                  reasonable costs incurred by the Company, including, but not
                  limited to, legal fees and disbursements, brokers' fees,
                  advisory fees, accountants' fees and disbursements) from any
                  of the transactions described below (the "REPAYMENT
                  Transactions") to repay the Loans. Such repayment shall be
                  made within ten (10) days of the closing of any such Repayment
                  Transaction. The Company shall provide the Agent with a
                  reasonably detailed breakdown (including back-up information,
                  if requested by the Agent or any Bank) of all fees and
                  expenses incurred in connection with such Repayment
                  Transaction within five (5) days of the closing of such
                  Repayment Transaction.

                  (a)      The issuance by the Company of capital stock of any
                  class in the public or private market, including mandatory
                  convertible preferred equity or other capital markets product,
                  other than in connection with (1) the Company's employee or


                                      -11-
<PAGE>

                  director incentive or stock option plans (including, without
                  limitation, the exercise of employee or director stock options
                  issued thereunder) or the Company's Director Stock Ownership
                  Plan or (2) any acquisition by the Company or any of its
                  Subsidiaries of any business otherwise permitted by this
                  Agreement, the consideration for which is, in whole or in
                  part, shares of the capital stock of such class.

                  (b)      Subject to Section 8.05 hereof, the sale of any of
                  the Company's Subsidiaries or the sale, lease, transfer or
                  disposition of any part of its or its Subsidiaries' Asset
                  Based Businesses.

                  (c)      Subject to Section 8.07 hereof, the issuance and sale
                  of any debt in the public or private market by the Company."

         (n)      Subsection (b) of Section 11.06 of the Credit Agreement is
         hereby deleted and replaced with the following:

                  "(b)     Each Bank may, at any time or from time to time,
                  assign to one or more other Persons all or any portion of its
                  Loans, its Notes, and its Commitment (but only with the
                  consent of the Company, the Administrative Agent and the
                  Swingline Bank, which consents shall not be unreasonably
                  withheld); PROVIDED that (i) no such consent by the Company,
                  the Administrative Agent or the Swingline Bank shall be
                  required in the case of any assignment to another Bank; (ii)
                  any such partial assignment shall be in an amount at least
                  equal to $5,000,000 or any integral multiple of $1,000,000 in
                  excess thereof; (iii) each such assignment by a Bank of its
                  Increased Commitment Loans, Increased Commitment Note,
                  Revolving Credit Loans, Revolving Credit Note, Term Loan, Term
                  Loan Note or Commitment shall be made in such manner so that
                  the same portion of its Increased Commitment Loans, Increased
                  Commitment Note Revolving Credit Loans, Revolving Credit Note,
                  Term Loan, Term Loan Note and Commitment is assigned to the
                  respective assignee; (iv) each such assignment shall be
                  effected by an Assignment and Acceptance in substantially the
                  form of Exhibit D hereto. Upon execution and delivery by the
                  assignee to the Company and the Administrative Agent of an
                  Assignment and Acceptance pursuant to which such assignee
                  agrees to become a "Bank" hereunder (if not already a Bank)
                  having the Commitment and Loans specified in such Assignment
                  and Acceptance, and upon consent thereto by the Company and
                  the Administrative Agent, to the extent required above, the
                  assignee shall have, to the extent of such assignment (unless
                  otherwise provided in such assignment with the consent of the
                  Company and the Administrative Agent), the obligations, rights
                  and benefits of a Bank hereunder holding the Commitment and
                  Loans (or portions thereof) assigned to it (in addition to the
                  Commitment and Loans, if any, theretofore held by such
                  assignee) and the assigning Bank shall, to the extent of such
                  assignment, be released from the Commitment (or portion
                  thereof) so assigned. Notwithstanding the foregoing, no
                  assignee or other transferee of any of the rights, obligations
                  or benefits of a Bank in respect of the Loans shall be
                  entitled to receive any greater payment under Sections 5.01,
                  5.05 and 5.06 than such Bank would have been


                                      -12-
<PAGE>

                  entitled to receive with respect to the Loans unless such
                  transfer is made with the Company's prior written consent
                  specifically detailing the nature of the greater payments to
                  be due, or at a time when the circumstances giving rise to
                  such greater payment did not exist or had not been announced.
                  Upon each such assignment the assigning Bank shall pay the
                  Administrative Agent an assignment fee of $3,500."

         (o)      Schedules I and II of the Credit Agreement are hereby deleted
         and replaced in their entirety with Schedules I and II attached hereto,
         respectively.

         (p)      Exhibit A-5 is hereby added to the Credit Agreement as set
         forth in Exhibit A-5 hereto.

         Section 3. CONDITIONS PRECEDENT. This Fifth Amendment shall take effect
from the first day (the "Amendment Effective Date") that the Agent shall have
received counterparts hereof signed by the Company, each of the Banks identified
on the signature pages of this Fifth Amendment, the Swingline Bank and the
Agent, and each of the conditions set forth in this Section 3 has been waived by
each Bank and the Agent or met:

         (a)      The Agent shall have received from the Company a certificate
of a senior officer to the Company, dated the Amendment Effective Date, stating
that:

                  (i)      the representations and warranties contained in
                  Section 7 of the Credit Agreement are correct on and as of the
                  date of such certificate as though made on and as of such date
                  (or, if such representation or warranty is expressly stated to
                  have been made as of a specific date, as of such specific
                  date); and

                  (ii)     no Event of Default or Default has occurred and is
                  continuing or would result from the signing of the Fifth
                  Amendment or the transactions contemplated thereby, in each
                  case taking into account the effect of the amendments being
                  made by this Fifth Amendment.

         (b)      The Agent shall have received a certificate of the Secretary
or an Assistant Secretary of the Company, dated the Amendment Effective Date and
certifying that, except for the certificate of dissolution of Enhance Investment
Corporation, which was filed with the Secretary of State of Delaware on March
16, 2000, amendments, copies of which are attached to such Certificate, the
charters or similar organizational documents of the Company and the Material
Subsidiaries have not been amended since September 29, 1999.

         (c)      The Agent shall have received for the account of each Bank a
duly completed Increased Commitment Note, Revolving Credit Note and a
Competitive Note, each duly executed and delivered by the Company and made
payable to each Bank in the amount of its increased Commitment.

         (d)      The Agent shall have received an opinion, dated the Amendment
Effective Date, of Samuel Bergman, Executive Vice President and General Counsel
of the Company, covering such matters as the Administrative Agent or any Bank
may reasonably request (and the Company hereby instructs such counsel to deliver
such opinion to the Banks and the Agent), in which


                                      -13-
<PAGE>

opinion such counsel may take into account the effect of the amendments being
made by this Fifth Amendment.

         (e)      The Agent shall have received all information, documents,
certificates and opinions of counsel relating to the Company and its
Subsidiaries, as any Bank or the Agent may reasonably request, all in form and
substance satisfactory to the Banks, the Agent and its special counsel.

         (f)      The Agent shall have received payment of a fee for the ratable
benefit of the applicable Banks providing the Increased Commitment Amount equal
to (i) 40 basis points ($75,000) on the extension of the Increased Commitment
Period (as originally defined in the Fourth Amendment) with respect to the
original $18,750,000 increased commitment and (ii) 1.0% ($312,500) on the
additional increased commitment of $31,250,000 during the extended Increased
Commitment Period (as defined herein) and the Agent shall have received payment
of any other fees the Company shall have agreed to pay to the Agent.

         (g)      Day, Berry & Howard LLP, special counsel to the Agent, shall
have received payment of its legal fees and disbursements in connection with the
preparation, negotiation, execution and delivery of this Fifth Amendment.

         Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants as follows:

         (a)      The execution, delivery and performance by the Company of this
Fifth Amendment have been duly authorized by all necessary corporate action and
do not and will not (i) require any consent or approval of its shareholders;
(ii) violate any provisions of its articles of incorporation or by-laws; (iii)
violate any provision of any law, rule, regulation (including without
limitation, Regulation U and X), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to and binding
upon the Company or any Subsidiary, it being understood that the Company may be
required to file a copy of this Fifth Amendment with the Securities and Exchange
Commission in connection with the Company's periodic filing requirements; (iv)
result in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other material agreement, lease or
instrument to which the Company or any Subsidiary is a party or by which it or
its Properties may be bound; or (v) result in, or require, the creation or
imposition of any Lien upon or with respect to any of the Properties now owned
or hereafter acquired by the Company.

         (b)      No authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency, or any
securities exchange, are necessary for the execution or delivery by the Company
of this Fifth Amendment or performance by the Company thereof or for the
legality, validity or enforceability of this Fifth Amendment.

         (c)      This Fifth Amendment constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally and by general principles of equity.


                                      -14-
<PAGE>

         (d)      The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Company or any of its
Subsidiaries to the Agent or any Bank in connection with the negotiation,
preparation or delivery of this Fifth Amendment or delivered pursuant hereto,
when taken as a whole, do not, as of the Amendment Effective Date, contain any
untrue statement of material fact or omit to state any material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading. To the Company's knowledge, there is no
fact peculiar to the Company or any of its Subsidiaries (in contrast to
information of a general economic or industry nature) that could have a Material
Adverse Effect that has not been disclosed herein or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Banks for use in connection with the transactions contemplated hereby.

         Section 5. EFFECT ON THE CREDIT AGREEMENT. The execution, delivery and
effectiveness of this Fifth Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any of the Banks
under the Credit Agreement, nor constitute a waiver of any provision of the
Credit Agreement. On and after the Amendment Effective Date, the rights and
obligations of the parties hereto shall be governed by the Credit Agreement, as
amended hereby.

         Section 6. COSTS, EXPENSES AND TAXES. The Company agrees to pay on
demand all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery and administration of this Fifth Amendment and
any other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and expenses of counsel to the Agent) in
accordance with the terms of Section 11.03 of the Credit Agreement.

         Section 7. EXECUTION IN COUNTERPARTS. This Fifth Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.

         Section 8. GOVERNING LAW. This Fifth Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.

         Section 9. DEFINED TERMS. Until the Amendment Effective Date,
capitalized terms used herein which are not expressly defined herein shall have
the meanings ascribed to them in the Credit Agreement.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK --
                            SIGNATURE PAGES FOLLOW]


                                      -15-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be duly executed and delivered as of the day and year first above written.


                                        ENHANCE FINANCIAL SERVICES GROUP INC.


                                        By: Richard Lutenski
                                            ------------------------------------
                                            Title:


                                      S-1
<PAGE>

           COMMITMENT
 Increased            Original
 Commitment          Commitment
   Amount              Amount

                                        BANKS
                                        -----
$20,000,000         $30,000,000         FLEET NATIONAL BANK


                                        By: /s/ E.B. Shelley
                                           -------------------------------------
                                           Title: Vice President


$         0         $25,000,000         THE BANK OF NEW YORK


                                        By: /s/ Audrey Pollensky
                                           -------------------------------------
                                           Title: VP


$18,750,000         $25,000,000         BANK ONE, NA (MAIN OFFICE CHICAGO)
                                        (FORMERLY KNOWN AS THE FIRST NATIONAL
                                        BANK OF CHICAGO)


                                        By: /s/ Timothy J. Stambaugh
                                           -------------------------------------
                                           Title: TIMOTHY J. STAMBAUGH
                                                  SENIOR VICE PRESIDENT


$11,250,000         $20,000,000         DEUTSCHE BANK AG, NEW YORK AND/OR
                                        CAYMAN ISLAND BRANCHES


                                        By: /s/ John S. Mcgill
                                           -------------------------------------
                                           Title: John S. McGill
                                                  Director

                                        and

                                        By: /s/ Gayma Z. Shivnarain
                                           -------------------------------------
                                           Title: Gayma Z. Shivnarain
                                                  Director


                                      S-2
<PAGE>

                                        SWINGLINE BANK
                                        --------------

                                        FLEET NATIONAL BANK,
                                        as Swingline Bank


                                        By: /s/ E.B. Shelley
                                           -------------------------------------
                                           Title: Vice President


                                        AGENT
                                        -----

                                        FLEET NATIONAL BANK,
                                        as Agent


                                        By: /s/ E.B. Shelley
                                           -------------------------------------
                                           Title: Vice President


                                      S-3
<PAGE>

                                                                     EXHIBIT A-5


                      [Form of Increased Commitment Note]
                                PROMISSORY NOTE

$________________                                      ____________, 2000
New York, New York

         FOR VALUE RECEIVED, ENHANCE FINANCIAL SERVICES GROUP INC., a New York
corporation (the "COMPANY"), hereby promises to pay to the order of
________________ (the "PAYEE"), for the account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
principal office of Fleet National Bank at 777 Main Street, Hartford,
Connecticut 06115, the principal sum of ________________ Dollars (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Increased
Commitment Loans made by the Payee to the Company under the Credit Agreement),
in lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such
Increased Commitment Loan, at such office, in like money and funds, for the
period commencing on the date of such Increased Commitment Loan until such
Increased Commitment Loan shall be paid in full, at the rates per annum and on
the dates provided in the Credit Agreement.

         The date, amount, interest rate and duration of Interest Period of each
Increased Commitment Loan made by the Payee to the Company, and each payment
made on account of the principal thereof, shall be recorded by the Payee on its
books and, prior to any transfer of this Note, endorsed by the Payee on the
schedule attached hereto or any continuation thereof, PROVIDED that the failure
of the Payee to make any such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the Increased Commitment Loans
made by the Payee.

         This Note is one of the Increased Commitment Notes referred to in the
Credit Agreement dated as of June 30, 1998 (as modified and supplemented and in
effect from time to time, the "CREDIT AGREEMENT") among the Company, the banks
party thereto and Fleet National Bank, as Swingline Bank and Administrative
Agent, and evidences Increased Commitment Loans made by the Payee thereunder.
Terms used but not defined in this Note have the respective meanings assigned to
them in the Credit Agreement.


                                      A-1
<PAGE>

         The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.

         Except as permitted by Sections 11.06(b) and 11.06(d) of the Credit
Agreement, this Note may not be assigned by the Payee to any other Person.

         This Note shall be governed by, and construed in accordance with, the
law of the State of New York.


                                        ENHANCE FINANCIAL SERVICES GROUP INC.


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


                                      A-2
<PAGE>

                     SCHEDULE OF INCREASED COMMITMENT LOANS

         This Note evidences Increased Commitment Loans made, Continued or
Converted under the within-described Credit Agreement to the Company, on the
dates, in the principal amounts, of the Types bearing interest at the rates and
having Interest Periods (if applicable) of the durations set forth below,
subject to the payments and prepayments, Continuations, and Conversions of
principal set forth below:

<TABLE>
<CAPTION>
                                                                   Amount
     Date                                                           Paid,
     Made,                 Principal                  Duration     Prepaid,
   Continued     Type       Amount                       of       Continued      Unpaid
      or          of          of        Interest      Interest       or         Principal      Notation
   Converted     Loan        Loan         Rate         Period     Converted      Amount        Made by
   ---------     ----        ----         ----         ------     ---------      ------        -------
<S>             <C>         <C>          <C>          <C>        <C>            <C>           <C>


</TABLE>


                                      A-3