UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(MARK  ONE)
(  X  ) Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act  of  1934  for  the  year  ended  December  31,  2001.

( ) Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act  of  1934  for  the  transition  period  from  ____________  to

____________.

                        Commission File Number:000-24366

                               GORAN CAPITAL INC.
             (Exact name of registrant as specified in its charter)

CANADA                                                           Not  Applicable
State  of  Incorporation                      IRS  Employer  Identification  No.

2  EVA  ROAD,  SUITE  200,  ETOBICOKE,  ONTARIO  CANADA                 M9C  2A8
Address  of  Principal  Executive  Offices                             Zip  Code

Registrant's  telephone  number,  including  area  code: (416) 622-0660   Canada
                                                         (317)  259-6300  -  USA

Securities  registered  pursuant  to  Section  12(b)  of  the  Act: Common Stock

Securities  registered pursuant to Section 12(g) of the Act: None Title of Class


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the Registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days:  Yes(X)  No( )

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of  Registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  Yes(X)  No(  )

The  aggregate  market  value of the 2,333,854 shares of the Registrant's common
stock  held  by  non-affiliates,  as  of  March  27,  2002  was  $1,003,557.

The  number  of  shares  of  common  stock of the Registrant, without par value,
outstanding  as  of  March  27,  2002  was  5,393,698.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  Registrant's Annual Report to Shareholders for the year ended
December  31,  2001  are  incorporated  by  reference in Parts II and IV hereof.
Portions  of  the  Registrant's  Proxy  Statement for the 2002 Annual Meeting of
Shareholders  are  incorporated  by  reference  in  Part  III  hereof.

EXCHANGE  RATE  INFORMATION

The  Company's accounts and financial statements are maintained in U.S. Dollars.
In  this  Report  all  dollar amounts are expressed in U.S. Dollars except where
otherwise  indicated.

The following table sets forth, for each period indicated, the average rates for
U.S.  Dollars expressed in Canadian Dollars on the last day of each month during
such  period,  the  high  and  the  low exchange rate during that period and the
exchange  rate at the end of such period, based upon the noon buying rate in New
York  City  for  cable transfers in foreign currencies, as certified for customs
purposes  by  the  Federal  Reserve  Bank  of New York (the "Noon Buying Rate").

<TABLE>
<CAPTION>

Foreign  Exchange  Rates
U.S.  to  Canadian  Dollars
For  The  Years  Ended  December  31,

<S>          <C>    <C>    <C>    <C>    <C>
             2001   2000   1999   1998   1997
            -----  -----  -----  -----  -----
Average. .  .6461  .6733  .6724  .6745  .7222
Period End  .6287  .6672  .6929  .6532  .6995
High . . .  .6714  .6965  .6929  .7061  .7351
Low. . . .  .6227  .6416  .6625  .6376  .6938
</TABLE>

ACCOUNTING  PRINCIPLES

The  financial  information contained in this document is stated in U.S. Dollars
and  is  expressed  in  accordance  with  Canadian Generally Accepted Accounting
Principles  unless  otherwise  stated.


<TABLE>
<CAPTION>



                                Table of Contents
<S>                     <C>                                                                      <C>
ITEM . . . . . . . . .  PAGE
                                     PART I
Item 1.. . . . . . . .  Business                                                                  4

Item 2.. . . . . . . .  Properties                                                               20

Item 3.. . . . . . . .  Legal Proceedings                                                        21

Item 4.. . . . . . . .  Submission of Matters to a Vote of Security Holders                      25


                                    PART II

Item 5.. . . . . . . .  Market for Registrant's Common Equity and Related Shareholder Matters    26

Item 6.. . . . . . . .  Selected Consolidated Financial Data                                     26

Item 7.. . . . . . . .  Management's Discussion and Analysis of Financial Condition and Results
                        of Operations. . . .                                                     26

Item 7A. . . . . . . .  Quantitative and Qualitative Disclosures About Market Risk               26

Item 8.. . . . . . . .  Financial Statements and Supplementary Data                              26

Item 9.. . . . . . . .  Changes in and Disagreements with Accountants on Accounting and
                        Financial Disclosure                                                     26

                                    PART III

Item 10. . . . . . . .  Directors and Executive Officers of the Registrant                       27

Item 11. . . . . . . .  Executive Compensation                                                   27

Item 12. . . . . . . .  Security Ownership of Certain Beneficial Owners and Management           27

Item 13. . . . . . . .  Certain Relationships and Related Transactions                           27


                                    PART IV

Item 14. . . . . . . .  Exhibits, Financial Statement Schedules, and Reports on Form 8-K         28


Item 15. . . . . . . .  Signatures                                                               36
</TABLE>


                                     PART I

ITEM  1  -  BUSINESS

FORWARD-LOOKING  STATEMENT

All  statements, trend analyses, and other information herein contained relative
to  markets for the Company's products and/or trends in the Company's operations
or  financial  results,  as  well  as  other  statements including words such as
"anticipate,"  "could,"  "feel(s),"  "believes,"  "plan,"  "estimate," "expect,"
"should,"  "intend,"  "will,"  and  other  similar  expressions,  constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995.  These  forward-looking statements are subject to known and unknown risks;
uncertainties  and other factors which may cause actual results to be materially
different  from  those  contemplated  by  the  forward-looking statements.  Such
factors include, among other things:  (i) general economic conditions, including
prevailing  interest  rate  levels  and  stock  market performance; (ii) factors
affecting  the Company's nonstandard automobile operations such as rate increase
approval,  policy  renewals, new business written, and premium volume; and (iii)
the  factors  described  in  this  section  and  elsewhere  in  this  report.

OVERVIEW  OF  BUSINESS

Goran  Capital  Inc.  ("Goran"  or  the  "Company")  is  a  Canadian  federally
incorporated holding company principally engaged in the business of underwriting
property and casualty insurance through its insurance subsidiaries Pafco General
Insurance  Company  ("Pafco") and Superior Insurance Company ("Superior"), which
maintain  their headquarters in Indianapolis, Indiana.  Goran owns approximately
73.1%  of a U.S. holding company, Symons International Group, Inc. ("SIG").  SIG
owns  IGF  Holdings, Inc. ("IGFH") and Superior Insurance Group, Inc. ("Superior
Group")  which  are  the holding companies for the insurance subsidiaries.   SIG
owns  Superior  Insurance  Group  Management, Inc. ("Superior Group Management")
which  is the management company for the insurance subsidiaries.  The operations
of  SIG  accounts  for  94%  of  Goran's  consolidated revenues.  Goran's  other
subsidiaries  include  Granite  Reinsurance Company Ltd. ("Granite Re"), Granite
Insurance  Company  ("Granite"),  and  Symons International Group (Florida) Inc.
("SIGF").

Granite  Re is a specialized reinsurance company that underwrites niche products
such  as  nonstandard automobile, crop, property casualty reinsurance and offers
(on  a  non-risk  bearing,  fee basis), rent-a-captive facilities for Bermudian,
Canadian  and  U.S.  reinsurance  companies.  Through  a rent-a-captive program,
Granite  Re  offers  the  use  of its capital and its underwriting facilities to
write  specific  programs  on  behalf of its clients, including certain programs
ceded  from  IGF  and  Pafco.  Granite Re alleviates the need for its clients to
establish  their  own  insurance  company  and  also  offers this facility in an
offshore  environment.

Granite,  a  Canadian  federally  licensed  insurance  company, sold its book of
business  in  January  1990  to  an  affiliate  which subsequently sold to third
parties  in  June  1990.  Granite  currently  has  seven  outstanding claims and
maintains an investment portfolio sufficient to support those claim liabilities.
Goran  anticipates  that  the  outstanding  claims will be settled by the end of
2002.

As  previously  announced, IGF Insurance Company ("IGF") sold its crop insurance
operations  to  Acceptance  Insurance  Companies  Inc. ("Acceptance") on June 6,
2001and  is  now  in  runoff.  Accordingly, the financial statements included in
this  report  reflect the results of the crop insurance segment as "discontinued
operations."

NONSTANDARD  AUTOMOBILE  INSURANCE

Overview

Pafco, Superior and Superior's subsidiaries, Superior Guaranty Insurance Company
("Superior  Guaranty")  and  Superior  American  Insurance  Company  ("Superior
American")  are  engaged  in  the  writing  of insurance coverage for automobile
physical  damage  and  liability  policies.  Nonstandard  insureds  are  those
individuals  who are unable to obtain insurance coverage through standard market
carriers due to factors such as poor premium payment history, driving experience
or  violations,  particular  occupation  or type of vehicle.  The Company offers
several  different policies, which are directed toward different classes of risk
within  the  nonstandard market.  Premium rates for nonstandard risks are higher
than  for standard risks.  Since it can be viewed as a residual market, the size
of  the  nonstandard  private passenger automobile insurance market changes with
the  insurance  environment  and  grows  when  standard  coverage  becomes  more
restrictive.  Nonstandard  policies have relatively short policy periods and low
limits of liability.  Due to the low limits of coverage, the period of time that
elapses  between  the  occurrence  and  settlement  of  losses under nonstandard
policies  is  shorter  than  many  other  types  of  insurance.  Also, since the
nonstandard  automobile insurance business typically experiences a lower rate of
retention  than  standard  automobile insurance, the number of new policyholders
underwritten  by  nonstandard  automobile  insurance  carriers  each  year  is
substantially  greater  than  the  number  of  new policyholders underwritten by
standard  carriers.

Products

The  Company  offers  both  liability  and  physical  damage  coverage  in  the
nonstandard  automobile  insurance  marketplace, with policies having terms from
three  to  twelve  months.  Most  nonstandard automobile insurance policyholders
choose  the  basic limits of liability coverage which, though varying from state
to  state,  generally  is $25,000 per person and $50,000 per accident for bodily
injury  to  others  and in the range of $10,000 to $20,000 for damage to cars or
other  property.

Primarily,  the  Company  offers  two  policies,  each directed toward different
classes  of  risk  within  the  nonstandard  market.  The Superior Choice policy
offers  insureds  a  lower  cost alternative in exchange for restricted coverage
terms.  The  Superior  Standard  policy  is  intended  for risks who desire more
traditional  auto  coverage.

Where  permitted, Superior offers a five-tier product covering the full spectrum
of  automobile  insurance  customers  from  nonstandard to ultra-preferred.  The
focus  of  the  Company's  marketing, however, is the nonstandard auto insurance
market.

Underwriting

The  Company  utilizes  many  factors  in  determining  its  rates.  Some of the
characteristics  used  are  type,  age  and  location  of the vehicle, number of
vehicles  per  policyholder, number and type of convictions or accidents, limits
of  liability,  deductibles,  and,  where  allowed  by law, credit, age, sex and
marital  status  of the insured.  The rate approval process varies from state to
state. Some states allow filing and immediate use of rates, while others require
approval  by  the  state's  insurance  department prior to the use of the rates.

Underwriting  results  of  insurance  companies are frequently measured by their
combined  ratios.  However,  investment  income,  federal income taxes and other
non-underwriting income or expense are not reflected in the combined ratio.  The
profitability  of  property  and  casualty insurance companies depends on income
from  underwriting, investment and service operations.  Underwriting results are
generally  considered  profitable  when  the  combined  ratio  is under 100% and
unprofitable when the combined ratio is over 100%.  See "Management's Discussion
and  Analysis  of  Financial  Condition and Results of Operations" for a further
discussion  on  the  combined  ratio.

In  an  effort  to  maintain  and  improve  underwriting  profits, the territory
managers  monitor  loss  ratios  of  the  agencies  in  their  regions  and meet
periodically  with  the  agencies in order to address any adverse trends in loss
ratios  or  other  profitability  indicators.

Marketing

The  Company's  nonstandard automobile insurance business is concentrated in the
states  of  Florida,  California,  Virginia, Colorado, and Georgia.  The Company
also  writes  nonstandard  automobile  insurance  in  fifteen additional states.
Although  the Company wrote $9.7 million of business in Pennsylvania in 2001, it
is  prohibited  from  writing  other  than renewal business after July 30, 2001,
based  on  an  agreement  with  the  Indiana  Department  Of Insurance (refer to
Regulatory  Developments  in  Management  Discussion  and  Analysis of Financial
Condition  and  Results of Operations). The Company selects states for expansion
or  withdrawal  based  on  a  number  of  criteria,  including  the  size of the
nonstandard  automobile  insurance market, state-wide loss results, competition,
capitalization  of  its  companies  and  the  regulatory  climate.

The  following  table  sets  forth the geographic distribution of gross premiums
written  by  the Company for the periods indicated sorted in descending order of
2001  volume.


<TABLE>
<CAPTION>

     Goran  Capital  Inc.
     Year  Ended  December  31,  (in  thousands)


<S>                       <C>       <C>       <C>

State . . . . . . . . .   2001      2000      1999
-----------------------  --------  --------  --------

Florida . . . . . . . .  $ 49,162  $ 44,070  $ 67,459

California. . . . . . .    34,287    32,480    29,993

Virginia. . . . . . . .    21,054    20,089    15,470

Georgia . . . . . . . .    15,481    13,670    22,945

Colorado. . . . . . . .    10,112     6,938     8,238

Pennsylvania  (1) . . .     9,683         -         -

Indiana . . . . . . . .     6,275    12,804    23,599

Kentucky. . . . . . . .     3,135     5,034     5,768

Nevada. . . . . . . . .     1,980     3,707     6,954

Tennessee . . . . . . .     1,696     9,794     6,840

Texas . . . . . . . . .     1,267     5,918     2,641

Arizona . . . . . . . .     1,111     4,484    10,912

Iowa. . . . . . . . . .     1,066     2,023     4,028

Oregon. . . . . . . . .     1,008     4,236    12,394

Missouri. . . . . . . .       839     1,929     4,555

Oklahoma. . . . . . . .       635     1,090     1,921
Other states. . . . . .       697     5,156    12,056
                         --------  --------  --------

Total nonstandard auto.   159,488   173,422   235,773

Other property. . . . .     1,604     1,039       628

Reinsurance . . . . . .    32,094     7,638        --
                         --------  --------  --------

Total . . . . . . . . .  $193,186  $182,099  $236,401
                         ========  ========  ========
<FN>

(1)  All  premiums  written  in  Pennsylvania are on the books of IGF, which was
precluded from writing other than renewal premium after July  30,  2001
</TABLE>


The  Company  markets  its  nonstandard products exclusively through independent
agencies.  The Company has several territory managers, each of whom resides in a
specific  marketing  region  and  has  access  to  the  technology  and software
necessary  to  provide  marketing,  rating  and  administrative  support  to the
agencies  in  his  or  her  region.

The  Company  attempts  to foster strong service relationships with its agencies
and  customers.  The  Company  has automated certain marketing, underwriting and
administrative  functions  and has allowed on-line communication with its agency
force.  In  addition  to  delivering  prompt  service  while ensuring consistent
underwriting,  the  Company  offers  rating software to its agents which permits
them  to  rate risks in their offices. Over 90% of new business applications are
electronically  uploaded  directly from the agents office to the company through
this  software.  An  in-house  developed  point of sale product allows agents to
order  motor  vehicle, credit and other reports on line at the time of sale in a
number  of  states  and  will  be  offered  in  all  states  by the end of 2002.

Most  of  the Company's agents have limited authority to sell and bind insurance
coverages  in  accordance with procedures established by the Company, which is a
common  practice  in the nonstandard automobile insurance business.  The Company
reviews  all  coverages  bound  by  the  agents  promptly  and generally accepts
coverages  that  fall  within  its  stated  underwriting  criteria.  In  most
jurisdictions,  the  Company  has  the  right  within a specified time period to
cancel  any  policy even if the risk falls within its underwriting criteria. The
Company  compensates  its agents by paying a commission based on a percentage of
premiums  produced.

The Company believes having four individual companies licensed in various states
allows  it  the flexibility to engage in multi-tiered marketing efforts in which
specialized  automobile insurance products are directed toward specific segments
of  the  market.  Since  certain  state insurance laws prohibit a single insurer
from  offering similar products with different commission structures or, in some
cases premium rates, it is necessary to have multiple licenses in certain states
in  order  to  obtain  the  benefits  of  market  segmentation.

Claims

The  Company's  nonstandard  automobile  claims  department  handles claims on a
regional  and  local basis from claim offices in Indianapolis, Indiana; Atlanta,
Georgia;  Tampa, West Palm Beach and Jacksonville, Florida; Orange and Glendale,
California;  Alexandria,  Virginia; and Lakewood, Colorado. In 2002, the Company
also  has  established  a  new  claim  center  in Virginia Beach, Virginia.  The
Company  uses  a combination of its own adjusters and independent appraisers and
adjusters  for  estimating  physical  damage  claims  and  limited  elements  of
investigation.

Claims  settlement authority levels are established for each adjuster or manager
based  on  the  employee's  ability and level of experience.  Upon receipt, each
claim  is reviewed and assigned to an adjuster based on the type and severity of
the claim. All claim-related litigation is monitored by a home office supervisor
or  litigation  manager.  The claims policy of the Company emphasizes prompt and
fair  settlement  of  meritorious  claims, appropriate reserving for outstanding
claims  and  controlling  claims  adjustment  expenses.

Reinsurance

The  Company  follows the customary industry practice of reinsuring a portion of
its  risks.  Insurance  is ceded principally to reduce the Company's exposure on
large individual risks and to provide protection against large losses, including
catastrophic losses.  Although reinsurance does not legally discharge the ceding
insurer  from  its  primary obligation to pay the full amount of losses incurred
under  policies reinsured, it does render the reinsurer liable to the insurer to
the  extent  provided  by  the  terms of the reinsurance treaty.  As part of its
internal  procedures,  the  Company  evaluates  the  financial condition of each
prospective  reinsurer  before  it cedes business to that carrier.  Based on the
Company's  review  of  its  reinsurers'  financial  health and reputation in the
insurance marketplace, the Company believes its reinsurers are financially sound
and  that  they can meet their obligations to the Company under the terms of the
respective  reinsurance  treaties.

In  2001,  Pafco  and Superior maintained casualty excess of loss reinsurance on
their  nonstandard  automobile  insurance business covering 62.5% of $750,000 of
losses  on  an individual occurrence basis in excess of $250,000 up to a maximum
of  $3  million.

As  of  December  31,  2001,  amounts  recoverable  from  reinsurers relating to
nonstandard  automobile  operations  follows  (in  thousands):


<TABLE>
<CAPTION>


                                                                        Reinsurance
                                                                     Recoverables as of
Reinsurer                                         A.M. Best Rating   December 31, 2001(1)
----------------------------------------------  ------------------  ---------------------

<S>                                                  <C>                          <C>
National Union Fire Ins Comp of Pittsburgh, PA     A++                       $  66,077
Gerling Global Reins Corp of America . . . . .      A                              384
Lloyds of London . . . . . . . . . . . . . . .  Not Rated                        1,102
<FN>

 (1)  Only  recoverables  greater  than  $200,000  are  shown.  Total nonstandard
automobile  reinsurance  recoverables as of December 31, 2000 were approximately
$69,856,000.
(2)  An  A.M.  Best  Rating  of "A++" is the highest of 15 ratings. An A.M. Best
Rating  "A"  is  the  third  highest  of  15  ratings.
</TABLE>


Effective  January  1, 2000, Pafco and Superior entered into an automobile quota
share  agreement  with National Union Fire Insurance Company of Pittsburgh (A.M.
Best rated A++).  The amount of cession for Pafco is variable up to a maximum of
90%  or  $30  million and for Superior is variable up to a maximum of 75% or $70
million for all new and renewal business.  In 2001, Pafco and Superior ceded 54%
of  their  nonstandard  automobile  gross  written  premiums  on new and renewal
business  under  this  treaty.  In addition, SIG ceded a portion of its unearned
premium  reserve  bringing  the  total  cession  to  79%  in  2001.

On  April  29,  1996,  Pafco  also  entered  into a 100% quota share reinsurance
agreement  with  Granite Re whereby all of Pafco's commercial business from 1996
and  thereafter  was  ceded  effective  January  1, 1996.  This agreement was in
effect  during  2001.

Neither  Pafco  nor Superior has any facultative reinsurance with respect to its
nonstandard  automobile  insurance  business.

Competition

The  Company competes with both large national and smaller regional companies in
each  state  in  which  it  operates.  The  Company's  competitors include other
companies  which  serve  the  agency  market,  as  well  as companies which sell
insurance  directly  to  consumers.  Direct writers may have certain competitive
advantages  over agency writers, including increased name recognition, increased
loyalty  of their customer base and, potentially, reduced acquisition costs. The
Company's  primary  competitors  are  Progressive Casualty Insurance Company and
specialty subsidiaries of a number of insurance groups, including AIG, Allstate,
American  Financial  Group and GMAC. Generally, these competitors are larger and
have  greater  financial  resources  than  the  Company.

The  nonstandard automobile insurance business is price sensitive and rates were
decreasing  the  past  several years as competitors moved to protect or increase
their market share.  During 2001, however, competitors aggressively raised rates
in  an  effort  to  improve  underwriting  results.

Recent  Developments

In  January  2000,  SIG  engaged Gene Yerant as the President of its nonstandard
automobile  operations and raised rates an aggregate of 12%, redesigned the auto
insurance product, reduced staff and closed the Tampa processing center.  During
2001, rates were raised an additional 24%, financial reporting was automated and
a  new  in-house  processing  system  was  developed.  SIG  is in the process of
converting  its  business  to  this  system.

Beginning  in  the fourth quarter of 2001 and continuing in January and February
2002,  SIG sustained adverse loss experience on a substantial portion of its new
business  written in certain markets. In late February and early March 2002, SIG
commenced  further  analysis of loss ratios by individual agency and a review of
claim settlement procedures. Based on this and other analysis, SIG has as of the
filing of this document, or plans to before the end of the second quarter, taken
the  following  actions to improve its financial position and operating results:

- Eliminated reinstatements in all markets, i.e., upon policy cancellation, the
insured  must  obtain  a  new  policy  at  prevailing  rates  and  underwriting
guidelines;

- Terminated  or  placed on new business moratorium several hundred agents
whose  loss  ratios  were  abnormally  high when compared to the average for the
remaining  agents  (these  agents  accounted  for approximately 16% of the total
gross  written  premium  in  2001);

- Increased underwriting requirements in certain markets including: higher down
payments,  new  policy  fees,  and  shorter  policy  terms;

- Hired a consultant with significant auto claims experience to review processes
and  suggest  modifications  to  the  claims  function.

SIG  expects the above actions to result in a decline of approximately 10 to 15%
in  gross  written  premiums  from  2001 levels with a corresponding decrease in
management  fees  payable  to  Superior Group, offset by reductions in operating
expenses  due  to  process  changes  and  efficiencies.

RESERVES  FOR  LOSSES  AND  LOSS  ADJUSTMENT  EXPENSES

Loss reserves are estimates, established at a given point in time based on facts
then  known  and  assumptions  believed  to  be  reasonable,  of what an insurer
predicts its exposure to be in connection with incurred losses.  Loss adjustment
expense  reserves  are  estimates  of the ultimate liability associated with the
expense  of  settling  all  claims, including investigation and litigation costs
resulting  from  such  claims. The actual liability of an insurer for its losses
and  loss  adjustment  expense  reserves at any point in time will be greater or
less  than  these  estimates.

The  Company  maintains  reserves  for  the  eventual payment of losses and loss
adjustment  expenses  with  respect  to  both  reported  and  unreported claims.
Nonstandard  automobile  reserves  for  reported  claims  are  established  on a
case-by-case  basis. The reserving process takes into account the type of claim,
policy provisions relating to the type of loss and historical paid loss and loss
adjustment  expense  for  similar  claims.

Loss and loss adjustment expense reserves for claims that have been incurred but
not  reported  are  estimated  based  on many variables including historical and
statistical  information,  inflation,  legal  developments, economic conditions,
trends  in  claim severity and frequency and other factors that could affect the
adequacy  of  loss  reserves.

The  recorded  loss  reserves  of  SIG  and  Granite Re at December 31, 2001 are
certified  by the Company's Vice President and Chief Actuary.  The recorded loss
reserves  of  Granite  at  December  31,  2001  are  certified by an independent
actuary.

The following loss reserve development table illustrates the change over time of
reserves  established  for  loss  and loss expenses as of the end of the various
calendar years for the nonstandard automobile segment of the Company.  The table
includes the loss reserves acquired from the acquisition of Superior in 1996 and
the  related  loss  reserve development thereafter.  The first section shows the
reserves  as  originally  reported  at  the  end of the stated year.  The second
section,  reading  down,  shows  the  cumulative  amounts  paid as of the end of
successive  years  with  respect  to  the reserve liability.  The third section,
reading  down, shows the re-estimates of the original recorded reserve as of the
end  of  each  successive  year  which  is a result of sound insurance reserving
practices  of  addressing emerging facts and circumstances which indicate that a
modification of the prior estimate is necessary.   The last section compares the
latest re-estimated reserve to the reserve originally established, and indicates
whether  or  not  the  original  reserve was adequate or inadequate to cover the
estimated  costs  of  unsettled  claims.

The loss reserve development table is cumulative and, therefore, ending balances
should  not  be added since the amount at the end of each calendar year includes
activity  for  both  the  current  and  prior  years.

The  reserve  for  losses and loss adjustment expenses is an accumulation of the
estimated  amounts necessary to settle all outstanding claims as of the date for
which the reserve is stated.  The reserve and payment data shown below have been
reduced  for  estimated subrogation and salvage recoveries. The Company does not
discount  its  reserves for unpaid losses and loss expenses.  No attempt is made
to  isolate  explicitly  the  impact  of inflation from the multitude of factors
influencing  the  reserve  estimates, though inflation is implicitly included in
the  estimates.  The  Company regularly updates its reserve forecasts by type of
claim  as  facts  become  known  and events occur which affect unsettled claims.


<TABLE>
<CAPTION>

<PAGE>

Goran  Capital  Inc.
Nonstandard  Automobile  Insurance  Only
For  The  Years  Ended  December  31,  (in  thousands)

                   1991      1992      1993      1994      1995       1996       1997       1998       1999     2000     2001
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------  ------
<S>              <C>       <C>       <C>       <C>       <C>        <C>        <C>        <C>        <C>       <C>      <C>

Gross
reserves for
 unpaid losses.
 and LAE. . . .                    $27,403   $25,248   $71,748   $79,551   $101,185   $121,661   $141,260   $103,441  $79,047
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------
Deduct
 Reinsurance
 Recoverable. .                    12,581    10,927     9,921     8,124     16,378      6,515      3,167     18,709    28,511
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------
Reserve for
 unpaid losses
 and LAE, net
 of
reinsurance . .  $15,682   $17,055    14,822    14,321     61,827     71,427     84,807    114,829   138,093   84,732   50,536
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------  ------
Paid
 Cumulative
 as
 of:
One Year
 Later. . . . .    7,519    10,868     8,875     7,455     42,183     59,410     62,962     85,389    81,444   57,696
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Two Years
 Later. . . . .   12,358    15,121    11,114    10,375     53,350     79,319     89,285    111,042   107,534       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Three Years
 Later. . . . .   13,937    16,855    13,024    12,040     58,993     86,298     98,469    121,907        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Four Years
 Later. . . . .   14,572    17,744    13,886    12,822     61,650     89,166    102,854         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Five Years
 Later. . . . .   14,841    18,195    14,229    13,133     62,621     90,477         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Six Years
 Later. . . . .   14,992    18,408    14,330    13,375     63,031         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Seven Years
 Later. . . . .   15,099    18,405    14,426    13,418         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Eight Years
 Later. . . . .   15,095    18,460    14,386        --         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Nine Years
 Later. . . . .   15,135    18,411        --        --         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Ten Years
 Later. . . . .   15,086        --        --        --         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Liabilities re
-estimated as
 of:
One Year
 Later. . . . .   14,453    17,442    14,788    13,365     59,626     82,011     97,905    131,256   124,012   85,538
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Two Years
 Later. . . . .   14,949    18,103    13,815    12,696     60,600     91,743    104,821    128,302   121,480       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Three Years
 Later. . . . .   15,139    18,300    14,051    13,080     63,752     91,641    104,551    127,885        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Four Years
 Later. . . . .   15,218    18,313    14,290    13,485     63,249     91,003    105,012         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Five Years
 Later. . . . .   15,198    18,419    14,499    13,441     63,233     91,323         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Six Years
 Later. . . . .   15,114    18,533    14,523    13,592     63,373         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Seven Years
 Later. . . . .   15,157    18,484    14,584    13,652         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Eight Years
 Later. . . . .   15,145    18,508    14,574        --         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Nine Years
 Later. . . . .   15,165    18,494        --        --         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Ten Years
 Later. . . . .   15,157        --        --        --         --         --         --         --        --       --
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Ne
t cumulative
 (deficiency)
 or
 redundancy . .      525    (1,439)      248       669     (1,546)   (19,896)   (20,205)   (13,056)   16,613     (806)
                 --------  --------  --------  --------  ---------  ---------  ---------  ---------  --------  -------
Expressed as
 a percentage
 of unpaid
 losses and
 LAE. . . . . .      3.3%    (8.4%)      1.7%      4.7%     (2.5%)    (27.9%)    (23.8%)    (11.4%)     12.0%   (1.0%)
</TABLE>


<TABLE>
<CAPTION>

Revaluation of gross
---------------------------------
Losses  and LAE as of
---------------------------------
Year-end 2001:
---------------------------------
<S>                                <C>      <C>      <C>      <C>       <C>       <C>       <C>      <C>

Cumulative Gross Paid as
of Year-end  2001 . . . . . . . .  27,072   24,788   73,164    98,585   120,942   125,070   108,213   73,484
                                   -------  -------  -------  --------  --------  --------  -------  --------
Gross liabilities re
-estimated as of  year-end 2001 .  27,674   25,461   73,976    99,901   123,570   131,999   123,310  104,850
                                   -------  -------  -------  --------  --------  --------  -------  --------
Gross cumulative
(deficiency) or  redundancy . . .    (271)    (213)  (2,228)  (20,350)  (22,385)  (10,338)   17,950   (1,409)
---------------------------------  -------  -------  -------  --------  --------  --------  -------  --------
</TABLE>



Activity  in  the  liability  for  unpaid  loss and loss adjustment expenses for
nonstandard  automobile  insurance  is  summarized  below  (in  thousands):

<TABLE>
<CAPTION>

                                        2001      2000       1999
                                      --------  ---------  --------
<S>                                      <C>       <C>        <C>
Balance at January 1,. . . . . . . .  $108,117  $152,455   $134,024
       Less Reinsurance Recoverables    23,252    13,527     17,844
                                      --------  ---------  --------
       Net Balance at January 1, . .    84,865   138,928    116,180

Incurred related to
       Current Year. . . . . . . . .    69,667   127,497    214,606
       Prior Years . . . . . . . . .       774   (14,118)    16,367
                                      --------  ---------  --------
       Total Incurred. . . . . . . .    70,441   113,379    230,973

Paid Related to
       Current Year. . . . . . . . .    46,973    85,334    122,380
       Prior Years . . . . . . . . .    57,791    82,108     85,845
                                      --------  ---------  --------
       Total Paid. . . . . . . . . .   104,764   167,442    208,225

Net Balance at December 31,. . . . .    50,542    84,865    138,928
Plus Reinsurance Balance . . . . . .    30,600    23,252     13,527
                                      --------  ---------  --------
Balance at December 31,. . . . . . .  $ 81,142  $108,117   $152,455
                                      ========  =========  ========
</TABLE>

<PAGE>

RATINGS

A.M.  Best  has currently assigned a "B-" rating to Superior and a "C" rating to
Pafco.  A.M. Best's ratings are based upon a comprehensive review of a company's
financial  performance,  which  is  supplemented  by  certain  data,  including
responses  to  A.M.  Best's questionnaires, phone calls and other correspondence
between A.M. Best analysts and company management, quarterly NAIC filings, state
insurance  department examination reports, loss reserve reports, annual reports,
company business plans and other reports filed with state insurance departments.
A.M.  Best  undertakes  a  quantitative  evaluation,  based  upon profitability,
leverage and liquidity, and a qualitative evaluation, based upon the composition
of  a  company's book of business or spread of risk, the amount, appropriateness
and  soundness of reinsurance, the quality, diversification and estimated market
value  of  its  assets,  the  adequacy  of  its loss reserves and policyholders'
surplus,  the  soundness  of  a  company's  capital  structure,  the extent of a
company's  market  presence and the experience and competence of its management.
A.M.  Best's  ratings  represent an independent opinion of a company's financial
strength  and  ability  to  meet  its obligations to policyholders.  A.M. Best's
ratings  are  not  a  measure  of  protection  afforded investors.  "B-" and "C"
ratings  are  A.M.  Best's  eighth  and eleventh highest rating classifications,
respectively,  out  of  fifteen  ratings.  A  "B-" rating is awarded to insurers
which,  in  A.M.  Best's  opinion,  "have,  on balance, fair financial strength,
operating  performance  and  market  profile  when  compared  to  the  standards
established by the A.M. Best Company" and "have an ability to meet their current
obligations  to  policyholders,  but  their  financial strength is vulnerable to
adverse  changes  in  underwriting  and  economic  conditions".  A "C" rating is
awarded  to  insurers  which,  in  A. M. Best's opinion, "have, on balance, weak
financial  strength,  operating  performance and market profile when compared to
the standards established by the A.M. Best Company" and "have an ability to meet
their current obligations to policyholders, but their financial strength is very
vulnerable  to  adverse  changes  in  underwriting  and  economic  conditions".

A.M. Best has currently assigned an "E" rating (Under Regulatory Supervision) to
IGF  reflecting the significant regulatory constraint resulting from the Consent
Order  entered  into  between  IGF  and the Indiana Department Of Insurance (see
"Recent  Regulatory  Developments",  below).

REGULATION

General

The  Company's  U.S. insurance businesses are subject to comprehensive, detailed
regulation  throughout  the  United  States,  under  statutes  which  delegate
regulatory,  supervisory  and  administrative  powers  to  state  insurance
commissioners.  The  primary  purpose of such regulations and supervision is the
protection  of  policyholders  and  claimants  rather than stockholders or other
investors.  Depending  on whether an insurance company is domiciled in the state
and whether it is an admitted or non-admitted insurer, such authority may extend
to  such  things as (i) periodic reporting of the insurer's financial condition;
(ii)  periodic  financial examination; (iii) approval of rates and policy forms;
(iv) loss reserve adequacy; (v) insurer solvency; (vi) the licensing of insurers
and  their  agents;  (vii)  restrictions  on  the payment of dividends and other
distributions;  (viii)  approval  of  changes  in control; and (ix) the type and
amount  of  permitted  investments.

The  losses, adverse trends and uncertainties discussed in this report have been
and  continue  to  be  matters of concern to the domiciliary and other insurance
regulators  of the Company's U.S. insurance subsidiaries (see "Recent Regulatory
Developments"  and  "Risk-Based Capital Requirements" and "RISK FACTORS" below).

Recent  Regulatory  Developments

Pafco  has  been  subject  to  an  agreed  to order of the Indiana Department of
Insurance  ("IDOI")  since  February 17, 2000, which requires Pafco, among other
matters,  to:

-     Refrain  from  doing any of the following without the IDOI's prior written
consent: selling assets or business in force or transferring property, except in
the  ordinary  course  of  business;  disbursing funds, other than for specified
purposes or for normal operating expenses and in the ordinary course of business
(which  does  not  include  payments  to  affiliates,  other  than under written
contracts  previously  approved  by  the  IDOI, and does not include payments in
excess of $10,000); lending funds; making investments, except in specified types
of investments; incurring debt, except in the ordinary course of business and to
unaffiliated parties; merging or consolidating with another company, or entering
into  new,  or  modifying  existing,  reinsurance  contracts.

-     Reduce  its  monthly auto premium writings, or obtain additional statutory
capital  or surplus, such that the ratio of gross written premium to surplus and
net  written  premium  to surplus does not exceed 4.0 and 2.4, respectively; and
provide  the  IDOI  with  regular  reports  demonstrating  compliance with these
monthly  writings limitations.  Restrictions on premium writings would result in
lower  premium volume and management fees payable to Superior Group are based on
gross  written  premium;  therefore,  lower  premium  volume  results in reduced
management  fees  paid  by  Pafco.

-     Continue  to  comply  with  prior  IDOI  agreements  and orders to correct
business  practices,  under  which  (as previously disclosed) Pafco must provide
monthly  financial  statements  to  the  IDOI,  obtain  prior  IDOI  approval of
reinsurance  arrangements  and of affiliated party transactions, submit business
plans  to  the IDOI that address levels of surplus and net premiums written, and
consult  with  the  IDOI  on  a  monthly  basis.

Pafco  is  in compliance with the order.  Pafco's inability or failure to comply
with  any  of the above could result in the IDOI requiring further reductions in
Pafco's permitted premium writings or in the IDOI instituting future proceedings
against  Pafco.

Pafco  has  agreed  with the Iowa Department of Insurance ("IADOI") that it will
not  write any new nonstandard business until such time as Pafco has reduced its
overall  nonstandard  automobile  policy  counts  in  the  state  or  has:

-     Increased  surplus,  or
-     Has  a  net written premium to surplus ratio of less than three to one, or
-     Has  a  surplus  reasonable  to  its  risk.

Pafco has continued to service existing policyholders and renew policies in Iowa
and  provide  policy  count  information  on a monthly basis in conformance with
IADOI  requirements.

The  Florida  Department of Insurance ("FDOI") concluded its financial review of
Superior  for  the  year  ended  December  31, 1999, and issued its final report
during  the  fourth  quarter  of  2001.  The  FDOI's  final  report  recommended
additional  examination  of compliance issues and financial records accuracy for
years  subsequent  to  1999.  Superior  is  required to submit monthly financial
information  to  the  FDOI, including a demonstration that it has not exceeded a
ratio  of  net  written  premiums  to  surplus  of  four  to  one.

On  July  7, 2000, the FDOI issued a notice of its intent to issue an order (the
"Notice"),  which  principally addressed certain policy and finance fee payments
by  Superior  to  Superior Group.  A formal administrative hearing to review the
Notice  and  a  determination  that  the order contemplated by the Notice not be
issued  was  held  in  February  2001.  The  administrative  law judge entered a
recommended  order  on  June  1, 2001 that was acceptable to SIG.  On August 30,
2001,  the  FDOI rejected the recommended order and issued its final order which
SIG  believes  improperly characterized policy fees paid by Superior to Superior
Group  and  which seeks repayment of approximately $15 million by Superior Group
to Superior.  On September 28, 2001, Superior filed an appeal of the final order
to  First  District  Court of Appeal of the State of Florida.  On March 4, 2002,
the  FDOI  filed  a  petition in the Circuit Court of Leon County, Florida which
seeks  enforcement  of the FDOI's final order.  Superior filed a motion with the
FDOI  for stay of the FDOI's final order.  Superior also filed a motion with the
District  Court  of  Appeals, which was denied pending a ruling from the FDOI on
Superior's  motion  for  stay.

In  1999,  Superior ceased writing business in Illinois and agreed to obtain the
approval  of  the  Illinois  Department  of  Insurance  prior to writing any new
business  in  Illinois.  In  July  2001,  Superior agreed with the Department of
Insurance  in Texas to obtain its prior approval before writing any new business
in that state.  On October 9, 2001, the State Corporation Commission of Virginia
issued  an order to take notice regarding an order suspending Superior's license
to  write  business  in  that state, which Superior believes is unwarranted.  An
administrative  hearing  for  a  determination  that the suspension order not be
issued  was  held  March 5, 2002. The non-standard automobile insurance policies
written in Virginia by Superior accounted for approximately 13.1% of SIG's total
gross  written  premiums  in  2001.  A  decision  has not yet been rendered, and
although Superior does not expect an adverse decision, Superior would appeal any
decision  that  prohibits  it  from  writing  business  in  Virginia.

On  June  6,  2001  IGF  sold  substantially all of its crop insurance assets to
Acceptance.  On June 29, 2001, following the sale of IGF's crop insurance assets
and  as  a result of losses experienced by IGF in its crop insurance operations,
the  IDOI and IGF entered into a Consent Order (the "Consent Order") relating to
IGF.  IGF has discontinued writing new business and its operations are presently
in  run  off.

The  IDOI  has  continued  to  monitor  the  status  of  IGF.  The Consent Order
prohibits  IGF  from  taking  any of the following actions without prior written
consent  of  the  IDOI:

-     Sell  or  encumber  any  of  its  assets,  property, or business in force,
-     Disburse  funds, except to pay direct unaffiliated policyholder claims and
normal  operating  expenses  in  the ordinary course of business (which does not
include  payment to affiliates except for the reimbursement of costs for running
IGF  by  SIG,  and  does  not  include  payments  in  excess  of  $10,000),
-     Lend  its  funds  or  make  investments,  except  in  specified  types  of
investments,
-     Incur  debts  or obligations, except in the ordinary course of business to
unaffiliated  parties,
-     Merge  or  consolidate  with  another  company;
-     Enter  into  new,  or  amend  existing,  reinsurance  agreements,
-     Complete,  enter  into  or  amend  any  transaction or arrangement with an
affiliate,  or
-     Disburse  funds  or  assets  to  any  affiliate.

The  Consent Order requires IGF to provide the IDOI with monthly written updates
and  immediate notices of any material change regarding the status of litigation
with  Mutual  Service  Casualty  Insurance Company and with Continental Casualty
Company,  statutory  reserves,  number  of  non-standard  automobile  insurance
policies in-force by state, and reports of all non-claims related disbursements.
IGF's  failure  to  comply  with the Consent Order could cause the IDOI to begin
proceedings  to  have  a rehabilitator or liquidator appointed for IGF to extend
the  provisions  of  the  Consent  Order.

While  IGF  is  prohibited from writing any new business pursuant to the Consent
Order,  the  departments of insurance of Florida, Illinois, Minnesota, Missouri,
Nebraska,  Virginia  and  South  Carolina  have  required  IGF  to cease writing
business in those states.  IGF has also agreed with the departments of insurance
of Texas and Washington to not write business in those states, and IGF presently
intends  to  surrender  its certificates of authority in most states in which it
operated  prior  to  the  sale  to  Acceptance.

As  a  result  of  the  Consent  Order,  IGF  was  prohibited  from  writing new
non-standard automobile insurance in Pennsylvania after July 31, 2001.  Prior to
July  31,  2001,  the  non-standard  automobile  insurance  policies  written in
Pennsylvania  by  IGF accounted for approximately 10% of the total gross written
premiums  of SIG.  During the third quarter of 2001, the Pennsylvania Department
of  Insurance  determined that it would not permit new business to be written in
that  state  by  Superior  or  SIG's  other  insurance  company  subsidiaries.
Therefore,  total  written premiums for 2001 were less than anticipated. For the
year  ended  December  31,  2001, Pennsylvania premiums were 6.0% of SIG's total
written  premiums.

Insurance  Holding  Company  Regulation

SIG also is subject to laws governing insurance holding companies in Florida and
Indiana,  where  its  insurance company subsidiaries are domiciled.  These laws,
among  other  things,  (i)  require  SIG to file periodic information with state
regulatory  authorities  including information concerning its capital structure,
ownership,  financial  condition  and general business operations; (ii) regulate
certain  transactions  between  SIG  and its affiliates, including the amount of
dividends  and  other  distributions  and  the terms of surplus notes; and (iii)
restrict the ability of any one person to acquire certain levels of SIG's voting
securities  without  prior  regulatory  approval.

Any  purchaser  of  10% or more of the outstanding shares of common stock of SIG
would  be  presumed to have acquired control of Pafco and IGF unless the Indiana
Commissioner  of  Insurance  ("Indiana  Commissioner")  upon  application,  has
determined  otherwise.  In  addition,  any  purchaser  of  5%  or  more  of  the
outstanding  shares  of  common  stock of SIG would be presumed to have acquired
control  of  Superior  unless  the  Florida  Commissioner of Insurance ("Florida
Commissioner"),  upon  application,  has  determined  otherwise.

Dividend  payments  by  SIG's insurance subsidiaries are subject to restrictions
and  limitations  under  applicable laws under which an insurance subsidiary may
not  pay  dividends  to  SIG  without  prior  notice  to,  or  approval  by, the
subsidiary's  domiciliary  insurance  regulator.  The  1996  FDOI  consent order
approving  SIG's  acquisition  of  Superior, prohibited Superior from paying any
dividends  for  four  years from the date of acquisition without prior approval.
This restriction expired in April 2000.  As a result of regulatory actions taken
by  the  IDOI  with  respect  to  Pafco  and IGF, those subsidiaries may not pay
dividends  to  SIG  without  prior  approval by the IDOI (see "Recent Regulatory
Developments"  above).  Further,  payment  of  dividends  may  be constrained by
business and regulatory considerations, and state insurance laws and regulations
require  that  the  statutory  surplus  of  an  insurance  company following any
dividend  or  distribution  by  such  company  be  reasonable in relation to its
outstanding  liabilities  and  adequate  for  its financial needs.  Accordingly,
there  can  be  no assurance that the IDOI or the FDOI would permit any of SIG's
insurance subsidiaries to pay dividends at this time or in the future (see "RISK
FACTORS").

While  SIG's  non-insurance company subsidiaries are not subject directly to the
dividend  and  other  distribution  limitations,  insurance  holding  company
regulations  govern  the  amount  which  a subsidiary within the holding company
system  may  charge  any of the insurers for services (e.g., management fees and
commissions).  These  regulations may affect the amount of management fees which
may  be  paid by Pafco and Superior to Superior Group.  The management agreement
between  Pafco and Superior Group provides for an annual management fee equal to
15%  of  gross  premiums. The management agreement between Superior and Superior
Group provides for an annual management fee of 17% of gross premiums.  There can
be  no assurance that either the IDOI or the FDOI will not in the future require
a  reduction  in  these  management  fees.

In  addition,  neither  Pafco  nor  IGF  may  engage  in any transaction with an
affiliate,  without  the  prior  approval  of  the  IDOI (see "Recent Regulatory
Developments"  above).

Underwriting  and  Marketing  Restrictions

During  the  past  several years, various regulatory and legislative bodies have
adopted  or proposed new laws or regulations to deal with the cyclical nature of
the  insurance industry, catastrophic events and insurance capacity and pricing.
These  regulations  include  (i) the creation of "market assistance plans" under
which  insurers  are  induced to provide certain coverages; (ii) restrictions on
the  ability  of  insurers  to  rescind  or otherwise cancel certain policies in
mid-term;  (iii)  advance notice requirements or limitations imposed for certain
policy  non-renewals;  and (iv) limitations upon or decreases in rates permitted
to  be  charged.

Insurance  Regulatory  Information  System

The  NAIC  Insurance  Regulatory  Information  System  ("IRIS")  was  developed
primarily  to  assist  state  insurance departments in executing their statutory
mandate  to oversee the financial condition of insurance companies.  IRIS ratios
consist  of  twelve  ratios with defined acceptable ranges.  They are used as an
initial  screening  process  for  identifying  companies  that may be in need of
special  attention.  Companies that have several ratios that fall outside of the
acceptable  range  are  selected  for  closer  review  by the NAIC.  If the NAIC
determines  that  more  attention  may  be  warranted,  one  of  five  priority
designations  is  assigned and the insurance department of the state of domicile
is  then  responsible  for  follow-up  action.

During  2001,  Pafco  had  values outside of the acceptable ranges for five IRIS
tests.  These  included  the  change  in  net writings ratio, the surplus aid to
surplus ratio, the two-year overall operating ratio, the investment yield ratio,
and  the  change  in  surplus  ratio.

During  2001, Superior had values outside of the acceptable ranges for four IRIS
tests.  These  included  the  change  in  net writings ratio, the surplus aid to
surplus  ratio,  the two-year overall operating ratio, and the change in surplus
ratio.

During  2001,  IGF  had  values  outside of the acceptable ranges for eight IRIS
tests.  These  included  the gross premiums to surplus ratio, the net premium to
surplus  ratio, the change in net writings ratio, the two-year overall operating
ratio,  the investment yield ratio, the change in surplus ratio, the liabilities
to  liquid  assets  ratio,  and  the  agents'  balances  to  surplus  ratio.

Risk-Based  Capital  Requirements

In  order  to enhance the regulation of insurer solvency, the NAIC has adopted a
formula  and  model law to implement risk-based capital ("RBC") requirements for
property  and  casualty  insurance  companies designed to assess minimum capital
requirements  and  to  raise  the  level  of  protection  that statutory surplus
provides  for  policyholder obligations.  Indiana and Florida have substantially
adopted  the  NAIC  model law and Indiana directly, and Florida indirectly, have
adopted  the  NAIC  model  formula.  The  RBC  formula for property and casualty
insurance  companies  measures  four  major  areas  of  risk facing property and
casualty  insurers: (i) underwriting, which encompasses the risk of adverse loss
developments  and inadequate pricing; (ii) declines in asset values arising from
credit  risk;  (iii) declines in asset values arising from investment risks; and
(iv)  off-balance sheet risk arising from adverse experience from non-controlled
assets,  guarantees  for  affiliates,  contingent  liabilities  and  reserve and
premium  growth.  Pursuant  to  the  model  law,  insurers having less statutory
surplus  than  that  required  by the RBC calculation will be subject to varying
degrees  of  regulatory  action,  depending  on the level of capital inadequacy.

The  RBC  model law provides for four levels of regulatory action. The extent of
regulatory  intervention  and  action  increases  as the level of surplus to RBC
falls.  The  first  level,  the  Company  Action Level (as defined by the NAIC),
requires  an  insurer to submit a plan of corrective actions to the regulator if
surplus falls below 200% of the RBC amount. The Regulatory Action Level requires
an  insurer  to  submit  a  plan  containing corrective actions and requires the
relevant  insurance commissioner to perform an examination or other analysis and
issue  a  corrective  order  if surplus falls below 150% of the RBC amount.  The
Authorized  Control  Level  gives the relevant insurance commissioner the option
either  to  take  the aforementioned actions or to rehabilitate or liquidate the
insurer  if  surplus falls below 100% of the RBC amount. The fourth action level
is the Mandatory Control Level that requires the relevant insurance commissioner
to  rehabilitate  or liquidate the insurer if surplus falls below 70% of the RBC
amount.  Based  on  the  foregoing  formula,  as  of  December 31, 2001, the RBC
calculations  for  Superior and Pafco were in excess of 200% and the calculation
for  IGF  was  in  excess  of  100%,  or  above  authorized  Control  Level.

Guaranty  Funds;  Residual  Markets

The  Company's insurance subsidiaries also may be required under the solvency or
guaranty laws of most states in which they do business to pay assessments (up to
certain  prescribed  limits)  to  fund  policyholder  losses  or  liabilities of
insolvent  or  rehabilitated  insurance  companies.  These  assessments  may  be
deferred  or  forgiven  under  most  guaranty  laws  if  they  would threaten an
insurer's  financial  strength  and, in certain instances, may be offset against
future  premium  taxes.  Some  state  laws  and  regulations  further  require
participation by the insurance company subsidiaries in pools or funds to provide
some  types  of  insurance  coverage that they would not ordinarily accept.  The
Company's  affiliates  recognize their obligations for guaranty fund assessments
when  they  receive  notice  that  an amount is payable to a fund.  The ultimate
amount  of  these  assessments  may  differ  from  that  which  has already been
assessed.

It  is  not  possible to predict the future impact of changing state and federal
regulation  on  the Company's operations and there can be no assurance that laws
and regulations enacted in the future will not be more restrictive than existing
laws.

Employees

At  March  1,  2002  the Company and its subsidiaries employed approximately 347
full  and  part-time  employees.  None  of  the  Company's  employees,  or  its
subsidiaries'  employees,  is represented either unions or collective bargaining
agreements.  The  Company  believes  that  relations  with  these  employees are
excellent.

RISK  FACTORS

The  following  factors,  in addition to the other information contained in this
report  should  be  considered  in  evaluating  the  Company  and its prospects.

Significant  Losses  Have  Been  Reported  and  May  Continue

Losses  from  continuing  operations  were  $(31,937,000),  $(63,224,000)  and
$(47,000,000)  for  2001,  2000, and 1999, respectively.  Losses from continuing
operations  before the effects of income tax, minority interest and amortization
expense  were  $(20,188,000), $(18,387,000) and $(49,839,000) for 2001, 2000 and
1999,  respectively.  Losses  from  continuing  operations  decreased  from 2000
largely  due  to  lower  volume  and actions taken to reduce operating expenses.
Although  the  Company  has  taken  a  number  of  actions  to  address  factors
contributing  to  these  past  losses,  there can be no assurance that operating
losses  will  not  continue.

Recent and Further Regulatory Actions May Affect the Company's Future Operations

The  Company's  U.S.  insurance company subsidiaries, their business operations,
and  their  transactions  with affiliates, including the Company, are subject to
extensive  regulation  and  oversight  by  the  IDOI, the FDOI and the insurance
regulators  of  other  jurisdictions in which the insurance company subsidiaries
write  business.  Moreover,  the  U.S.  insurance  company subsidiaries' losses,
adverse trends and uncertainties discussed in this report have been and continue
to  be  matters  of concern to the domiciliary and other insurance regulators of
the  Company's U.S. insurance company subsidiaries and have resulted in enhanced
scrutiny  and  regulatory  action  by several regulators (see "Recent Regulatory
Developments"  and  "Risk-Based  Capital Requirements").  The primary purpose of
insurance  regulation  is  the  protection  of  policyholders  rather  than
shareholders.  Failure  to  resolve  issues with the IDOI and the FDOI, and with
other  regulators,  in  a  manner  satisfactory  to the Company could impair its
ability  to execute its business strategy or result in future regulatory actions
or  proceedings  that  could  otherwise  materially  and  adversely  affect  its
operations.

The  Company  is  Subject  to  a  Number  of  Pending  Legal  Proceedings

As  discussed  elsewhere  in  this  report,  the  Company  and  certain  of  its
subsidiaries  are involved in a number of pending legal proceedings  (see Part I
-  Item  3, "Legal Proceedings"). Although the Company believes that many of the
allegations of wrongdoing are without merit and intends to vigorously defend the
claims  brought against it, there can be no assurance that such proceedings will
not  have  a  material  adverse  effect  on  the Company's financial position or
results of operations.  Furthermore, the existence of these lawsuits diverts the
attention  of  management  and  they  are  costly  to  defend.

The  Terms  of the Trust Preferred Securities May Restrict The Company's Ability
to  Act

SIG  has  issued  through a wholly owned trust subsidiary $135 million aggregate
principal  amount  in  trust  originated  preferred  securities  ("Preferred
Securities").  The  Preferred  Securities  have  a  term of 30 years with annual
interest at 9.5% paid semi-annually. The obligations of the Preferred Securities
are  funded from SIG's nonstandard automobile insurance management company.  SIG
elected  to  defer  the semi-annual interest payments due in February and August
2000  and 2001 and may continue to defer such payments for up to an aggregate of
five  years  as permitted by the indenture for the Preferred Securities.  All of
the  deferred interest (if all payments due in 2002, 2003 and 2004 are deferred)
approximating  $84  million  will  become  due  and  payable  in  February 2005.
Although  there  is no present default under the indenture that would accelerate
the  payment  of  the  Preferred  Securities, the indenture contains a number of
covenants that may restrict SIG's ability to act in the future.  These covenants
include  restrictions  on SIG's ability to incur or guarantee debt, make payment
to  affiliates,  repurchase  its  common stock, pay dividends on common stock or
increase  its  level  of  certain  investments other than investment grade fixed
income  securities.  There  can  be  no  assurance  that  compliance  with these
restrictions  and other provisions of the indenture for the Preferred Securities
will  not  adversely  affect  the  cash  flow  of  SIG.

Uncertain  Pricing  and  Profitability

One of the distinguishing features of the property and casualty industry is that
its  products  are  priced before losses are reported and final costs are known.
Premium  rate  levels  are  related  in  part  to  the availability of insurance
coverage,  which  varies  according  to  the  level  of surplus in the industry.

Increases  in  surplus  have  generally  been  accompanied  by  increased  price
competition  among  property  and casualty insurers.  The nonstandard automobile
insurance  business,  in  recent years, has experienced very competitive pricing
conditions  and there can be no assurance as to the Company's ability to achieve
adequate  pricing.  Changes  in  case  law,  the  passage of new statutes or the
adoption  of  new  regulations  relating  to  the  interpretation  of  insurance
contracts  can  retroactively and dramatically affect the liabilities associated
with  known  risks  after  an insurance contract is in place.  New products also
present special issues in establishing appropriate premium levels in the absence
of  experience  with  such products' performance.  The level of claims cannot be
accurately determined for periods after the sale of policies, therefore reserves
are  estimated  and these estimates are used to set price. If they are low, then
resulting  rates  could  be  inadequate.

The  number  of  competitors  and the similarity of products offered, as well as
regulatory  constraints,  limit the ability of property and casualty insurers to
increase  prices  in  response  to  declines  in  profitability.  In states that
require  prior  approval  of  rates, it may be more difficult for SIG to achieve
premium  rates  that  are  commensurate  with  its  underwriting experience with
respect to risks located in those states. Accordingly, there can be no assurance
that  these  rates  will  be  sufficient  to  produce  an  underwriting  profit.

The reported profits and losses of a property and casualty insurance company are
also  determined, in part, by the establishment of, and adjustments to, reserves
reflecting  estimates  made  by  management  as to the amount of losses and loss
adjustment  expenses  ("LAE") that will ultimately be incurred in the settlement
of  claims.  The  ultimate  liability  of  the  insurer  for  all losses and LAE
reserved  at any given time will likely be greater or less than these estimates,
and  material differences in the estimates may have a material adverse effect on
the  insurer's  financial  position  or results of operations in future periods.

Uncertainty  Associated  with  Estimating  Reserves  for  Unpaid  losses and LAE

The  reserves  for unpaid losses and LAE established by the Company's applicable
subsidiaries  represent  estimates  of  amounts  needed  to  pay  reported  and
unreported  claims  and related LAE based on facts and circumstances then known.
These  reserves  are  based  on estimates of trends in claims severity, judicial
theories  of  liability  and  other  factors.

Although the nature of the Company's insurance business is primarily short-tail,
the  establishment  of adequate reserves is an inherently uncertain process that
provides  no  assurance  that  the ultimate liability will not materially exceed
reserves for losses and LAE and have a material adverse effect on the results of
operations  and  financial  condition.  Due  to  the  inherent  uncertainty  of
estimating  these  amounts, it has been necessary, and may over time continue to
be  necessary,  to  revise  estimates  of  the  reserves for losses and LAE. The
historical  development  of  reserves  for  losses  and  LAE may not necessarily
reflect  future  trends in the development of these amounts. Accordingly, it may
not  be  appropriate  to  extrapolate  redundancies  or  deficiencies  based  on
historical  information.

Nature  of  Nonstandard  Automobile  Insurance  Business

The  nonstandard  automobile insurance business is affected by many factors that
can  cause  fluctuation  in the results of operations of this business.  Many of
these factors are not subject to the control of the Company or its subsidiaries.

The size of the nonstandard market can be significantly affected by, among other
factors,  the  underwriting  capacity  and  underwriting  criteria  of  standard
automobile  insurance carriers.  In addition, an economic downturn in the states
in which SIG writes business could result in fewer new car sales and less demand
for  automobile  insurance. These factors, together with competitive pricing and
other  considerations,  could  result  in  fluctuations  in  SIG's  underwriting
results.

Highly  Competitive  Business

Nonstandard  automobile insurance is a highly competitive business.  Many of the
Company's  competitors  have  substantially greater financial resources than the
Company  and  there can be no assurance that the Company will be able to compete
effectively  against  such  competitors  in  the  future.

The  Company  competes  with  both  large  national writers and smaller regional
companies.  The  Company's  competitors  include  other companies that serve the
independent  agency market, as well as companies that sell insurance directly to
consumers.  Direct  writers  may have certain competitive advantages over agency
writers,  including  increased name recognition, loyalty of the customer base to
the  insurer,  and  potentially  reduced acquisition costs. In addition, certain
competitors have from time to time decreased their prices in an apparent attempt
to  gain market share.  Also, in certain states, assigned risk plans may provide
nonstandard  automobile  insurance  products  at  a  lower  price  than  private
insurers.  In  addition,  because  the  Company's  nonstandard  auto  insurance
products  are  marketed  through independent insurance agencies, which represent
more  than  one  insurance  company,  the  Company faces competition within each
agency.

Reliance  Upon  Reinsurance

In  order  to reduce risk and to increase its underwriting capacity, the Company
purchases reinsurance.  Reinsurance does not relieve the Company of liability to
its  insureds  for  the risks ceded to reinsurers.  Consequently, the Company is
subject  to credit risk with respect to the risks ceded to reinsurers.  Although
the Company places its reinsurance with reinsurers that it generally believes to
be financially stable, a significant reinsurer's insolvency or inability to make
payments  under  the terms of a reinsurance treaty could have a material adverse
effect  on  the  Company's  financial  condition  or  results  of  operations.

The  amount  and  cost  of  reinsurance  available  to companies specializing in
property  and casualty insurance is subject, in large part, to prevailing market
conditions  beyond  the  control  of  such  companies.  SIG's ability to provide
insurance at competitive premium rates and coverage limits on a continuing basis
depends  upon its ability to obtain adequate reinsurance in amounts and at rates
that  will  not  adversely  affect  its  competitive  position.

Due  to  continuing  market  uncertainties  regarding  reinsurance  capacity, no
assurances  can be given as to SIG's ability to maintain its current reinsurance
facilities,  which  generally are subject to annual renewal. If SIG is unable to
renew  such  facilities  upon  their  expiration  and  is  unwilling to bear the
associated  increase  in  net  exposures, it may need to reduce the level of its
underwriting  commitments.

ITEM  2  -  PROPERTIES

The headquarters for the Company is located at 2 Eva Road, Suite 200, Etobicoke,
Ontario,  Canada  in  leased  space.

The  Company's  U.S.  offices,  SIG's headquarters and Pafco are located at 4720
Kingsway  Drive, Indianapolis, Indiana in a building that is owned 100% by Pafco
with  no  encumbrances.  The  building  is  an  80,000  square  foot  multilevel
structure, approximately 50% of which is utilized by the Company, SIG and Pafco.
The  remaining  space is leased to third parties at a price of approximately $10
per  square  foot.  All  corporate  administration,  accounting  and  management
functions  are  located  at  this  property.

Superior's  operations  are  conducted at leased facilities in Atlanta, Georgia;
Orange,  California;  Glendale,  California;  Alexandria, Virginia; Bala Cynwyd,
Pennsylvania; Tampa, Jacksonville and Palm Beach Gardens, Florida; and Lakewood,
Colorado. Under a lease term that extends through February 2003, Superior leases
an  office  at  280  Interstate North Circle, N.W., Suite 500, Atlanta, Georgia.
Under  a lease term that extends through August 2003, Superior occupies a leased
office  located  at  1400  South Marietta Parkway; Suite 105, Marietta, Georgia.
Under a lease term that extends through December 2007, Superior leases an office
located  at  5483  West Waters Avenue, Suite 1200, Tampa, Florida. Under a lease
term  that  extends through June 2002, Superior occupies a leased office located
at  1745  West  Orangewood, Orange, California.  Under a lease term that extends
through  November  2005,  Superior leases an office located at 700 North Central
Avenue,  Glendale,  California.  Under a lease term that extends through October
2003,  Superior  occupies a leased office located at 6303 Little River Turnpike,
Suite  220, Alexandria, Virginia.  Under a lease term that extends through April
2003,  Superior  leases  an  office  located  at 150 Monument Road, Bala Cynwyd,
Pennsylvania.  Under  a lease term that extends through September 2002, Superior
occupies  a  leased  office  at  4500 PGA Blvd., Suite 304A, Palm Beach Gardens,
Florida.  Under a lease term that extends through March 2005, Superior leases an
office  located  at  141  Union  Blvd.,  Suite  130,  Lakewood,  Colorado.

Underwriting, customer service, and administration activities are located at the
Atlanta  property.  Claims activities are located in the Atlanta, Tampa, Orange,
Glendale  and  Alexandria  properties.  Claims  property  damage  training  is
performed  at  the  Marietta  property.

SIGF  is  located at 2300 Glades Road, Suite 135E, Boca Raton, Florida in leased
space.

The  Company  considers  all  of  its  properties  suitable and adequate for its
current  operations.

ITEM  3  -  LEGAL  PROCEEDINGS

As  previously  reported,  IGF  had  been  a  party to a number of pending legal
proceedings  and  claims  relating  to  agricultural  production  interruption
insurance  policies (the "AgPI Program") which were sold during 1998. All of the
policies of insurance, which were issued in the AgPI Program, were issued by and
under the name of Mutual Service Casualty Insurance Company ("MSI"), a Minnesota
corporation  with  its  principal  place  of  business  located  in Arden Hills,
Minnesota.  Sales  of this product resulted in large underwriting losses by IGF.

Approximately  $29,147,278  was  paid through December 31, 2001 in settlement of
legal proceedings and claims related to the AgPI Program, with payments totaling
approximately  $359,000  during  2001.  SIG  reduced reserves related to AgPI by
approximately  $7  million  during  2001.  SIG  has  retained  a  reserve  of
approximately  $3  million as a provision for expenses and settlement of ongoing
litigation.

All policyholder claims had been settled during 2000. On January 12, 2001 a case
was  filed  in  the Superior Court of California, County of Fresno, entitled S&W
Seed  Company,  Dudley  Silveira,  Ric  Blanchard and Darrell Silveira v. Mutual
Service  Casualty  Insurance  Company,  IGF  Insurance  Company,  and  Dibuduo &
Defendis  Insurance  Agency, Inc.; Case No. OICE CG 00137.  The case was brought
by four AgPI policyholders who had previously settled their AgPI claims pursuant
to  binding  settlement  agreements  who  now  seek  additional  compensation by
asserting through litigation that IGF and the third party carrier paid less than
the  policy  limits  they  were promised when they purchased the policy and that
each  settling  policyholder  was  forced  to accept the lesser amount due their
economic duress - a legal theory recognized in California if certain elements of
economic  duress  can  be established.  Discovery is proceeding.  On January 16,
2002,  the  court  entered  an  order  granting IGF's motion for judgment on the
pleadings  and  required  plaintiffs  to show an insurable interest.  Plaintiffs
amended  their complaint attempting to allege an insurable interest and on March
19,  2002,  the  court  granted  IGF's  demurrer  to  the amended complaint.  In
granting  the  demurrer  the  court held that any recovery payable to plaintiffs
would  be  limited  to  their  actual  economic  losses  regardless  of how much
plaintiffs thought they had been promised (i.e. plaintiffs cannot be paid policy
limits  without regard to actual losses incurred).  The plaintiffs have ten (10)
days  in  which  to  again  amend  their  complaint.

IGF  remains  a  defendant/cross-complainant in eight lawsuits pending in Fresno
County, California which relate to the cross-claims between the selling brokers,
MSI  and  IGF.  These  lawsuits  have  been  consolidated  for  all purposes and
discovery  is  proceeding.

IGF  and  MSI  are engaged in arbitration with respect to responsibility for the
AgPI  program  settlements.  The  arbitration commenced in December 2000 and the
parties had their first meeting with the panel on May 22, 2001. At that meeting,
MSI  moved  for  an order requiring IGF to post pre-hearing security through the
issuance  of  a  letter  of  credit  in  the  amount of $39 million.  Over IGF's
objection,  in  a two to one vote, the panel ordered IGF to post the $39 million
security  by  June  19,  2001.  IGF  sought  relief from the order in the United
States  District  Court  for  the  District of New Jersey, but was unsuccessful.

On  November  7,  2001,  the arbitration panel considered a petition for default
judgment  against  IGF  based on IGF's failure to post the pre-hearing security.
On November 23, 2001, the arbitration panel issued an order denying MSI's motion
for default judgment and requiring IGF to place $600,000 in an escrow account to
cover  MSI's  prospective legal expenses.  The panel also continued its original
order  that  required  IGF  to post the $39 million security.  IGF has deposited
$600,000 into an escrow account as required by the arbitration panel but has not
posted  the  $39  million  letter  of credit and is financially unable to do so.

On June 25, 2001, MSI filed a complaint for preliminary and permanent injunctive
relief and damages (the "MSI Complaint") against the Company, SIG, IGFH, Granite
Re, and certain affiliates of those companies, as well as certain members of the
Symons  family,  and  Acceptance  Insurance Companies Inc. ("Acceptance") in the
United  States District Court for the Southern District of Indiana, Indianapolis
Division.   The  MSI  Complaint  alleges that the June 6, 2001 transfer of IGF's
assets  to  Acceptance  and  the  payments by Acceptance to the Company, SIG and
Granite  Re  violated  Indiana  law  and  are  voidable.  In  addition,  the MSI
Complaint  alleges that Acceptance, the Company, SIG, IGFH and the Symons Family
are  liable  to  MSI  for  the  entire  $39 million claim which MSI is asserting
against IGF in the arbitration proceeding on theories of successor liability and
"piercing  the  corporate  veil."  The  MSI  Complaint  seeks  preliminary  and
permanent injunctive relief against the defendants, an order voiding the various
transactions  between and among the defendants and an order determining that the
defendants  are  directly responsible to MSI for MSI's $39 million claim against
IGF.

The  defendants  filed  answers  to  the  MSI  Complaint  denying  the  material
allegations  and asserting affirmative defenses to the MSI Complaint.  A hearing
on  MSI's  Motion for Preliminary Injunctive Relief was held Thursday, August 2,
2001.  On August 3, 2001, the court denied MSI preliminary injunctive relief. On
January  7,  2002,  MSI  filed  an  amended complaint which added Superior Group
Management,  Superior  Group, Superior and Pafco as defendants (the "MSI Amended
Complaint").  The  MSI  Amended Complaint asserts claims substantively identical
to  the claims in the MSI Complaint.  On February 21, 2002, the defendants filed
answers  to  the  MSI  Amended  Complaint  and  denied  the material allegations
contained  in  the  MSI  Amended  Complaint  and  asserted affirmative defenses.

Should  MSI  be  successful in obtaining permanent injunctive relief against the
Company  and  its  affiliates, any such relief would have an adverse impact upon
the  Company  and  its  affiliates  and  their respective assets and operations.
Further,  in  the  event  MSI  is successful in voiding the various transactions
between the defendants or the defendants are determined to be responsible to MSI
for  MSI's  $39 million claim against IGF, those orders and determinations could
have  an adverse effect upon the Company and its affiliates and their respective
assets  and  operations.

SIG, IGFH and IGF are parties to a "Strategic Alliance Agreement" dated February
28,  1998  (the  "SAA")  with  Continental Casualty Company ("CNA"), pursuant to
which  IGF  acquired  certain  crop  insurance  operations  of  CNA.  Through
reinsurance  agreements,  CNA  was  to share in IGF's profits or losses on IGF's
total crop insurance business.  By letter dated January 3, 2001, CNA gave notice
pursuant  to  the  SAA  of  its  exercise  of  the "Put Mechanism" under the SAA
effective  February  19,  2001.  According  to the SAA, upon exercise of the Put
Mechanism,  IGFH  is obligated to pay CNA an amount equal to 5.85 times "Average
Pre-Tax  Income",  an  amount  based in part upon payments made to CNA under the
SAA.  The  SAA further provided that 30 days after exercise of the Put, IGF will
execute  a  promissory  note payable six months after the exercise of the Put in
the  principal  amount  equal to the amount owed, as specified by the SAA.  In a
letter dated March 20, 2001, CNA also asserted a claim for amounts allegedly due
under  reinsurance  agreements  for  the  2000  crop  year.

SIG  believes  it  has  claims  against CNA and defenses to CNA's claim that may
ultimately  offset  or  reduce  amounts  owed  to  CNA.  SIG  and CNA engaged in
discussions  regarding  possible  alternatives  for  the  resolution  of  their
respective claims against each other.  Those discussions ultimately proved to be
unsuccessful.

Following  the failure of settlement discussions, on June 4, 2001, IGF, IGFH and
SIG  filed  a  complaint  against CNA (the "IGF Complaint") in the United States
District  Court for the Southern District of Indiana, Indianapolis Division. The
IGF  Complaint  asserts  claims  against CNA for fraud and constructive fraud in
connection  with the SAA and breach of contract and seeks relief against CNA for
compensatory  and  punitive  damages.  On  June 27, 2001, CNA filed its "Answer,
Separate  Defenses and Counterclaim", in which CNA generally denied the material
allegations  of the IGF Complaint and asserted various defenses to those claims.

On  June  6, 2001, CNA filed a complaint against IGF, IGFH and SIG in the United
States  District  Court  for  the  Southern  District  of  Indiana, Indianapolis
Division  (the  "CNA  Complaint"), asserting claims based on the SAA and related
agreements  for  approximately  $25  million allegedly owed CNA by virtue of its
exercise  of  the  Put  Mechanism,  $3  million  for amounts allegedly due under
reinsurance  agreements for the 2000 crop year, $1 million for certain "fronting
costs," and $1 million pursuant to a note executed by IGFH to CNA's affiliate in
connection  with  the  acquisition  by IGFH of North American Crop Underwriters,
Inc. in 1998.  CNA also asserted claims to the effect that the June 6, 2001 sale
of  IGF  assets  to  Acceptance  resulted in payments of funds to Goran, SIG and
Granite Re, which funds allegedly should have been paid to IGF instead.  On June
6,  2001,  CNA  asked  the district court to enter a temporary restraining order
preventing  IGF, IGFH and SIG from disposing of the proceeds received by them in
connection  with the sale of IGF assets to Acceptance.  In an emergency hearing,
the  court  denied  CNA  the  relief  it  requested,  without  prejudice  to
reconsideration of those issues at a future time.  CNA has since amended the CNA
Complaint  to  add  Goran  and  Granite Re as defendants.  CNA's counterclaim in
response  to  the  IGF Complaint asserts essentially the same claims against the
same  parties  as  the  amended  CNA  Complaint.

On  September  20,  2001  the court ordered a consolidation of the two cases. On
December  4,  2001,  CNA  filed  an  Amended Answer and Counterclaim which added
Pafco,  Superior  and certain members of the Symons family as counterdefendants.
CNA's  Amended Answer and Counterclaim also alleges that IGF, IGFH, SIG, and the
other  counterdefendants are alter egos of each other and are directly liable to
CNA  for its claims.  Discovery in the case is proceeding.  Although the Company
and  its  affiliates  continue  to believe that they have claims against CNA and
defenses to CNA's claims which may offset or reduce amounts owing by the Company
or its affiliates to CNA, there can be no assurance that the ultimate resolution
of  the  claims  asserted by CNA against the Company and its affiliates will not
have  a material adverse effect upon the Company's and its affiliates' financial
condition  or  results  of  operations.

The  California Department of Insurance ("CDOI") filed a Notice of Noncompliance
against  Superior  on June 29, 2001, which alleged that broker fees were charged
by  independent brokers in violation of California law.  SIG and the CDOI agreed
to  a  resolution  of  the  matters  raised  in the Notice of Noncompliance by a
Stipulation  and  Consent  Order  entered  on December 26, 2001 wherein Superior
agreed  to pay the CDOI a penalty in the amount of $200,000 in settlement of the
action.

The  Company  is a defendant in a case filed on February 23, 2000, in the United
States District Court for the Southern District of Indiana entitled Robert Winn,
et  al. v. Symons International Group, Inc., et al., Cause No. IP 00-0310-C-B/S.
Other  parties  named  as  defendants are SIG, three individuals who were or are
officers  or  directors  of  SIG  or  of  Goran,  PricewaterhouseCoopers LLP and
Schwartz  Levitsky Feldman, LLP.  The case purports to be brought on behalf of a
class consisting of purchasers of SIG's stock or Goran's stock during the period
February  27, 1998, through and including November 18, 1999.  Plaintiffs allege,
among  other things, that defendants misrepresented the reliability of SIG's and
Goran's  reported  financial statements, data processing and financial reporting
systems,  internal  controls  and loss reserves in violation of Section 10(b) of
the  Securities Exchange Act of 1934 ("1934 Act") and SEC Rule 10b-5 promulgated
thereunder.  The  individual  defendants  are  also  alleged  to  be  liable  as
"controlling persons" under Sec.20(a) of the 1934 Act.  The Company, SIG and the
individual  defendants  filed  a  motion  to  dismiss  the  amended consolidated
complaint  for  failure  to  state  a  claim  and  for  failure  to  plead  with
particularity  as  required  by  Fed. R. Civ. P.9 (b) and the Private Securities
Litigation  Reform  Act  of  1995.  The  accounting  firms also filed motions to
dismiss.  On  February  19,  2002  the  court granted in part and denied in part
defendants'  motion  to  dismiss.   On  March  15, 2002 the Company, SIG and the
individual  defendants  filed a motion for reconsideration of the court's ruling
on  the  motion  to  dismiss,  or  alternatively to certify an order for appeal.

Superior  is  a  defendant  in  a case filed on May 8, 2001 in the United States
District  Court  for  the Southern District of Florida entitled The Chiropractic
Centre,  Inc.  v.  Superior  Insurance  Company  which purports to be brought on
behalf  of a class consisting of healthcare providers improperly paid discounted
rates  on  services  to patients based upon a preferred provider contract with a
third  party.  The  plaintiff  alleges  that  Superior  breached  a  third party
beneficiary  contract,  committed  fraud and engaged in racketeering activity in
violation  of federal and Florida law by obtaining discounted rates offered by a
third  party  with whom the plaintiff contracted directly. On September 28, 2001
the case was consolidated with fifteen or more similar actions.   On October 29,
2001  Superior  filed  a  motion to dismiss the action for lack of jurisdiction,
which  is  pending.  Superior  intends  to  vigorously defend the claims brought
against  it.

IGF  is  a  defendant in a declaratory action entitled Kevin L. Stevens, Bank of
America,  Conservator  of the Estate of Samuel Jay Ramsey and Gael Ramsey v. IGF
Insurance  Company originally filed on February 21, 2001 in the Circuit Court of
Green  County,  Missouri.  The  action  was  subsequently removed to the Federal
District  Court  for the Western District of Missouri.  On October 11, 2001, the
Federal  District  Court granted declaratory judgment in favor of IGF's insured,
Stevens,  and  held  that  IGF  was  responsible  for  payment  of  the  premium
attributable  to  a  $15 million appeal bond for Steven's appeal from a judgment
against him in a related personal injury action.  IGF believes that the District
Court  erred  in  granting declaratory judgement for Stevens and in holding that
IGF  is responsible for payment of the premium on the bond.  IGF has appealed to
the  United  States  Court of Appeals for the Eighth Circuit for relief from the
declaratory  judgment.  In  the  event  IGF  is  ultimately  required to pay the
premium  on  the  appeal  bond, it would have a material adverse impact on IGF's
financial  position.

Superior  is a defendant in a case filed September 15, 2000 in the Circuit Court
for  Lee County, Florida entitled Charles L. Fulton, D.C. v.  Superior Insurance
Company.  The case is purported to be brought on behalf of a class consisting of
healthcare  providers that rendered treatment to and obtained a valid assignment
of  benefits  from  persons  insured  by Superior.  The court granted Superior's
motions  to  dismiss  the  original and amended complaints but denied Superior's
motion  to  dismiss  the  second  amended  complaint.  The  court  is permitting
plaintiff  to  go  forward  with  class  discovery.  The  plaintiff alleges that
Superior  reduced or denied claims for medical expenses payable to the plaintiff
without  first  obtaining  a  written  report  in violation of Florida law.  The
plaintiff  also  alleges  that  Superior  inappropriately  reduced the amount of
benefits  payable  to  the  plaintiff  in  breach  of  Superior's  contractual
obligations  to  the plaintiff.  Superior believes the allegations of wrongdoing
in  violation  of  law  are  without  merit and intends to vigorously defend the
claims  brought  against  it.

Superior  is  a  defendant  in  a  case  now entitled Oviedo Family Chiropractic
Center,  P.A. v. Superior Insurance Company originally filed February 4, 2000 in
the Circuit Court for Dade County, Florida and entitled Medical Re-Hab Center v.
Superior Insurance Company.  The court granted Superior's motions to dismiss the
original  and  first  amended  complaints.  The plaintiff has filed a motion for
leave to file a second amended complaint which is pending.  The case purports to
be  brought  on  behalf  of  a class consisting of (i) healthcare providers that
rendered  treatment  to Superior insureds and claimants of Superior insureds and
(ii)  such  insureds and claimants.  The plaintiff alleges that Superior reduced
medical  benefits  payable  and  improperly  calculated interest in violation of
Florida  law.  Superior  believes  the  claim  is  without  merit and intends to
vigorously  defend  the  charges  brought  against  it.

Superior  Guaranty  is  a  defendant  in a case filed on October 8, 1999, in the
Circuit  Court for Manatee County, Florida entitled Patricia Simmons v. Superior
Guaranty  Insurance  Company.  The  case  purports  to be brought on behalf of a
class  consisting  of  purchasers  of  insurance  from  Superior  Guaranty.  The
plaintiff  alleges  that  the defendant charged interest in violation of Florida
law.  Superior  Guaranty  believes that the allegations of wrongdoing as alleged
in  the  complaint are without merit and intends to vigorously defend the claims
brought  against  it.

Superior  Guaranty  is  a defendant in a case filed on November 26, 1996, in the
Circuit  Court  for  Lee County, Florida entitled Raed Awad v. Superior Guaranty
Insurance  Company, et al.  The case purports to be brought on behalf of a class
consisting  of  purchasers of insurance from Superior Guaranty.   The plaintiffs
allege  that  the defendant charged premium finance service charges in violation
of  Florida  law.  Superior Guaranty believes that the allegations of wrongdoing
as  alleged  in the complaint are without merit and intends to vigorously defend
the  claims  brought  against  it.

On  July  7,  2000 the FDOI issued a notice of its intent to issue an order (the
"Notice") which principally addressed certain policy and finance fee payments by
Superior  to  Superior  Group.  A  formal  administrative  hearing to review the
Notice  and  a  determination  that  the order contemplated by the Notice not be
issued  was  held  in  February  2001.  The  administrative  law judge entered a
recommended  order  on  June  1, 2001 that was acceptable to SIG.  On August 30,
2001  the  FDOI  rejected the recommended order and issued its final order which
SIG  believes  improperly characterizes billing and policy fees paid by Superior
to  Superior  Group.  Superior  filed  an  appeal  of the final order to Florida
District Court. On March 4, 2002, the FDOI filed a petition in the Circuit Court
of  the Second Judicial Circuit in and for Leon County, Florida that seeks court
enforcement  of  the  FDOI's final order.  Superior filed a motion with the FDOI
for  stay  of  the  FDOI's  final  order.  Superior also filed a motion with the
District  Court  of  Appeal,  which was denied pending a ruling from the FDOI on
Superior's  motion  for  stay.

See  "BUSINESS-REGULATION-Recent  Regulatory  Developments",  in  Part I of this
report,  for  additional  legal  matters involving insurance regulatory matters.

The  Company's insurance subsidiaries are parties to other litigation arising in
the  ordinary  course  of  business.  The  Company  believes  that  the ultimate
resolution  of  these  lawsuits  will  not have a material adverse effect on its
financial  condition  or results of operations.  The Company, through its claims
reserves,  reserves  for  both  the  amount of estimated damages attributable to
these  lawsuits  and  the  estimate  costs  of  litigation.


ITEM  4  -  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS


     None.
                                     PART II

ITEM  5  -  MARKET  FOR  THE  REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS


Information  regarding  the  trading  market for the Company's common stock, the
range of selling prices for each quarterly period since January 1, 2000, and the
approximate  number of holders of common stock as of December 31, 2001 and other
matters  is included under the caption "Market and Dividend Information" on page
47  of  the  2001  Annual Report, included as Exhibit 13, which information is
incorporated  herein  by  reference.


ITEM  6  -  SELECTED  FINANCIAL  DATA

The data included on page 5 of the 2001 Annual Report, included as Exhibit 13,
under  "Selected  Financial  Data"  is  incorporated  herein  by  reference.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

The  discussion  entitled  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations" included in the 2001 Annual Report on pages
6  through  16  included  as  Exhibit  13 is incorporated herein by reference.

ITEM  7A  -  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

The  discussion  entitled "Quantitative and Qualitative Disclosures About Market
Risk"  included  in  the  2001  Annual Report on pages 14 through 15 included as
Exhibit  13  is  incorporated  herein  by  reference.

ITEM  8  -  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

The  consolidated  financial  statements  in  the 2001 Annual Report included as
Exhibit  13,  and listed in Item 14 of this Report, are incorporated herein by
reference.

ITEM  9-  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE.

None.


<PAGE>
                                    PART III

ITEM  10  -  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

The  information  required  by  this  Item regarding Directors of the Company is
incorporated herein by reference to the Company's definitive proxy statement for
its  2001  annual meeting of common shareholders to be filed with the Commission
pursuant  to  Regulation  14A  (the  "Proxy  Statement").

EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

Presented  below  is  certain information regarding the executive officer of the
Company  who is not also a director.  His age and positions with the Company are
as  follows:

NAME                    AGE          POSITION

John  G.  Pendl          40          Vice President, Chief Financial Officer and
Treasurer

Mr.  Pendl  has  served as Vice President, Chief Financial Officer and Treasurer
since  October  2001.  From  1998  to  September  2001,  Mr. Pendl served as M&A
Analyst  and  Divisional  Controller  for  Collision  Team  of  America, Inc., a
subsidiary  of  Ford  Motor  Company.  Mr.  Pendl  also  held  various corporate
financial  positions  between  1991  and 1998, primarily with The Corange Group.
Finally,  Mr. Pendl served as a tax consultant with the firm of Price Waterhouse
from  1984  through 1990.  Mr. Pendl holds an MBA degree from Indiana University
and  is  a  Certified  Public  Accountant  in  the  State  of  Indiana.

ITEM  11  -  EXECUTIVE  COMPENSATION

The information required by this Item is incorporated herein by reference to the
Proxy  Statement.

ITEM  12  -  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT

The information required by this Item is incorporated herein by reference to the
Proxy  Statement.

ITEM  13  -  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

The information required by this Item is incorporated herein by reference to the
Proxy  Statement.


<PAGE>
                                     PART IV

ITEM  14  -  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND REPORTS ON FORM 8-K

The  documents  listed  below  are  filed  as  a  part of this Report, except as
otherwise  indicated:

1. Financial Statements. The following consolidated financial statements found
on the pages of the 2001 Annual Report are incorporated into Item 8 of this
Report by reference:

Description  of  Financial  Statement  Item     Location  in  2001 Annual Report
-------------------------------------------     --------------------------------

Reports  of  Independent  Accountants                               Page  46

Consolidated  Balance  Sheets,  December  31,
2001  and  2000                                                     Page  17

Consolidated  Statements  of  Operations,  Years
Ended  December  31,  2001,  2000  and  1999                        Page  18

Consolidated  Statements  of  Changes  In
Stockholders'  Equity  (Deficit),  Years  Ended
December  31,  2001,  2000  and  1999                               Page  19

Consolidated  Statements  of  Cash  Flows,
Years  Ended  December  31,  2001,  2000  and  1999                 Page  20

Notes  to  Consolidated  Financial  Statements,
Years  Ended  December  31,  2001,2000  and  1999      Pages  21  through 44

2. Financial Statement Schedules. The following financial statement schedules
are included beginning on page 27:


Reports  of  Independent  Accountants

Schedule  II  -  Condensed  Financial  Information  of  Registrant

Schedule  IV  -  Reinsurance

Schedule  V  -  Valuation  and  Qualifying  Accounts

Schedule  VI - Supplemental Information Concerning Property - Casualty Insurance
Operations

3. Exhibits. The Exhibits set forth on the Index to Exhibits are incorporated
herein by reference.


4. Reports on Form 8-K: No reports on Form 8-K were filed during the fourth
quarter of 2001.



<PAGE>
Board  of  Directors  and  Stockholders  of
Goran  Capital  Inc.  and  Subsidiaries

The  audit  referred  to  in  our  report  dated March 29, 2002, relating to the
consolidated financial statements of Goran Capital, Inc. and subsidiaries, which
is incorporated in Item 8 of this Form 10-K by reference to the annual report to
shareholders  for  the  year  ended  December 31, 2001 included the audit of the
financial statement schedules listed in the accompanying index.  These financial
statement  schedules  are  the  responsibility of the Company's management.  Our
responsibility  is  to express an opinion on these financial statement schedules
based  upon  our  audits.

In  our  opinion,  such  financial  statement  schedules  present fairly, in all
material  respects,  the  information  set  forth  therein.

/s/  BDO  SEIDMAN,  LLP

BDO  SEIDMAN,  LLP
Grand  Rapids,  Michigan
March  29,  2002
<PAGE>

GORAN  CAPITAL  INC.-  CONSOLIDATED
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES.

The  information  required  by  this  schedule is included in note 3 of Notes to
Consolidated  Financial  Statement.

<TABLE>
<CAPTION>

GORAN  CAPITAL  INC.
SCHEDULE  II  -  CONDENSED  FINANCIAL  INFORMATION  OF  REGISTRANT
As  Of  December  31,  2001  and  2000
(In  thousands,  except  share  data)

                                                    2001       2000
                                                  ---------  ---------
<S>                                                  <C>        <C>
Assets:
Cash and Short-term Investments. . . . . . . . .  $  2,618   $    197
Loans to Related Parties . . . . . . . . . . . .       219      3,698
Capital and Other Assets . . . . . . . . . . . .       531         68
Investment in Subsidiaries, at Cost. . . . . . .    10,639     10,738
                                                  ---------  ---------
Total Assets . . . . . . . . . . . . . . . . . .    14,007   $ 14,701
                                                  =========  =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Loans from Related Parties and Other Liabilities  $ 10,800   $  5,705
                                                  ---------  ---------
Total Liabilities. . . . . . . . . . . . . . . .    10,800      5,705
                                                  ---------  ---------

Stockholders' Equity:
Common Shares. . . . . . . . . . . . . . . . . .    18,502     18,165
Cumulative Translation Adjustment. . . . . . . .       570      1,509
Deficit. . . . . . . . . . . . . . . . . . . . .   (15,865)   (10,678)
                                                  ---------  ---------
Total Stockholders' Equity . . . . . . . . . . .     3,207      8,996
                                                  ---------  ---------
Total Liabilities and Stockholders' Equity . . .  $ 14,007   $ 14,701
                                                  =========  =========
</TABLE>


<TABLE>
<CAPTION>

GORAN  CAPITAL  INC.
SCHEDULE  II  -  CONDENSED  FINANCIAL  INFORMATION
OF  REGISTRANT
STATEMENT  OF  EARNINGS  (LOSS)  AND  ACCUMULATED  DEFICIT
For  The  Years  Ended  December  31,  2001,  2000  and  1999
(In  thousands)


                                                           2001       2000       1999
                                                         ---------  ---------  --------
<S>                                                         <C>        <C>        <C>
Revenues
Management Fees . . . . . . . . . . . . . . . . . . . .  $     --   $     --   $    75
Net Investment Income . . . . . . . . . . . . . . . . .       173          5        46
Non-Compete Fee Income. . . . . . . . . . . . . . . . .       875         --        --
                                                         ---------  ---------  --------
Total Revenues. . . . . . . . . . . . . . . . . . . . .     1,048          5       121
                                                         ---------  ---------  --------
Expenses:
General, Administrative, Acquisition Expenses and Taxes     6,235      1,257     1,233
                                                         ---------  ---------  --------
Total Expenses. . . . . . . . . . . . . . . . . . . . .     6,235      1,257     1,233
                                                         ---------  ---------  --------
Net Loss. . . . . . . . . . . . . . . . . . . . . . . .    (5,187)    (1,252)   (1,112)
Deficit, Beginning of Year. . . . . . . . . . . . . . .   (10,678)    (9,426)   (8,314)
                                                         ---------  ---------  --------
Deficit End of Year . . . . . . . . . . . . . . . . . .  $(15,865)  $(10,678)  $(9,426)
                                                         =========  =========  ========
</TABLE>


<TABLE>
<CAPTION>

GORAN  CAPITAL  INC.
SCHEDULE  II  -  CONDENSED  FINANCIAL  INFORMATION  OF  REGISTRANT
For  The  Years  Ended  December  31,  2001,  2000  and  1999
(In  thousands)


                                              2001      2000      1999
                                            --------  --------  --------
<S>                                            <C>       <C>       <C>
Cash Flows from Operations
Net Loss . . . . . . . . . . . . . . . . .  $(5,187)  $(1,252)  $(1,112)
Adjustments:
Foreign Exchange Losses. . . . . . . . . .     (165)       --        --
Non-Compete Agreement Receipts . . . . . .    4,622        --        --
Items Not Involving Cash:
Decrease (Increase) in Accounts Receivable    3,987      (975)   (2,118)
      Decrease (Increase) in Other Assets.     (449)     (485)     (166)
Increase (Decrease) in Accounts Payable. .    1,165     2,970     2,735
Translation Adjustment . . . . . . . . . .     (503)      (89)     (436)
                                            --------  --------  --------
Net Cash Provided (Used) by Operations . .    3,470       169    (1,097)
                                            --------  --------  --------
Cash Flows From Financing Activities:
Purchase of Common Shares. . . . . . . . .     (218)     (185)       --
Purchase of Investments. . . . . . . . . .     (831)       --        --
                                                      --------  --------
      Issue of Common. . . . . . . . . . .       --        --     1,077
                                            --------  --------  --------
Net Cash Provided by Financing Activities.   (1,049)     (185)    1,077
                                            --------  --------  --------
Net Increase (Decrease) in Cash. . . . . .    2,421       (16)      (20)
Cash at Beginning of Year. . . . . . . . .      197       213       233
                                            --------  --------  --------
Cash at End of Year. . . . . . . . . . . .    2,618   $   197   $   213
                                            ========  ========  ========
Cash Resources are Comprised of:
Cash . . . . . . . . . . . . . . . . . . .  $    34   $    56   $    73
Short-Term Investments . . . . . . . . . .    2,584       141       140
                                            --------  --------  --------
                                            $ 2,618   $   197   $   213
                                            ========  ========  ========
</TABLE>

GORAN  CAPITAL  INC.
SCHEDULE  II  -  CONDENSED  FINANCIAL  INFORMATION  OF  REGISTRANT
For  The  Years  Ended  December  31,  1999,  2000  and  2001

Basis  of  Presentation
The  condensed  financial  information  should  be  read in conjunction with the
consolidated financial statements of Goran Capital Inc.  The condensed financial
information  includes  the  accounts  and activities of the parent company which
acts  as  the  holding  company  for  the  insurance  subsidiaries.

<TABLE>
<CAPTION>

GORAN  CAPITAL  INC.-  CONSOLIDATED
SCHEDULE  IV  -  REINSURANCE
For  The  Years  Ended  December  31,  2001,  2000  and  1999
(In  Thousands)


Property and Liability Insurance        2001       2000       1999
                                     ----------  ---------  ---------
<S>                                     <C>         <C>        <C>

Direct Amount . . . . . . . . . . .  $ 161,092   $168,626   $227,774
                                     ----------  ---------  ---------
Assumed From Other Companies. . . .     32,094     13,473      8,627
                                     ----------  ---------  ---------
Ceded to Other Companies. . . . . .   (106,324)   (78,637)     7,361
                                     ----------  ---------  ---------
Net Amounts . . . . . . . . . . . .     86,862   $103,462   $243,762
                                     ==========  =========  =========
Percentage of Amount Assumed to Net       36.9%      13.0%       3.5%
                                     ----------  ---------  ---------
</TABLE>

<TABLE>
<CAPTION>

GORAN  CAPITAL  INC.-  CONSOLIDATED
SCHEDULE  V  -  VALUATION  AND  QUALIFYING  ACCOUNTS
For  The  Years  Ended  December  31,  1999,  2000  and  2001
(In  Thousands)

                                      2001              2000                 1999
                                  Allowance for      Allowance for       Allowance for
                                Doubtful Accounts   Doubtful Accounts   Doubtful Accounts
                                  ------------------  ------------------  ------------------
<S>                                    <C>                 <C>                 <C>

Additions:

Balance at Beginning of Period .  $     1,940        $      1,479         $    4,953

Charged to Costs and Expenses(1)        6,122               9,623               6,134

Charged to Other Accounts. . . .           -                   -                   -

Deductions from Reserves . . . .        6,536               9,162               9,608
                                  ------------------  ------------------  ------------------

Balance at End of Period . . . .  $     1,526         $     1,940          $    1,479
                                  =============      ===============       ==============
<FN>

(1) The Company continually monitors the adequacy of its allowance for doubtful
accounts and believes the balance of such allowance at December 31, 2001, 2000
and 1999 was adequate.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

GORAN  CAPITAL  INC.-  CONSOLIDATED
SCHEDULE  VI  -  SUPPLEMENTAL  INFORMATION  CONCERNING
PROPERTY  -  CASUALTY  INSURANCE  OPERATIONS
For  The  Years  Ended  December  31,  2001,  2000  and  1999
(In  Thousands)


<S>   <C>            <C>        <C>       <C>                  <C>     <C>          <C>       <C>      <C>      <C>

      Reserves
      for
      Unpaid         Amorti-    Paid
      Claims         zation of  Claims
      Deferred       and        Deferred  and
      Policy         Claim      Net       Claims and           Policy  Claim
      Acquisi-       Adjust-    Invest-   Adjustment Expenses  Acqui-  Adjust-
      tion           ment       Unearned  Earned               ment    Incurred     sition    ment     Premium
Year  Costs          Expense    Premiums  Premiums             Income  Related to:  Costs     Expense  Written
----  -------------  ---------  --------  -------------------  ------  -----------  --------  -------  -------

                                                                        Current       Prior
                                                                         Years        Years
      -------------  ---------
1999         13,908    157,425    80,561              261,800  13,125      217,686   24,722    42,665  227,577  236,401
2000          6,454    113,149    62,386              145,532  12,171      132,781  (19,013)   37,453  174,412  182,099
2001            763     84,876    59,216              108,197   6,998       94,556      660     1,380  132,599  193,186
</TABLE>

<PAGE>



SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on  its  behalf  by  the  undersigned,  thereto  duly  authorized.

GORAN  CAPITAL  INC.



                              ____________________________
April  8,  2002                         By:  /s/  Alan  G.  Symons
                              Chief  Executive  Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed  below by the following persons on April 8, 2002, on behalf of
the  Registrant  in  the  capacities  indicated:

(1)  Principal  Executive  Officer:



____________________
/s/  Alan  G.  Symons
Chief  Executive  Officer

(2)  Principal  Financial  Officer:



____________________
/s/  John  G.  Pendl
Chief  Financial  Officer,
Principal  Accounting  Officer


(3)  The  Board  of  Directors:



____________________     ____________________    ____________________
/s/  G.  Gordon  Symons /s/  J. Ross Schofield /s/  John  K.McKeating
Chairman  of  the  Board          Director                  Director





____________________          ____________________
/s/  Ron  L.  Foxcroft       /s/  David  B.  Shapira
Director                      Director



____________________          __________________
/s/  Douglas  H.  Symons      /s/  Alan  G.  Symons
Director                      Director

<PAGE>


<PAGE>
                                  EXHIBIT INDEX
Reference  to
Regulation  S-K
Exhibit  No.  Document


2.1          The  Strategic  Alliance  Agreement  by  and  between  Continental
Casualty  Company  and  IGF  Insurance  Company,  IGF  Holdings, Inc. and Symons
International  Group,  Inc. dated February 28, 1998 is incorporated by reference
to  Exhibit  2.1  of  the  Registrant's  1997  Form  10-K.

2.2          The  MPCI  Quota  Share  Reinsurance  Contract  by  and  between
Continental  Casualty  Company and IGF Insurance Company, IGF Holdings, Inc. and
Symons  International  Group,  Inc.  dated  February 28, 1998 is incorporated by
reference  to  Exhibit  2.2  of  the  Registrant's  1997  Form  10-K.

2.3          The  MPCI  Quota  Share  Reinsurance  Agreement  by  and  between
Continental  Casualty  Company and IGF Insurance Company, IGF Holdings, Inc. and
Symons  International  Group,  Inc.  dated  February 28, 1998 is incorporated by
reference  to  Exhibit  2.3  of  the  Registrant's  1997  Form  10-K.

2.4          The  Crop  Hail  Insurance  Quota  Share  Contract  by  and between
Continental  Casualty  Company and IGF Insurance Company, IGF Holdings, Inc. and
Symons  International  Group,  Inc.  dated  February 28, 1998 is incorporated by
reference  to  Exhibit  2.4  of  the  Registrant's  1997  Form  10-K.

2.5          The  Crop  Hail  Insurance  Quota  Share  Agreement  by and between
Continental  Casualty  Company and IGF Insurance Company, IGF Holdings, Inc. and
Symons  International  Group,  Inc.  dated  February 28, 1998 is incorporated by
reference  to  Exhibit  2.5  of  the  Registrant's  1997  Form  10-K.

2.6          The  Crop  Hail  Insurance  Services and Indemnity Agreement by and
between  Continental  Casualty  Company and IGF Insurance Company, IGF Holdings,
Inc.  and  Symons  International  Group,  Inc.  dated  February  28,  1998  is
incorporated  by  reference  to  Exhibit  2.6
     of  the  Registrant's  1997  Form  10-K.

2.7               The  Multiple  Peril  Crop  Insurance  Service  and  Indemnity
Agreement by and between Continental Casualty Company and IGF Insurance Company,
IGF  Holdings, Inc. and Symons International Group, Inc. dated February 28, 1998
is  incorporated by reference to Exhibit 2.7 of the Registrant's 1997 Form 10-K.

2.8     The  Stock  Purchase Agreement between IGF Holdings, Inc. and 1911 CORP,
dated  July  7,  1998  is  incorporated  by  reference  to  Exhibit  2.9  of the
Registrant's  1998  Form  10-K.

3.1     The  Registrant's Restated Articles of Incorporation are incorporated by
reference  to  Exhibit  1  of the Registrant's Form 20-F filed October 31, 1994.

3.2     Registrant's  Restated  Bylaws 1 is incorporated by reference to Exhibit
3.2  in  the  Registrant's  1996  Form  10-K.

4.1     Sample  Share  Certificate  and Articles of Amalgamation defining rights
attaching  to  common  shares  are  incorporated  by  reference  to Exhibit 2 of
Registrant's  Form  20-F  filed  October  31,  1994.

4.2(1)     The Senior Subordinated Indenture between Symons International Group,
Inc.  as  issuer and Wilmington Trust Company as trustee for SIG Capital Trust I
dated  August  12,  1997  is  incorporated by reference to Exhibit 4.1 in Symons
International  Group,  Inc.'s  Registration  Statement  on  Form  S-4,  Reg. No.
333-35713.

4.2(2)     First  Supplemental  Senior  Subordinated  Indenture  between  Symons
International  Group,  Inc.  and Wilmington Trust Company related to SIG Capital
Trust I dated January 15, 1998 is incorporated by reference to Exhibit 4.3(2) in
Registrant's  1997  Form  10-K.

10.1     The  Management  Agreement  among  Superior Insurance Company, Superior
American  Insurance  Company,  Superior  Guaranty  Insurance  Company  and  GGS
Management,  Inc.  dated  April 30, 1996 is incorporated by reference to Exhibit
10.5  of  Symons International Group, Inc.'s Registration Statement on Form S-1,
Reg.  No.  333-9129.

10.2     The  Management  Agreement  between Pafco General Insurance Company and
Symons  International  Group,  Inc.  dated  May  1,  1987,  as  assigned  to GGS
Management,  Inc.  effective  April  30,  1996,  is incorporated by reference to
Exhibit  10.6  of  Symons  International Group, Inc.'s Registration Statement on
Form  S-1,  Reg.  No.  333-9129.

10.3     The  Administration  Agreement between IGF Insurance Company and Symons
International  Group,  Inc. dated February 26, 1990, as amended, is incorporated
by  reference to Exhibit 10.7 of Symons International Group, Inc.'s Registration
Statement  on  Form  S-1,  Reg.  No.  333-9129.

10.4     The  Agreement  between  IGF Insurance Company and Symons International
Group,  Inc. dated November 1, 1990 is incorporated by reference to Exhibit 10.8
of  Symons International Group, Inc.'s  Registration Statement on Form S-1, Reg.
No.  333-9129.

10.5     The Registration Rights Agreement between Goran Capital Inc. and Symons
International  Group,  Inc.  dated  May 29, 1996 is incorporated by reference to
Exhibit  10.13 of Symons International Group, Inc.'s  Registration  Statement on
Form  S-1,  Reg.  No.  333-9129.

10.6*     The  Employment  Agreement  between  Goran  Capital  Inc.,  Symons
International  Group,  Inc.  and  Douglas  H.  Symons effective March 8, 1999 is
incorporated  by  reference  to Exhibit 10.5 of the Registrant's 2000 Form 10-K.

10.7*     The  Employment  Agreement  between  Goran  Capital  Inc.,  Symons
International  Group,  Inc.  and  David  N.  Hafling  dated  October  15,  2002.

10.8*     The  Employment  Agreement  between  Goran  Capital  Inc.,  Symons
International  Group,  Inc.  and  Gene  S.  Yerant  effective  January 10, 2000.

10.9     The  GGS  Management  Holdings,  Inc.  1996  Stock  Option  Plan  is
incorporated by reference to Exhibit 10.21 of Symons International Group, Inc.'s
Registration  Statement  on  Form  S-1,  Reg.  No.  333-9129.

10.10     The  Symons  International  Group,  Inc.  1996  Stock  Option  Plan is
incorporated by reference to Exhibit 10.22 of Symons International Group, Inc.'s
Registration  Statement  on  Form  S-1,  Reg.  No.  333-9129.

10.11     The  Symons  International  Group,  Inc.  Retirement  Savings  Plan is
incorporated by reference to Exhibit 10.24 of Symons International Group, Inc.'s
Registration  Statement  on  Form  S-1,  Reg.  No.  333-9129.

10.12     The  Insurance  Service  Agreement  between  Mutual  Service  Casualty
Company  and  IGF  Insurance  Company  dated  May  20,  1996  is incorporated by
reference  to  Exhibit  10.25 of Symons International Group, Inc.'s Registration
Statement  on  Form  S-1,  Reg.  No.  333-9129.

10.13(2)     The  Crop  Hail Quota Share Reinsurance Contract and Crop Insurance
Service  Agreement  between  Pafco  General  Insurance Company and IGF Insurance
Company is incorporated by reference to Exhibit 10.27(2) of Symons International
Group,  Inc.'s  Registration  Statement  on  Form  S-1,  Reg.  No.  333-9129.

10.13(3)     The  Automobile  Third  Party  Liability  and Physical Damage Quota
Share  Reinsurance  Contract  between  IGF  Insurance  Company and Pafco General
Insurance  Company  is  incorporated  by reference to Exhibit 10.27(3) of Symons
International  Group,  Inc.'s  Registration  Statement  on  Form  S-1,  Reg. No.
333-9129.

10.13(5)     The  Standard  Reinsurance Agreement between Federal Crop Insurance
Corporation  and  IGF  Insurance  Company  dated July 1, 1997 is incorporated by
reference  to  Exhibit  10.13(6)  of  Registrant's  1999  Form  10-K.

10.13(9)     Amendment  No.  1  to the 1998 Standard Reinsurance Agreement dated
July  29,  1998 is incorporated by reference to Exhibit 10.13(9) of Registrant's
1999  Form  10-K  .

10.13(10)     The  Aggregate  Loss  Ratio Reinsurance Agreement between National
Union  Fire Insurance Company of Pittsburgh, PA and Granite Reinsurance Company,
Ltd.  effective  January  1,  2000.

10.13(11)     The  Quota  Share Reinsurance Agreement between Superior Insurance
Company  and  its  Wholly  -Owned Insurance Subsidiaries and National Union Fire
Insurance  Company  of  Pittsburgh,  PA  effective  January  1,  2000.

10.13(12)     The  Quota  Share  Reinsurance  Agreement  between  Pafco  General
Insurance  Company  and  National Union Fire Insurance Company of Pittsburgh, PA
effective  January  1,  2000.

10.13(13)     Addendum  I  to Aggregate Loss Ratio Reinsurance Agreement between
National  Union Fire Insurance Company of Pittsburgh, PA and Granite Reinsurance
Company,  Ltd.  dated  December  21,  2000.

10.13(14)     Addendum  No.  2  to  Quota  Share Reinsurance Agreement effective
January  1,  2000  between  Superior  Insurance  Company  and  its  Wholly-Owned
Insurance Subsidiaries  and National Union Fire Insurance Company of Pittsburgh,
PA  effective  December  30,  2000.

10.13(15)     Addendum  No.  2  to  Quota  Share Reinsurance Agreement effective
January  1, 2000 between Pafco General Insurance Company and National Union Fire
Insurance  Company  of  Pittsburgh,  PA  effective  December  30,  2000.

10.14(1)     The  SIG  Capital  Trust I 9  % Trust Preferred Securities Purchase
Agreement  dated August 7, 1997 is incorporated by reference to Exhibit 10.19(1)
of  Symons  International  Group, Inc.'s December 31, 1997 Form 10-K/A, Reg. No.
000-29042.

10.14(2)     The Registration Rights Agreement among Symons International Group,
Inc.,  SIG  Capital  Trust  I  and  Donaldson,  Lufkin  &  Jenrette  Securities
Corporation,  Goldman, Sachs & Co., CIBC Wood Gundy Securities Corp. and Mesirow
Financial,  Inc.  dated  August 12, 1997 is incorporated by reference to Exhibit
4.7  in  Symons  International  Group,  Inc.'s  Registration  Statement  on Form
S-4,Reg.  No.  333-35713.

10.14(3)     The  Declaration  of  Trust  of SIG Capital Trust 1 dated August 4,
1997  is incorporated by reference to Exhibit 4.3 in Symons International Group,
Inc.'s  Registration  Statement  on  Form  S-4,  Reg.  No.  333-35713.

10.14(4)     The  Amended and Restated Declaration of Trust of SIG Capital Trust
I  dated  August  12, 1997 is incorporated by reference to Exhibit 4.4 in Symons
International  Group,  Inc.'s  Registration  Statement  on  Form  S-4,  Reg. No.
333-35713.

10.15     The  Goran Capital Inc. Share Option Plan is incorporated by reference
to Exhibit 10.20 of Symons International Group, Inc.'s Registration Statement on
Form  S-1,  Reg.  No.  333-9129.

10.16*          The  Employment  Agreement  between  Symons International Group,
Inc.,  Goran  Capital  Inc.  and  Gregg  F. Albacete effective January 26, 2000.

10.17          The  Asset  Purchase  Agreement by and among Acceptance Companies
Inc.,  American  Growers  Insurance  Company,  American Agrisurance, Inc., Goran
Capital  Inc.,  Symons  International  Group,  Inc.,  IGF Holdings, Inc. and IGF
Insurance  Company  dated May 23, 2001 incorporated by reference to Exhibit 10.9
of  the  Registrant's  June  30,  2001  Form  10-Q/A.

10.18          First  Amendment  to  Asset  Purchase  Agreement  by  and  among
Acceptance  Insurance  Companies,  Inc.,  American  Growers  Insurance  Company,
American  Agrisurance,  Inc.,  Goran  Capital  Inc., Symons International Group,
Inc.,  IGF  Holdings,  Inc.  and  IGF  Insurance  Company  dated  June  5,  2001
incorporated  by  reference  to  Exhibit 10.10 of the Registrant's June 30, 2001
Form  10-Q/A.

10.19          Assignment and Assumption Agreement by IGF Holdings, Inc. and IGF
Insurance  Company  and  Acceptance  Insurance Companies Inc. dated May 23, 2001
incorporated  by  reference  to  Exhibit 10.11 of the Registrant's June 30, 2001
Form  10-Q/A.

10.20     IGF/Acceptance  Retrocession  Agreement  by  and  between  Acceptance
Insurance  Company  and IGF Insurance Company dated May 23, 2001 incorporated by
reference  to  Exhibit  10.13  of  the  Registrant's  June 30, 2001 Form 10-Q/A.

10.21     Consulting  and  Non-competition  Agreement  by  and  between  Symons
International  Group, Inc. and Acceptance Insurance Companies Inc. dated May 23,
2001  incorporated  by  reference  to Exhibit 10.15 of the Registrant's June 30,
2001  Form  10-Q/A.

10.22*     Amendment  to Personal Employment Agreement effective January 1, 1996
between  Granite  Reinsurance  Company  Ltd.  and  G.  Gordon  Symons.

10.23*     Addendum  to  Employment Agreement between Goran Capital Inc., Symons
International  Group,  Inc.  and  G.  Gordon  Symons  effective January 1, 1998.

10.24*     Consulting  Agreement  between  Granite  Reinsurance Company Ltd. and
Goran  Management  Ltd.  effective  January  1,  1995.

10.25*     Addendum to Consulting Agreement dated January 1, 1998 by and between
Goran  Capital  Inc.,  Symons  International  Group,  Inc.,  Granite Reinsurance
Company  Ltd.,  Goran  Management  Bermuda  Ltd.  and  G.  Gordon  Symons.

10.26     Consulting  and Non-competition Agreement by and between Goran Capital
Inc.  and  Acceptance  Insurance  Companies  Inc.  dated  May  23,  2001.

10.27     Granite  Reinsurance Company Ltd./Acceptance Crop Hail Retrocession in
Agreement  between  Acceptance Insurance Company and Granite Reinsurance Company
Ltd.  dated  May23,  2001.

10.28          MPCI  Stop  Loss Reinsurance Contract between Granite Reinsurance
Company,  Ltd.  and  Acceptance Insurance Companies Inc. effective July 1, 2000.

13.          The  2001  Annual  Report  of  Goran  Capital  Inc.

*.          Compensation related agreement.

<PAGE>
                                     ------
                        QUOTA SHARE REINSURANCE AGREEMENT
                        ---------------------------------

                                     BETWEEN

     SUPERIOR INSURANCE COMPANY AND ITS WHOLLY-OWNED INSURANCE SUBSIDIARIES
                       (HEREINAFTER CALLED THE "COMPANY")

                                       AND

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                       (HEREAFTER CALLED THE "REINSURER")


                                      INDEX
                                      -----

<TABLE>
<CAPTION>

     ARTICLE               SUBJECT                       PAGE
     -------               -------                       ----


<S>    <C>                                  <C>
I      BUSINESS COVERED                     1.
II. .  TERM AND TERMINATION                 1.
III    TERRITORY                            1.
IV. .  QUOTA SHARE PARTICIPATION AND LIMIT  1.
V      WARRANTY                             2.
VI     PREMIUM AND COMMISSION               2.
VII    COMMUTATION                          2.
VIII.  DEFINITIONS                          2.
IX     REPORTS AND ACCOUNTING               2.
X . .  EXCLUSIONS                .          3.
XI. .  ACCESS TO RECORDS             .      4.
XII    ARBITRATION                          4.
XIII.  CONFIDENTIALITY              .       5.
XIV    ERRORS AND OMISSIONS                 5.
XV     FEDERAL EXCISE TAX                   5.
XVI    FOLLOW THE FORTUNES                  5.
XVII.  GOVERNING LAW                        5.
XVIII  INSOLVENCY                           6.
XIX    OFFSET                               7.
XX. .  SEVERABILITY                         7.
XXI    SPECIAL TERMINATION OR SETTLEMENT    7.
XXII.  CURRENCY REVALUATION          .      8.
</TABLE>


ATTACHMENTS:
     NUCLEAR  INCIDENT  EXCLUSION  CLAUSE  - LIABILITY - REINSURANCE, (BRMA 35A)


<PAGE>
                                     ------
                        QUOTA SHARE REINSURANCE AGREEMENT
                        ---------------------------------

                                     BETWEEN

     SUPERIOR INSURANCE COMPANY AND ITS WHOLLY-OWNED INSURANCE SUBSIDIARIES
                       (HEREINAFTER CALLED THE "COMPANY")

                                       AND

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                      (HEREINAFTER CALLED THE "REINSURER")

    ************************************************************************

ARITCLE  I                    BUSINESS  COVERED

The  Reinsurer hereby agrees to reinsure a quota share of policies classified by
the  Company  as  non-standard  automobile;  both  liability and physical damage
(including  business  assumed  that  is  directly  underwritten  by the Company)
in-force  on  January  1,  2000 and effective during the term of this agreement.

ARITCLE  II                    TERM  AND  TERMINATION

This  Agreement  commences  at 12:01 a.m. Eastern Standard Time, January 1, 2000
and  shall  remain in force until 11:59 p.m. Eastern Standard Time, December 31,
2000.  Either  party  may  terminate  effective on the first day of any calendar
quarter  with 60 days advance written notice.  The Reinsurer shall remain liable
for  loss  under  reinsured  policies  effective  prior to the termination date.

ARITCLE  III               TERRITORY

This  Agreement  covers  risks located nationwide, as per the Company's original
Policies.

ARTICLE  IV     QUOTA  SHARE  PARTICIPATION  AND  LIMIT
-----------     ---------------------------------------

The  aggregate  quota  share  cession  shall be at the option of the Company and
subject  to a minimum of 20% and a maximum of 75%.  However, the maximum cession
will  be  limited  to  $11,000,000 per quarter which shall be in addition to the
cession  of  the  in-force  business  which  shall be at the minimum provisional
percent.  The  provisional quota share percent shall be 20%.   In the event this
produces in excess of $11 million for any one quarter, the dollar amount cession
shall  be  reduced  to  $11,000,000  dollars  for  the Company.  The quota share
percent  applicable  for  the  Company shall be the ratio of the adjusted dollar
cession  to  the  gross subject written premium for the Company in that quarter.
This  quarterly limit can be increased by mutual agreement between the Reinsurer
and  the  Company.  The Company shall notify the Reinsurer prior to the last day
of  the  calendar  quarter  of  the  quota  share  percent.

The  Reinsurer's  liability  for  aggregate  losses,  including  allocated  loss
adjustment  expenses (and unallocated loss adjustment expenses, where applicable
under  REPORTS  AND ACCOUNTING), shall be limited to 97% of earned premium ceded
for  all business effective in all calendar quarters plus the in-force business.
The  calculation  shall  be  from  inception  to  date.

ARTICLE  V                    WARRANTY
----------                    --------

The  Company  shall  maintain  catastrophe and per risk reinsurance limiting the
ceded  loss  from  any  one  occurrence  or for any one risk so as not to exceed
$250,000  or  $350,000,  respectively,  or  it  shall  be  so  deemed.



ARTICLE  VI          PREMIUM  AND  COMMISSION

The  Company  will  pay  the  Reinsurer a premium equal to the pro rata share of
premium  applicable  on  all  policies  ceded  and the Reinsurer shall allow the
Company a minimum and provisional ceding commission of 18% on such premium.  The
ceding  commission slides 1 for 1 for each 1.0% decrease in the Loss Ratio below
79%  up  to  a  maximum  ceding  commission  of  31%  at a 66% loss ratio.  This
calculation  shall be from inception to date for all business ceded effective in
all  calendar  quarters  plus  the  in-force  business.

ARITCLE  VII               COMMUTATION

The  Company  may  request  and  the  Reinsurer shall grant a commutation of all
liabilities  to  be effective at the end of any calendar quarter.  The Reinsurer
shall  pay the Company the outstanding case reserves plus an amount for incurred
but  not  reported  losses  as  mutually  agreed.  In the event mutual agreement
cannot be reached, the Reinsurer may appoint an independent actuary to establish
the  incurred but not reported losses. The Company shall notify the Reinsurer of
such request within 60 days of the close of the calendar quarter.  In such event
the  Company  shall pay the positive Funds Withheld Balance to the Reinsurer and
the  Company  shall  release  the  Reinsurer  of  any  and  all  liabilities.

ARTICLE  VIII               DEFINITIONS
-------------               -----------

Funds  Withheld  Balance  shall  mean:

     Previous  Funds  Withheld  Balance,
     plus  97%  of  ceded  written  premium,
     minus  ceding  commission,
     minus  ceded  paid  losses  (including allocated loss adjustment expenses),
     minus  ceded  paid  unallocated  loss  adjustment  expenses, if applicable.

Loss  Ratio shall mean losses paid and outstanding, including IBNR and allocated
loss  adjustment  expenses,  divided  by  earned  premium.

Premium  shall  mean  the  premium charged the insured, net of returned premium,
however,  uncollectable  premium  shall  not  be  deemed  a  return  premium.

Allocated  loss  adjustment  expenses  shall  be  as  defined  under  statutory
accounting  practices.

Unallocated  loss  adjustment  expenses  shall  be  as  defined  under statutory
accounting  practices.

ARTICLE  IX          REPORTS  AND  ACCOUNTING

Within 45 days after the end of each calendar quarter, the Company shall furnish
an  account  statement to the Reinsurer, for their share on the Business Covered
including  the  following:
1.     Written  premiums-credit

2.     Commission-debit

3.     Net  losses  (including  allocated  loss adjustment expenses) paid by the
Company  -  debit

4.     Reserve  for  outstanding  losses  including  incurred  but  not reported
(including  allocated  loss  adjustment  expenses).

5.     Unearned  Premium.

In  the  event the loss ratio is in excess of 85%, the Reinsurer shall be liable
for  unallocated loss adjustment expenses equal to 1% of earned premium for each
Loss  Ratio  point  in  excess  of  85%,  however, not in excess of 6% of earned
premium.  When applicable, the coverage for unallocated loss adjustment expenses
shall  be  included in the maximum limit of 97% of earned premium ceded referred
to  in  QUOTA  SHARE  PARTICIPATION AND LIMIT.  The forgoing shall be a combined
account  for  all  business effective in all calendar quarters plus the in-force
business.  The Company shall report this information separately for all business
effective  in  each  calendar  quarter  plus a report for the in-force business.

The  Company  will pay the Reinsurer 3% of the premium with the balance, if any,
being  held  in  a  Funds  Withheld  Balance  for  subsequent payment of losses,
commission  adjustments  and  return premiums.  Amounts due the Company shall be
withdrawn  from  the Funds Withheld Balance and if the Funds Withheld Balance is
negative,  the  Reinsurer  shall  pay  the  amount  due.


ARTICLE  X          EXCLUSIONS
----------          ----------

This  reinsurance  does  not  apply  to  the  following:

a.     Any  actual  or  alleged  failure,  malfunction  or  inadequacy  of:

1)     Any  of  the  following,  whether  belonging to any insured or to others:
a)     Computer  hardware,  including  microprocessors;
b)     Computer  application  software;
c)     Computer  operating  systems  and  related  software;
d)     Computer  networks;
e)     Microprocessors  (computer  chips)  not  part  of any computer system, or
f)     Any  other  computerized  or  electronic  equipment  or  components;  or
2)     Any  other  products, an any services, data or functions that directly or
indirectly use or rely upon, in any manner, any of the terms listed in paragraph
2.a.  1);
due  to the inability to correctly recognize, process, distinguish, interpret or
accept  the  year  2000  and  beyond.

b.     Any  advice,  consultation, design, evaluation, inspection, installation,
maintenance,  repair, replacement or supervision provided or done by the Company
or  for  the  Company to determine, rectify or test for, any potential or actual
problems  described  in  paragraph  2.a.

c.     Any loss or liability accruing to the Company directly or indirectly from
any  insurance  written by or through any Pool or Association including Pools or
Associations  in  which membership by the Company is required under any statutes
or  regulations(other  than  assigned  risk  automobile  plans).

d.     Business  excluded  by  the attached Nuclear Incident Exclusion Clauses -
Liability  -  Reinsurance.

e.     All liability of the Reassured arising, by contract, operation of law, or
otherwise,  from  its  participation  or  membership,  whether  voluntary  or
involuntary,  in  any  insolvency fund.  "Insolvency fund" includes any guaranty
fund,  insolvency  fund,  plan,  pool,  association,  fund or other arrangement,
howsoever  denominated,  established  or  governed,  which  provides  for  any
assessment  of  or  payment or assumption by the Reassured of part or all of any
claim, debt, charge, fee or other obligation of an insurer, or its successors or
assigns,  which has been declared by any competent authority to be insolvent, or
which  is  otherwise deemed unable to meet any claim, debt, charge, fee or other
obligation  in  whole  or  in  part.


ARTICLE  XI          ACCESS  TO  RECORDS
-----------          -------------------

The  Reinsurer, or its duly authorized representative, shall have free access at
all  reasonable  times during and after the currency of this agreement, to books
and  records maintained by any of the division, department and branch offices of
the Company which are involved in the subject matter of this Agreement and which
pertain  to the reinsurance provided hereunder and all claims made in connection
therewith.  Notwithstanding  the  provisions  of  the  preceding  sentence,  if
undisputed  balances  due  from the Reinsurer under this Agreement have not been
paid for the two most recent reported calendar quarters, the Reinsurer shall not
have  access  to any of the Company's records relating to this Agreement without
the  specific  consent  of  the  Company.

ARTICLE  XII          ARBITRATION
------------          -----------

A.     All  disputes  or  differences  arising out of the interpretation of this
Agreement  shall  be  submitted  to  the  decision of two arbitrators, one to be
chosen  by  each party, and in the event of the arbitrators failing to agree, to
the  decision  of an umpire to be chosen by the arbitrators. The arbitrators and
umpire  shall  be disinterested active or retired executive officials of fire or
casualty  insurance or reinsurance companies or Underwriters at Lloyd's, London.
If  either  of the parties fails to appoint an arbitrator within one month after
being  required  by  the  other party in writing to do so, or if the arbitrators
fail  to appoint an umpire within one month of a request in writing by either of
them  to  do  so,  such  arbitrator  or umpire, as the case may be, shall at the
request  of  either  party be appointed by a Justice of the Supreme Court of the
State  of  New  York.

B.     The  arbitration  proceeding  shall take place in New York, New York. The
applicant  shall  submit  its case within one month after the appointment of the
court of arbitration, and the respondent shall submit its reply within one month
after the receipt of the claim. The arbitrators and umpire are relieved from all
judicial  formality  and  may  abstain  from  following the strict rules of law.
Punitive  damages  shall  not be awarded by the panel against either party which
are  apart  from  the punitive damages that may be in dispute. They shall settle
any dispute under the Agreement according to an equitable rather than a strictly
legal  interpretation  of  its  terms.

C.  Their  written decision shall be provided to both parties and shall be final
and  not  subject  to  appeal.

D.  Each  party  shall bear the expenses of his arbitrator and shall jointly and
equally  share with the other the expenses of the umpire and of the arbitration.

E.  This  Article  shall  survive  the  termination  of  this  Agreement.

ARTICLE  XIII          CONFIDENTIALITY
-------------          ---------------

All  terms  and  conditions  of this Agreement and any materials provided in the
course  of  inspection  shall  be  kept confidential by the Reinsurer as against
third  parties,  unless the disclosure is required pursuant to process of law or
unless the disclosure is to Reinsurer's retrocessionaires, financial auditors or
governing  regulatory  bodies.  Disclosing  or  using  this  information for any
purpose  beyond  the scope of this Agreement, or beyond the exceptions set forth
above,  is  expressly  forbidden  without  the  prior  consent  of  the Company.

ARTICLE  XIV          ERRORS  AND  OMISSIONS
------------          ----------------------

Any  inadvertent  delay, omission or error shall not relieve either party hereto
from any liability which would attach to it hereunder if such delay, omission or
error  had  not  been  made, provided such delay, omission or error is rectified
immediately  upon  discovery.

ARTICLE  XV          FEDERAL  EXCISE  TAX
-----------          --------------------

(Federal  Excise  Tax  applies  only  to  those  Retrocessionaires,  excepting
Underwriters  at  Lloyd's London and other Retrocessionaires exempt from Federal
Excise  Tax,  who  are  domiciled  outside  the  United  States  of  America.)
A.  The  Retrocessionaires  has  agreed  to  allow for the purpose of paying the
Federal  Excise  Tax 1% of the premium payable hereon to the extent such premium
is  subject  to  Federal  Excise  Tax.

B.  In  the  event  of  any  return  of  premium  becoming  due  hereunder  the
Retrocessionaires  will  deduct  1%  from  the  amount  of  the  return  and the
Retrocedent  or  its  agent should take steps to recover the Tax from the United
States  Government.



ARTICLE  XVI          FOLLOW  THE  FORTUNES
------------          ---------------------

A.     The  Reinsurer's  liability  shall attach simultaneously with that of the
Company  and  shall  be  subject  in  all  respects  to  the  same risks, terms,
conditions,  interpretations, waivers, and to the same modification, alterations
and cancellations as the respective insurances (or reinsurances) of the Company,
the  true intent of this Agreement being that the Reinsurer shall, in every case
to  which  this  Agreement  applies,  follow  the  underwriting  fortunes of the
Company.

B.     Nothing  shall  in  any  manner  create  any obligations or establish any
rights  against  the  Reinsurer in favor of any third parties or any persons not
parties  to  this  Agreement.

ARTICLE  XVII          GOVERNING  LAW
-------------          --------------

This Agreement shall be governed by and construed in accordance with the laws of
the  state  of  New  York.

ARTICLE  XVIII          INSOLVENCY
--------------          ----------

A.      In  the  event  of  insolvency  and  the  appointment  of  conservator,
liquidator,  or  statutory  successor  of the ceding company, the portion of any
risk or obligation assumed by the reinsurer shall be payable to the conservator,
liquidator, or statutory successor of the company having authority to allow such
claims:  without  diminution  because  of  that  insolvency,  or  because  the
conservator,  liquidator,  or  statutory  successor  has  failed to pay all or a
portion  of  any  claims.  Payments  directly  to  the  ceding insurer or to its
conservator,  liquidator,  or  statutory successor, except where the contract of
insurance or reinsurance specifically provides another payee of such reinsurance
in  the event of the insolvency of the ceding insurer.  The reinsurance contract
may  provide that the conservator, liqudator, or statutory successor of a ceding
insurer  shall give written notice of the pendency of a claim against the ceding
insurer  indicating the policy or bond reinsured, within a reasonable time after
such claims is filed and the reinsurer may interpose, at its own expense, in the
proceeding  where  such  claims  is  to be adjusticated, any defense or defenses
which  it  amy  deem  available  to  the  ceding  insurere  or  its conservator,
liquidator,  or statutory successor.  The expense thus incurred by the reinsurer
shall  be  payable  subject to court approval out of the estate of the insolvent
ceding  insurer  as  part  of  the expense of conservation or liquidation to the
extent  of  a  proportionate share of the benefit which may accrue to the ceding
insurer  in  conversation  or  liquidation,  solely  as  result  of  the defense
undertaken  by  the  reinsurer.  It  is  agreed,  however,  that the liquidator,
receiver,  conservator  or statutory successor of the Company shall give written
notice  to  the  Reinsurers of the pendency of a claim against the Company which
would involve a possible liability on the part of the Reinsurers, indicating the
policy  or bond reinsured, within a reasonable time after such claim is filed in
the conservation or liquidation proceeding or in the receivership. It is further
agreed  that  during  the  pendency of such claim the Reinsurers may investigate
such  claim  and  interpose,  at their own expense, in the proceeding where such
claim is to be adjudicated, any defense or defenses that they may deem available
to the Company or its liquidator, receiver, conservator, or statutory successor.
The  expense thus incurred by the Reinsurers shall be chargeable, subject to the
approval  of  the  Court,  against  the  Company  as  part  of  the  expense  of
conservation  or  liquidation  to  the extent of a pro rata share of the benefit
which  may accrue to the Company solely as a result of the defense undertaken by
the  Reinsurers.

B.     Where  two  or  more  Reinsurers  are  involved  in  the same claim and a
majority in interest elect to interpose defense to such claim, the expense shall
be  apportioned  in  accordance  with  the terms of the Agreement as though such
expense  had  been  incurred  by  the  Company.

C.     The  reinsurance  shall be payable by the Reinsurers to the Company or to
its  liquidator,  receiver,  conservator,  or  statutory  successor,  except  as
provided  by  Section 4118(a) (1) (A) and 1114 (c) of the New York Insurance Law
or  except  (a)  where the Agreement specifically provides another payee of such
reinsurance  in  the  event  of the insolvency of the Company, and (b) where the
Reinsurers  with  the consent of the direct insured or insureds have voluntarily
assumed  such  policy  obligations  of  the Company as direct obligations of the
Reinsurers  to  the  payees  under  such  policies  and  in substitution for the
obligations  of  the  Company  to  the payees. Then, and in that event only, the
Company,  with  the  prior approval of the certificate of assumption on New York
risks  by  the Superintendent of Insurance of the State of New York, is entirely
released  from its obligation and the Reinsurers pay any loss directly to payees
under  such  policy.

D.     Notwithstanding  clauses  A,  B,  and  C, where the Company is authorized
under  the  Insurance  Companies  Act (Canada) to insure in Canada risks, in the
event  of  the  insolvency of the Company, reinsurance payable in respect of the
insurance  business in Canada of the Company shall be payable to the Chief Agent
in  Canada  of  the  Company  or  to  the  liquidator,  receiver, conservator or
statutory  successor appointed in Canada in respect of the insurance business in
Canada  of  the  Company  without  diminution  because  of the insolvency of the
Company  or  because  the  Company  or  a  liquidator,  receiver, conservator or
statutory  successor  of the Company has failed to pay all or any portion of any
claim.  All  other  terms and conditions of clauses A, B, and C remain in effect
and  apply  to  this  clause  D  which  shall  prevail if there is a conflict or
inconsistency.

ARTICLE  XIX               OFFSET
------------               ------

Each  party  hereto  shall  have,  and may exercise at any time and from time to
time, the right to offset any undisputed balance or balances, whether on account
of  premiums  or  on account of losses, due from such party to the other (or, if
more  than  one, any other) party hereto under this Agreement or under any other
reinsurance  agreement heretofore or hereafter entered into by and between them,
and  may  offset  the same against any undisputed balance or balances due to the
former from the latter under the same or any other reinsurance agreement between
them,  and  the  party asserting the right of offset shall have and may exercise
such right whether the undisputed balance or balances due to such party from the
other  are  on account of premiums or on account of losses and regardless of the
capacity,  whether as assuming insurer or as ceding insurer, in which each party
acted  under  the  agreement  or,  if  more  than  one, the different agreements
involved

Where  the  Company  is authorized under the Insurance Companies Act (Canada) to
insure in Canada risks, for the purpose of this Article, the branch of a Company
in  Canada shall be considered as a party separate and distinct from the Company
and  the  right  of  offset  provided for in this Article shall belong to and be
applied  against  that  branch  as though it were a separate and distinct party.


ARTICLE  XX               SEVERABILITY
-----------               ------------

If any provision of this Agreement shall be rendered illegal or unenforceable by
the  laws,  regulations  or  public policy of any state, such provision shall be
considered  void  in  such  state,  but  this  shall  not affect the validity or
enforceability of any other provision of this Agreement or the enforceability of
such  provision  in  any  other  jurisdiction.


ARTICLE  XXI     SPECIAL  TERMINATION  OR  SETTLEMENT
------------     ------------------------------------

SECTION  I  (TERMINATION)
-------------------------
A.  Either  party  may  terminate  this Agreement immediately in the event that:
1.     The  other  party  should  at  any  time  become insolvent, or suffer any
impairment  of contributed capital, or file a petition in bankruptcy, or go into
liquidation,  rehabilitation,  or  voluntary  supervision,  or  have  a receiver
appointed,  or  be  acquired  or  controlled  by  any other insurance company or
organization,  or
2.     There  is a severance of obstruction of free and unfettered communication
and/or  normal commercial and/or financial intercourse between the United States
of  America  and  the  country in which the Reinsurer is incorporated or has its
principal  office as a result of war, currency regulations, or any circumstances
arising  out  of  political,  financial  or  economic  emergency.

B.  Either  party  may  terminate  this Agreement immediately in the event that:
1.     Upon  application  of  the  NAIC  Insurance Regulatory Information System
(IRIS)  tests to the Company's quarterly and annual statement (which the Company
hereby  agrees  to furnish the Reinsurer upon request) it is found that four (4)
or  more  of  the Company's IRIS financial ratio values are outside of the usual
range  established  in  the  IRIS  system.
2.     Upon  review  of  the  Insurance  Solvency International ISI) Performance
Tests  as  published  with  respect  to the Company (or upon application of such
Performance Tests to the Company's annual financial statements which the Company
hereby  agrees  to  furnish to the Reinsurer upon request) it is found that four
(4)  or  more of the Company's ratios are outside of normal range (as defined by
the  ISI  standard).

Termination  under  A. or B. shall be automatic.  The Reinsurer will specify the
mode  of  payment,  i.e.  a  run-off  basis  or a clean-cut basis with portfolio
transfer,  if  applicable.

SECTION  II  (SETTLEMENT)
-------------------------
After  termination  of  this  Agreement under this or any article, including the
natural  expiry of the Agreement, if the Reinsurer has any residual liability to
the  Company,  the Company will, at the request of the Reinsurer, furnish to the
Reinsurer  statements  as  specified  in Section B1., above, and if four or more
values  are outside of the usual range established in the IRIS or ISI system (as
applicable  in  accordance with Section B1., above) the Reinsurer shall have the
option  of  an immediate commutation in accordance with the commutation article.
In addition to the payments specified in that article the Reinsurer shall return
the  unearned premium and the Company will allow a deduction of commission equal
to  the  average  ceding  commission  on  the  ceded  premium.


ARTICLE  XXII          CURRENCY  REVALUATION
-------------          ---------------------

It  is  agreed that underwriting to contractual and/or understanding limits will
be  done  in  terms  of  United  States (U.S.) dollar equivalent on the basis of
exchange  rates in effect at the time of inception of new or renewal business or
at the time an addition to an existing risk takes place. In the event there is a
reduction  in parity value of the U.S. dollar from that existing at the time the
risk  was  written  which results in the contractual and/or understanding limits
being  exceeded,  the  Company  shall be held covered for such excess until next
renewal  of  the  risk,  at  which  time  underwriting  will then conform to the
contractual  and/or  understanding  U.S.  dollar  limits  in effect at the time.





IN  WITNESS  WHEREOF:  the  parties  hereto  have  caused  this  Agreement to be
executed  by  their  authorized  representative.

In:  ___________________  this  ___________  day  of ______________________ 2000

                 SUPERIOR INSURANCE COMPANY AND ITS WHOLLY-OWNED
                             INSURANCE SUBSIDIARIES


By:  ___________________________  Title:  ______________________________





and  in:  _______________this  ____________ day of ________________________ 2000


            NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.


By:  __________________________  Title:  ________________________________


<PAGE>



                        QUOTA SHARE REINSURANCE AGREEMENT
                        ---------------------------------

                                     BETWEEN

                         PAFCO GENERAL INSURANCE COMPANY
                       (HEREINAFTER CALLED THE "COMPANY")

                                       AND

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                      (HEREINAFTER CALLED THE "REINSURER")


                                      INDEX
                                      -----
<TABLE>
<CAPTION>

     ARTICLE               SUBJECT                       PAGE
     -------               -------                       ----


<S>    <C>                                  <C>
I      BUSINESS COVERED                     1.
II. .  TERM AND TERMINATION                 1.
III    TERRITORY                            1.
IV. .  QUOTA SHARE PARTICIPATION AND LIMIT  1.
V      WARRANTY                             2.
VI     PREMIUM AND COMMISSION               2.
VII    COMMUTATION                          2.
VIII.  DEFINITIONS                          2.
IX     REPORTS AND ACCOUNTING               2.
X . .  EXCLUSIONS                .          3.
XI. .  ACCESS TO RECORDS             .      4.
XII    ARBITRATION                          4.
XIII.  CONFIDENTIALITY              .       5.
XIV    ERRORS AND OMISSIONS                 5.
XV     FEDERAL EXCISE TAX                   5.
XVI    FOLLOW THE FORTUNES                  5.
XVII.  GOVERNING LAW                        5.
XVIII  INSOLVENCY                           6.
XIX    OFFSET                               7.
XX. .  SEVERABILITY                         7.
XXI    SPECIAL TERMINATION OR SETTLEMENT    7.
XXII.  CURRENCY REVALUATION          .      8.
</TABLE>

                                       --
          ATTACHMENTS:
NUCLEAR  INCIDENT  EXCLUSION  CLAUSE  -  LIABILITY  -  REINSURANCE,  (BRMA  35A)


<PAGE>

                        QUOTA SHARE REINSURANCE AGREEMENT
                        ---------------------------------

                                     BETWEEN

                         PAFCO GENERAL INSURANCE COMPANY
                       (HEREINAFTER CALLED THE "COMPANY")

                                       AND

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                      (HEREINAFTER CALLED THE "REINSURER")


    ************************************************************************

ARTICLE  I               BUSINESS  COVERED

The  Reinsurer hereby agrees to reinsure a quota share of policies classified by
the  Company  as  non-standard  automobile;  both  liability and physical damage
(including  business  assumed  that  is  directly  underwritten  by the Company)
in-force  on  January  1,  2000 and effective during the term of this agreement.

ARTICLE  II               TERM  AND  TERMINATION

This  Agreement  commences  at 12:01 a.m. Eastern Standard Time, January 1, 2000
and  shall  remain in force until 11:59 p.m. Eastern Standard Time, December 31,
2000.  Either  party  may  terminate  effective on the first day of any calendar
quarter  with 60 days advance written notice.  The Reinsurer shall remain liable
for  loss  under  reinsured  policies  effective  prior to the termination date.

ARTICLE  III          TERRITORY

This  Agreement  covers  risks located nationwide, as per the Company's original
Policies.

ARTICLE  IV     QUOTA  SHARE  PARTICIPATION  AND  LIMIT
-----------     ---------------------------------------

The  aggregate  quota  share  cession  shall be at the option of the Company and
subject  to a minimum of 40% and a maximum of 75%.  However, the maximum cession
will  be  limited  to  $5,000,000  per quarter which shall be in addition to the
cession  of  the  in-force  business  which  shall be at the minimum provisional
percent.  The  provisional quota share percent shall be 40%.   In the event this
produces  in excess of $5 million for any one quarter, the dollar amount cession
shall be reduced to $5,000,000 dollars for the Company.  The quota share percent
applicable  for the Company shall be the ratio of the adjusted dollar cession to
the  gross  subject  written  premium  for  the  Company  in  that quarter. This
quarterly  limit  can be increased by mutual agreement between the Reinsurer and
the  Company.  The  Company  shall notify the Reinsurer prior to the last day of
the  calendar  quarter  of  the  quota  share  percent.

The  Reinsurer's  liability  for  aggregate  losses,  including  allocated  loss
adjustment  expenses (and unallocated loss adjustment expenses, where applicable
under  REPORTS  AND ACCOUNTING), shall be limited to 97% of earned premium ceded
for  all business effective in all calendar quarters plus the in-force business.
The  calculation  shall  be  from  inception  to  date.

ARTICLE  V               WARRANTY
----------               --------

The  Company  shall  maintain  catastrophe and per risk reinsurance limiting the
ceded  loss  from  any  one  occurrence  or for any one risk so as not to exceed
$250,000  or  $350,000,  respectively,  or  it  shall  be  so  deemed.

ARTICLE  VI     PREMIUM  AND  COMMISSION

The  Company  will  pay  the  Reinsurer a premium equal to the pro rata share of
premium  applicable  on  all  policies  ceded  and the Reinsurer shall allow the
Company a minimum and provisional ceding commission of 18% on such premium.  The
ceding  commission slides 1 for 1 for each 1.0% decrease in the Loss Ratio below
79%  up  to  a  maximum  ceding  commission  of  31%  at a 66% loss ratio.  This
calculation  shall be from inception to date for all business ceded effective in
all  calendar  quarters  plus  the  in-force  business.

ARTICLE  VII          COMMUTATION

The  Company  may  request  and  the  Reinsurer shall grant a commutation of all
liabilities  to  be effective at the end of any calendar quarter.  The Reinsurer
shall  pay the Company the outstanding case reserves plus an amount for incurred
but  not  reported  losses  as  mutually  agreed.  In the event mutual agreement
cannot be reached, the Reinsurer may appoint an independent actuary to establish
the  incurred but not reported losses. The Company shall notify the Reinsurer of
such request within 60 days of the close of the calendar quarter.  In such event
the  Company  shall pay the positive Funds Withheld Balance to the Reinsurer and
the  Company  shall  release  the  Reinsurer  of  any  and  all  liabilities.

ARTICLE  VIII          DEFINITIONS
-------------          -----------

Funds  Withheld  Balance  shall  mean:

     Previous  Funds  Withheld  Balance,
     plus  97%  of  ceded  written  premium,
     minus  ceding  commission,
     minus  ceded  paid  losses  (including allocated loss adjustment expenses),
     minus  ceded  paid  unallocated  loss  adjustment  expenses, if applicable.


Loss  Ratio shall mean losses paid and outstanding, including IBNR and allocated
loss  adjustment  expenses,  divided  by  earned  premium.

Premium  shall  mean  the  premium charged the insured, net of returned premium,
however,  uncollectable  premium  shall  not  be  deemed  a  return  premium.

Allocated  loss  adjustment  expenses  shall  be  as  defined  under  statutory
accounting  practices.

Unallocated  loss  adjustment  expenses  shall  be  as  defined  under statutory
accounting  practices.

ARTICLE  IX     REPORTS  AND  ACCOUNTING

Within 45 days after the end of each calendar quarter, the Company shall furnish
an  account  statement to the Reinsurer, for their share on the Business Covered
including  the  following:
6.     Written  premiums-credit

7.     Commission-debit

8.     Net  losses  (including  allocated  loss adjustment expenses) paid by the
Company  -  debit

9.     Reserve  for  outstanding  losses  including  incurred  but  not reported
(including  allocated  loss  adjustment  expenses).

10.     Unearned  Premium.

In  the  event the loss ratio is in excess of 85%, the Reinsurer shall be liable
for  unallocated loss adjustment expenses equal to 1% of earned premium for each
Loss  Ratio  point  in  excess  of  85%,  however, not in excess of 6% of earned
premium.  When applicable, the coverage for unallocated loss adjustment expenses
shall  be  included in the maximum limit of 97% of earned premium ceded referred
to  in  QUOTA  SHARE  PARTICIPATION AND LIMIT.  The forgoing shall be a combined
account  for  all  business effective in all calendar quarters plus the in-force
business.  The Company shall report this information separately for all business
effective  in  each  calendar  quarter  plus a report for the in-force business.

The  Company  will pay the Reinsurer 3% of the premium with the balance, if any,
being  held  in  a  Funds  Withheld  Balance  for  subsequent payment of losses,
commission  adjustments  and  return premiums.  Amounts due the Company shall be
withdrawn  from  the Funds Withheld Balance and if the Funds Withheld Balance is
negative,  the  Reinsurer  shall  pay  the  amount  due.

ARTICLE  X          EXCLUSIONS
----------          ----------

This  reinsurance  does  not  apply  to  the  following:

f.     Any  actual  or  alleged  failure,  malfunction  or  inadequacy  of:

3)     Any  of  the  following,  whether  belonging to any insured or to others:
g)     Computer  hardware,  including  microprocessors;
h)     Computer  application  software;
i)     Computer  operating  systems  and  related  software;
j)     Computer  networks;
k)     Microprocessors  (computer  chips)  not  part  of any computer system, or
l)     Any  other  computerized  or  electronic  equipment  or  components;  or
4)     Any  other  products, an any services, data or functions that directly or
indirectly use or rely upon, in any manner, any of the terms listed in paragraph
2.a.  1);
due  to the inability to correctly recognize, process, distinguish, interpret or
accept  the  year  2000  and  beyond.

g.     Any  advice,  consultation, design, evaluation, inspection, installation,
maintenance,  repair, replacement or supervision provided or done by the Company
or  for  the  Company to determine, rectify or test for, any potential or actual
problems  described  in  paragraph  2.a.

h.     Any loss or liability accruing to the Company directly or indirectly from
any  insurance  written by or through any Pool or Association including Pools or
Associations  in  which membership by the Company is required under any statutes
or  regulations(other  than  assigned  risk  automobile  plans).

i.     Business  excluded  by  the attached Nuclear Incident Exclusion Clauses -
Liability  -  Reinsurance.

j.     All liability of the Reassured arising, by contract, operation of law, or
otherwise,  from  its  participation  or  membership,  whether  voluntary  or
involuntary,  in  any  insolvency fund.  "Insolvency fund" includes any guaranty
fund,  insolvency  fund,  plan,  pool,  association,  fund or other arrangement,
howsoever  denominated,  established  or  governed,  which  provides  for  any
assessment  of  or  payment or assumption by the Reassured of part or all of any
claim, debt, charge, fee or other obligation of an insurer, or its successors or
assigns,  which has been declared by any competent authority to be insolvent, or
which  is  otherwise deemed unable to meet any claim, debt, charge, fee or other
obligation  in  whole  or  in  part.


ARTICLE  XI          ACCESS  TO  RECORDS
-----------          -------------------

The  Reinsurer, or its duly authorized representative, shall have free access at
all  reasonable  times during and after the currency of this agreement, to books
and  records maintained by any of the division, department and branch offices of
the Company which are involved in the subject matter of this Agreement and which
pertain  to the reinsurance provided hereunder and all claims made in connection
therewith.  Notwithstanding  the  provisions  of  the  preceding  sentence,  if
undisputed  balances  due  from the Reinsurer under this Agreement have not been
paid for the two most recent reported calendar quarters, the Reinsurer shall not
have  access  to any of the Company's records relating to this Agreement without
the  specific  consent  of  the  Company.

ARTICLE  XII          ARBITRATION
------------          -----------
A.     All  disputes  or  differences  arising out of the interpretation of this
Agreement  shall  be  submitted  to  the  decision of two arbitrators, one to be
chosen  by  each party, and in the event of the arbitrators failing to agree, to
the  decision  of an umpire to be chosen by the arbitrators. The arbitrators and
umpire  shall  be disinterested active or retired executive officials of fire or
casualty  insurance or reinsurance companies or Underwriters at Lloyd's, London.
If  either  of the parties fails to appoint an arbitrator within one month after
being  required  by  the  other party in writing to do so, or if the arbitrators
fail  to appoint an umpire within one month of a request in writing by either of
them  to  do  so,  such  arbitrator  or umpire, as the case may be, shall at the
request  of  either  party be appointed by a Justice of the Supreme Court of the
State  of  New  York.

B.     The  arbitration  proceeding  shall take place in New York, New York. The
applicant  shall  submit  its case within one month after the appointment of the
court of arbitration, and the respondent shall submit its reply within one month
after the receipt of the claim. The arbitrators and umpire are relieved from all
judicial  formality  and  may  abstain  from  following the strict rules of law.
Punitive  damages  shall  not be awarded by the panel against either party which
are  apart  from  the punitive damages that may be in dispute. They shall settle
any dispute under the Agreement according to an equitable rather than a strictly
legal  interpretation  of  its  terms.

C.  Their  written decision shall be provided to both parties and shall be final
and  not  subject  to  appeal.

D.  Each  party  shall bear the expenses of his arbitrator and shall jointly and
equally  share with the other the expenses of the umpire and of the arbitration.

E.  This  Article  shall  survive  the  termination  of  this  Agreement.

ARTICLE  XIII          CONFIDENTIALITY
-------------          ---------------

All  terms  and  conditions  of this Agreement and any materials provided in the
course  of  inspection  shall  be  kept confidential by the Reinsurer as against
third  parties,  unless the disclosure is required pursuant to process of law or
unless the disclosure is to Reinsurer's retrocessionaires, financial auditors or
governing  regulatory  bodies.  Disclosing  or  using  this  information for any
purpose  beyond  the scope of this Agreement, or beyond the exceptions set forth
above,  is  expressly  forbidden  without  the  prior  consent  of  the Company.

ARTICLE  XIV          ERRORS  AND  OMISSIONS
------------          ----------------------

Any  inadvertent  delay, omission or error shall not relieve either party hereto
from any liability which would attach to it hereunder if such delay, omission or
error  had  not  been  made, provided such delay, omission or error is rectified
immediately  upon  discovery.

ARTICLE  XV          FEDERAL  EXCISE  TAX
-----------          --------------------

(Federal  Excise  Tax  applies  only  to  those  Retrocessionaires,  excepting
Underwriters  at  Lloyd's London and other Retrocessionaires exempt from Federal
Excise  Tax,  who  are  domiciled  outside  the  United  States  of  America.)
A.  The  Retrocessionaires  has  agreed  to  allow for the purpose of paying the
Federal  Excise  Tax 1% of the premium payable hereon to the extent such premium
is  subject  to  Federal  Excise  Tax.
B.  In  the  event  of  any  return  of  premium  becoming  due  hereunder  the
Retrocessionaires  will  deduct  1%  from  the  amount  of  the  return  and the
Retrocedent  or  its  agent should take steps to recover the Tax from the United
States  Government.

ARTICLE  XVI          FOLLOW  THE  FORTUNES
------------          ---------------------

C.     The  Reinsurer's  liability  shall attach simultaneously with that of the
Company  and  shall  be  subject  in  all  respects  to  the  same risks, terms,
conditions,  interpretations, waivers, and to the same modification, alterations
and cancellations as the respective insurances (or reinsurances) of the Company,
the  true intent of this Agreement being that the Reinsurer shall, in every case
to  which  this  Agreement  applies,  follow  the  underwriting  fortunes of the
Company.

D.     Nothing  shall  in  any  manner  create  any obligations or establish any
rights  against  the  Reinsurer in favor of any third parties or any persons not
parties  to  this  Agreement.

ARTICLE  XVII          GOVERNING  LAW
-------------          --------------

This Agreement shall be governed by and construed in accordance with the laws of
the  state  of  New  York.

ARTICLE  XVIII          INSOLVENCY
--------------          ----------

E.     In  the  event  of  insolvency  and  the  appointment  of  conservator,
liquidator,  or  statutory  successor  of the ceding company, the portion of any
risk or obligation assumed by the reinsurer shall be payable to the conservator,
liquidator, or statutory successor of the company having authority to allow such
claims:  without  diminution  because  of  that  insolvency,  or  because  the
conservator,  liquidator,  or  statutory  successor  has  failed to pay all or a
portion  of  any  claims.  Payments  directly  to  the  ceding insurer or to its
conservator,  liquidator,  or  statutory successor, except where the contract of
insurance or reinsurance specifically provides another payee of such reinsurance
in  the event of the insolvency of the ceding insurer.  The reinsurance contract
may  provide that the conservator, liqudator, or statutory successor of a ceding
insurer  shall give written notice of the pendency of a claim against the ceding
insurer  indicating the policy or bond reinsured, within a reasonable time after
such claims is filed and the reinsurer may interpose, at its own expense, in the
proceeding  where  such  claims  is  to be adjusticated, any defense or defenses
which  it  amy  deem  available  to  the  ceding  insurere  or  its conservator,
liquidator,  or statutory successor.  The expense thus incurred by the reinsurer
shall  be  payable  subject to court approval out of the estate of the insolvent
ceding  insurer  as  part  of  the expense of conservation or liquidation to the
extent  of  a  proportionate share of the benefit which may accrue to the ceding
insurer  in  conversation  or  liquidation,  solely  as  result  of  the defense
undertaken  by  the  reinsurer.  It  is  agreed,  however,  that the liquidator,
receiver,  conservator  or statutory successor of the Company shall give written
notice  to  the  Reinsurers of the pendency of a claim against the Company which
would involve a possible liability on the part of the Reinsurers, indicating the
policy  or bond reinsured, within a reasonable time after such claim is filed in
the conservation or liquidation proceeding or in the receivership. It is further
agreed  that  during  the  pendency of such claim the Reinsurers may investigate
such  claim  and  interpose,  at their own expense, in the proceeding where such
claim is to be adjudicated, any defense or defenses that they may deem available
to the Company or its liquidator, receiver, conservator, or statutory successor.
The  expense thus incurred by the Reinsurers shall be chargeable, subject to the
approval  of  the  Court,  against  the  Company  as  part  of  the  expense  of
conservation  or  liquidation  to  the extent of a pro rata share of the benefit
which  may accrue to the Company solely as a result of the defense undertaken by
the  Reinsurers.

F.     Where  two  or  more  Reinsurers  are  involved  in  the same claim and a
majority in interest elect to interpose defense to such claim, the expense shall
be  apportioned  in  accordance  with  the terms of the Agreement as though such
expense  had  been  incurred  by  the  Company.

G.     The  reinsurance  shall be payable by the Reinsurers to the Company or to
its  liquidator,  receiver,  conservator,  or  statutory  successor,  except  as
provided  by  Section 4118(a) (1) (A) and 1114 (c) of the New York Insurance Law
or  except  (a)  where the Agreement specifically provides another payee of such
reinsurance  in  the  event  of the insolvency of the Company, and (b) where the
Reinsurers  with  the consent of the direct insured or insureds have voluntarily
assumed  such  policy  obligations  of  the Company as direct obligations of the
Reinsurers  to  the  payees  under  such  policies  and  in substitution for the
obligations  of  the  Company  to  the payees. Then, and in that event only, the
Company,  with  the  prior approval of the certificate of assumption on New York
risks  by  the Superintendent of Insurance of the State of New York, is entirely
released  from its obligation and the Reinsurers pay any loss directly to payees
under  such  policy.

H.     Notwithstanding  clauses  A,  B,  and  C, where the Company is authorized
under  the  Insurance  Companies  Act (Canada) to insure in Canada risks, in the
event  of  the  insolvency of the Company, reinsurance payable in respect of the
insurance  business in Canada of the Company shall be payable to the Chief Agent
in  Canada  of  the  Company  or  to  the  liquidator,  receiver, conservator or
statutory  successor appointed in Canada in respect of the insurance business in
Canada  of  the  Company  without  diminution  because  of the insolvency of the
Company  or  because  the  Company  or  a  liquidator,  receiver, conservator or
statutory  successor  of the Company has failed to pay all or any portion of any
claim.  All  other  terms and conditions of clauses A, B, and C remain in effect
and  apply  to  this  clause  D  which  shall  prevail if there is a conflict or
inconsistency.

ARTICLE  XIX               OFFSET
------------               ------

Each  party  hereto  shall  have,  and may exercise at any time and from time to
time, the right to offset any undisputed balance or balances, whether on account
of  premiums  or  on account of losses, due from such party to the other (or, if
more  than  one, any other) party hereto under this Agreement or under any other
reinsurance  agreement heretofore or hereafter entered into by and between them,
and  may  offset  the same against any undisputed balance or balances due to the
former from the latter under the same or any other reinsurance agreement between
them,  and  the  party asserting the right of offset shall have and may exercise
such right whether the undisputed balance or balances due to such party from the
other  are  on account of premiums or on account of losses and regardless of the
capacity,  whether as assuming insurer or as ceding insurer, in which each party
acted  under  the  agreement  or,  if  more  than  one, the different agreements
involved.

Where  the  Company  is authorized under the Insurance Companies Act (Canada) to
insure in Canada risks, for the purpose of this Article, the branch of a Company
in  Canada shall be considered as a party separate and distinct from the Company
and  the  right  of  offset  provided for in this Article shall belong to and be
applied  against  that  branch  as though it were a separate and distinct party.


ARTICLE  XX               SEVERABILITY
-----------               ------------

If any provision of this Agreement shall be rendered illegal or unenforceable by
the  laws,  regulations  or  public policy of any state, such provision shall be
considered  void  in  such  state,  but  this  shall  not affect the validity or
enforceability of any other provision of this Agreement or the enforceability of
such  provision  in  any  other  jurisdiction.


ARTICLE  XXI     SPECIAL  TERMINATION  OR  SETTLEMENT
------------     ------------------------------------

SECTION  I  (TERMINATION)
-------------------------
A.  Either  party  may  terminate  this Agreement immediately in the event that:
3.     The  other  party  should  at  any  time  become insolvent, or suffer any
impairment  of contributed capital, or file a petition in bankruptcy, or go into
liquidation,  rehabilitation,  or  voluntary  supervision,  or  have  a receiver
appointed,  or  be  acquired  or  controlled  by  any other insurance company or
organization,  or
4.     There  is a severance of obstruction of free and unfettered communication
and/or  normal commercial and/or financial intercourse between the United States
of  America  and  the  country in which the Reinsurer is incorporated or has its
principal  office as a result of war, currency regulations, or any circumstances
arising  out  of  political,  financial  or  economic  emergency.

B.  Either  party  may  terminate  this Agreement immediately in the event that:
3.     Upon  application  of  the  NAIC  Insurance Regulatory Information System
(IRIS)  tests to the Company's quarterly and annual statement (which the Company
hereby  agrees  to furnish the Reinsurer upon request) it is found that four (4)
or  more  of  the Company's IRIS financial ratio values are outside of the usual
range  established  in  the  IRIS  system.
4.     Upon  review  of  the  Insurance  Solvency International ISI) Performance
Tests  as  published  with  respect  to the Company (or upon application of such
Performance Tests to the Company's annual financial statements which the Company
hereby  agrees  to  furnish to the Reinsurer upon request) it is found that four
(4)  or  more of the Company's ratios are outside of normal range (as defined by
the  ISI  standard).

Termination  under  A. or B. shall be automatic.  The Reinsurer will specify the
mode  of  payment,  i.e.  a  run-off  basis  or a clean-cut basis with portfolio
transfer,  if  applicable.

SECTION  II  (SETTLEMENT)
-------------------------
After  termination  of  this  Agreement under this or any article, including the
natural  expiry of the Agreement, if the Reinsurer has any residual liability to
the  Company,  the Company will, at the request of the Reinsurer, furnish to the
Reinsurer  statements  as  specified  in Section B1., above, and if four or more
values  are outside of the usual range established in the IRIS or ISI system (as
applicable  in  accordance with Section B1., above) the Reinsurer shall have the
option  of  an immediate commutation in accordance with the commutation article.
In addition to the payments specified in that article the Reinsurer shall return
the  unearned premium and the Company will allow a deduction of commission equal
to  the  average  ceding  commission  on  the  ceded  premium.


ARTICLE  XXII          CURRENCY  REVALUATION
-------------          ---------------------

It  is  agreed that underwriting to contractual and/or understanding limits will
be  done  in  terms  of  United  States (U.S.) dollar equivalent on the basis of
exchange  rates in effect at the time of inception of new or renewal business or
at the time an addition to an existing risk takes place. In the event there is a
reduction  in parity value of the U.S. dollar from that existing at the time the
risk  was  written  which results in the contractual and/or understanding limits
being  exceeded,  the  Company  shall be held covered for such excess until next
renewal  of  the  risk,  at  which  time  underwriting  will then conform to the
contractual  and/or  understanding  U.S.  dollar  limits  in effect at the time.



IN  WITNESS  WHEREOF:  the  parties  hereto  have  caused  this  Agreement to be
executed  by  their  authorized  representative.

In:  ___________________  this  ___________  day  of ______________________ 2000

                         PAFCO GENERAL INSURANCE COMPANY


By:  ___________________________  Title:  ______________________________





and  in:  _______________this  ____________ day of ________________________ 2000


            NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.


By:  __________________________  Title:  ________________________________











                                   ADDENDUM I

                                       TO

                   AGGREGATE LOSS RATIO REINSURANCE AGREEMENT

                                     BETWEEN

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA
                      (HEREINAFTER CALLED THE "REINSURER")

                                       AND

                        GRANITE REINSURANCE COMPANY, LTD.
                   (HEREINAFTER CALLED THE "RETROCESSIONAIRE")


It  is  understood  and  agreed  that  addendums  number 1 & 2 to the Underlying
Agreements,  copies  attached  hereto,  are  accepted  as part of the Underlying
Agreements.

All  other  terms  and  conditions  remain  unchanged.

IN  WITNESS  WHEREOF:  the  parties  hereto  have  caused  this  Agreement to be
executed  by  their  Authorized  representatives.


In:______________________________this_____________day  of________________2000

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                    ----------------------------------------
                                 PITTSBURGH, PA



By:_______________________________

Title:______________________________





AND  IN____________________________THIS_____________DAY  OF_________________2000

                    GRANITE  REINSURANCE  COMPANY,  LTD.


By:________________________________

Title:_______________________________




                                 ADDENDUM NO. 2

                                       TO

                        QUOTA SHARE REINSURANCE AGREEMENT
                           EFFECTIVE JANUARY 1ST 2000

                                     BETWEEN

                 SUPERIOR INSURANCE COMPANY AND ITS WHOLLY-OWNED
                             INSURANCE SUBSIDIARIES

                                       AND

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                        (HERAFTER CALLED THE "REINSURER")


It  is  understood  and  agreed  that  effective December 30, 2000 the following
articles  are  amended  to  read  as  follows.

                  ARTICLE II               TERM AND TERMINATION
                  ----------               --------------------

This  Agreement  commences  at 12:01 a.m. Eastern Standard Time, January 1, 2000
and  shall  remain in force until 11:59 p.m. Eastern Standard Time, December 31,
2001.  Either  party  may  terminate  effective on the first day of any calendar
quarter  with 60 days advance written notice.  The Reinsurer shall remain liable
for  loss  under  reinsured  policies  effective  prior to the termination date.

ARTICLE  IV          QUOTA  SHARE  PARTICIPATION  AND  LIMIT
-----------          ---------------------------------------

The  aggregate  quota  share  cession  shall be at the option of the Company and
subject  to  a  maximum of 75%.  However, the maximum cession will be limited to
$70,000,000  for  the  calendar year 2001.  In the event this produces more than
$70,000,000  for  the  calendar  year,  the  dollar  amount of cessions shall be
reduced  to  $70,000,000.  The  quota  share  percent applicable for the Company
shall  be  the ratio of the adjusted dollar cession to the gross subject written
premium  for  the  Company for that year.  This limit can be increased by mutual
agreement  between  the Reinsurer and the Company.  The Company shall notify the
Reinsurer  prior  to  the  last  day  of the calendar quarter of the quota share
percent  for  that  quarter.  It  is agreed that the cession for any one quarter
shall  not  exceed 40% of the total cession for the calendar year.  In the event
the  declared percent cession for a calendar quarter produces premiums in excess
of  40%  of the premium ceded for the calendar year the cession for that quarter
shall be adjusted to the dollar amount that would equal 40% of the premium ceded
for  the  year.

The  Reinsurer's  liability  for  aggregate  losses,  including  allocated  loss
adjustment  expenses  (and unallocated loss adjustment expenses where applicable
under  REPORTS  AND ACOCUNTING), shall be limited to 97% of earned premium ceded
for  all  business from the inception date of this agreement and the calculation
shall  be  from  inception  to  the  calculation  date.


All  other  terms  and  conditions  remain  unchanged.

IN  WITNESS  WHEREOF:  the  parties  hereto  have  caused  this  Agreement to be
executed  by  their  Authorized  representatives.



In:________________________________this_____________day  of ________________2000

               NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA
               -------------------------------------------------------



By:___________________________

Title:__________________________





And in______________________________this _____________day of________________2000

                                   SUPERIOR INSURANCE COMPANY
                                   --------------------------





By:____________________________

Title:___________________________

<PAGE>
                                 ADDENDUM NO. 2

                                       TO

                        QUOTA SHARE REINSURANCE AGREEMENT
                           EFFECTIVE JANUARY 1ST 2000

                                     BETWEEN

                         PAFCO GENERAL INSURANCE COMPANY
                         -------------------------------
                       (HEREINAFTER CALLED THE "COMPANY")

                                       AND

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                      (HEREINAFTER CALLED THE "REINSURER")


It  is  understood  and  agreed  that  effective December 30, 2000 the following
articles  are  amended  to  read  as  follows.

ARTICLE  II               TERM  AND  TERMINATION
-----------               ----------------------

This  Agreement  commences  at 12:01a.m. Eastern Standard Time, January 1, 2000,
and  shall  remain in force until 11:59 p.m. Eastern Standard Time, December 31,
2001.  Either  party  may  terminate  effective on the first day of any calendar
quarter  with 60 days advance written notice.  The Reinsurer shall remain liable
for  loss  under  reinsured  policies  effective  prior to the termination date.

ARTICLE  IV          QUOTA  SHARE  PARTICIPATION  AND  LIMIT
-----------          ---------------------------------------

The  aggregate  quota  share  cession  shall be at the option of the Company and
subject  to  a  maximum of 90%.  However, the maximum cession will be limited to
$30,000,000  for  the  calendar year 2001.  In the event this produces more than
$30,000,000  for  the  calendar  year,  the  dollar  amount of cessions shall be
reduced  to  $30,000,000.  The  quota  share  percent applicable for the Company
shall  be  the ratio of the adjusted dollar cession to the gross subject written
premium  for  the  Company for that year.  This limit can be increased by mutual
agreement  between  the Reinsurer and the Company.  The Company shall notify the
Reinsurer  prior  to  the  last  day  of the calendar quarter of the quota share
percent  for  that  quarter.  It  is agreed that the cession for any one quarter
shall  not  exceed 40% of the total cession for the calendar year.  In the event
the  declared percent cession for a calendar quarter produces premiums in excess
of  40%  of the premium ceded for the calendar year the cession for that quarter
shall be adjusted to the dollar amount that would equal 40% of the premium ceded
for  the  year.

The  Reinsurer's  liability  for  aggregate  losses,  including  allocated  loss
adjustment  expenses  (and unallocated loss adjustment expenses where applicable
under  REPORTS  AND ACOCUNTING), shall be limited to 97% of earned premium ceded
for  all  business from the inception date of this agreement and the calculation
shall  be  from  inception  to  the  calculation  date.


All  other  terms  and  conditions  remain  unchanged.


IN  WITNESS  WHEREOF:  the  parties  hereto  have  caused  this  Agreement to be
executed  by  their  Authorized  representatives.


In:________________________________this_____________day  of ________________2000

     NATIONAL  UNION  FIRE  INSURANCE  COMPANY  OF  PITTSBURGH,  PA



By:___________________________

Title:__________________________






And in______________________________this _____________day of________________2000

               PAFCO  GENERAL  INSURANCE  COMPANY



By:____________________________

Title:___________________________

<PAGE>
                              EMPLOYMENT AGREEMENT


     WHEREAS,  Symons  International  Group,  Inc.("SIG") and Goran Capital Inc.
("Goran")  (collectively,  SIG  and  Goran  are  referred  to  as the "Company")
consider  it  in  SIG's best interests to employ Gregg Albacete ("You", "Your"or
"Executive"),  upon  the  terms  and  conditions  hereinafter  set  forth;  and

     WHEREAS,  the  Executive desires to be employed by SIG,  upon the terms and
conditions  contained  herein.

     NOW,  THEREFORE, in consideration of the covenants and agreements set forth
below,  the  parties  agree  as  follows:

1.     EMPLOYMENT

     1.1     Term  of  Agreement.  SIG  agrees  to  employ  Executive  as  Vice
             -------------------
President  and  Chief  Information  Officer effective as of January 26, 2000 and
continuing  until January 26, 2003 unless such employment is terminated pursuant
to  Section  3  below;  provided, however, that the term of this Agreement shall
                        --------  -------
automatically  be extended without further action of either party for additional
one  (1)  year  periods thereafter unless the Company or Executive gives written
notice  that  it  or  he  does not intend to extend this Agreement (the "Term").

     1.2     Terms  of Employment.  During the Term, You agree to be a full-time
             --------------------
employee  of SIG serving in the position of Vice President and Chief Information
Officer  of  SIG  and  further agree to devote substantially all of Your working
time  and  attention  to  the  business  and  affairs  of SIG and, to the extent
necessary  to  discharge  the  responsibilities associated with Your position as
Vice President and Chief Information Officer of SIG and to use Your best efforts
to  perform  faithfully  and efficiently such responsibilities.  Executive shall
perform  such duties and responsibilities as may be determined from time to time
by  the Chief Executive Officer or Executive Vice President of SIG, which duties
shall  be  consistent  with the position of Vice President and Chief Information
Officer of SIG, which shall grant Executive authority, responsibility, title and
standing  comparable to that of the vice president and chief information officer
of a stock insurance holding company of similar standing.  Your primary place of
work  will  be at the Company's headquarters in Indianapolis, Indiana, but it is
understood and agreed that your duties may require travel.  Nothing herein shall
prohibit  You  from  devoting  Your  time  to  civic and community activities or
managing  personal  investments,  as long as the foregoing do not interfere with
the  performance  of  Your  duties  hereunder.

     1.3     Appointment  and  Responsibility.  The  Board  of  Directors of SIG
             --------------------------------
shall,  following  the  effective  date  of  this  Agreement,  elect and appoint
Executive  as  Vice  President  and  Chief Information Officer.  Consistent with
Section  1.2 of this Agreement, Executive shall be primarily responsible for the
information  systems  of  the  Company.

2.     COMPENSATION,  BENEFITS  AND  PREREQUISITES

     2.1     Salary.  Company  shall  pay Executive a salary, in equal bi-weekly
             ------
installments,  equal  to  an  annualized salary rate of One Hundred Seventy Five
Thousand  Dollars  ($175,000).  Executive's  salary  as payable pursuant to this
Agreement  may  be  increased  from  time  to  time  as  mutually agreed upon by
Executive  and  the  Company.  Notwithstanding  any  other  provision  of  this
Agreement,  Executive's  salary  paid  by  Company  for any year covered by this
Agreement  shall  not  be  less  than  such  salary  paid  to  Executive for the
immediately  preceding  calendar  year.

     2.2     Bonus.  The  Company  and  Executive  understand and agree that the
             -----
Company  expects to achieve significant growth during the term of this Agreement
and  that  Executive will make a material contribution to that growth which will
require  certain  personal  and  familial  sacrifices  on the part of Executive.
Accordingly,  it  is the desire and intention of the Company to reward Executive
for  the attainment of that growth through bonus and other means (including, but
not  limited  to,  stock  options,  stock appreciation rights and other forms of
incentive  compensation).  Therefore,  the Company will pay Executive a lump-sum
bonus  of  up  to  Seventy-Five  Thousand  Dollars  ($75,000) (subject to normal
withholdings)  within  sixty  (60)  business days from receipt by Company of its
consolidated,  annual  audited  financial  statements. Executive's bonus for the
year  ended  December  31, 2000 shall be in an amount not less than Thirty-Seven
Thousand  Five  Hundred  Dollars  ($37,500).  Additional  bonus amounts shall be
subject  to  the  discretion  of  the Chief Executive Officer and Executive Vice
President  of  the  Company.

     2.3     Employee Benefits.  During the term of this Agreement, You shall be
             -----------------
entitled  to  participate  in  all  incentive,  savings,  and  retirement plans,
practices,  policies, and programs available generally to other employees of the
Company.  During the term of this Agreement, You and/or Your family, as the case
may  be,  shall  be eligible for participation in and shall receive all benefits
under  welfare  benefit  plans,  practices,  policies,  and  programs  available
generally  to  other  employees  of  the  Company.

     2.4     Additional  Prerequisites.  During  the  term  of  this  Agreement,
             -------------------------
Company  shall  provide  Executive  with:

     (a)     Not  less  than  four  (4) weeks paid vacation during each calendar
year.

     (b)     An automobile allowance equal to the value of a Suburban, but in no
event  in  excess  of  seven  hundred  fifty  dollars  ($750.00)  per  month.

     2.5     Expenses.  During the period of his employment hereunder, Executive
             --------
shall  be entitled to receive reimbursement from the Company (in accordance with
the  policies  and  procedures  in  effect  for the Company's employees) for all
reasonable  travel, entertainment and other business expenses incurred by him in
connection  with  his  services  hereunder.

     2.6     Hiring  Bonus.  The  Company  will  pay  Executive  Fifty  Thousand
             -------------
Dollars  ($50,000)  upon  commencement  of  employment.  Should  the Executive's
employment  with  the  Company  terminate within the first twelve (12) months of
employment,  including  termination for cause and excluding other termination by
the  Company,  the  Executive shall immediately reimburse the Company the sum of
Four Thousand One Hundred Sixty-Six Dollars ($4,166) for each remaining month of
the  first  twelve  (12)  months  of  employment.

     2.7     Relocation  Expense.
             -------------------


<PAGE>
                                       --
A.               Company will cover the direct costs of moving Executive and his
family  from  Dallas,  Texas  to  Indianapolis, Indiana, including house-hunting
visits to Indianapolis, packing and unpacking of household goods, and insurance.

A.               Company  will  pay  realtor fees of up to seven percent (7%) on
the  sale  of  Executive's  Dallas,  Texas  home.

A.               Company  will  pay  all  closing costs on an Indianapolis home.

A.               Company  will reimburse Executive for temporary living expenses
in Indianapolis and weekly travel to and from Dallas, Texas until the relocation
is  complete.

     2.8     Stock  Options.     Executive  shall  be eligible to participate in
             --------------
the Company's stock option plan and will be granted 10,000 options for shares of
SIG at the market price on the first day of the Term.  Executive's stock options
shall  be  issued  pursuant  to  the Symons International Group, Inc. 1996 Stock
Option  Plan  and  a  Stock Option Agreement with respect thereto which shall be
substantially  in the form of Exhibit A attached hereto.  The options shall vest
and  become  exercisable  by the Executive pro-rata over a three (3) year period
from  the  date  of  grant.

3.     TERMINATION  OF  EXECUTIVE'S  EMPLOYMENT

     3.1     Termination  of  Employment  and  Severance  Pay.  Executive's
             ------------------------------------------------
employment under this Agreement may be terminated by the Company at any time for
any  reason; provided, however, that if Executive's employment is terminated for
             --------  -------
any  reason  other than for cause, he shall receive, as severance pay, an amount
equal to his salary for a period of one (1) year from the date of termination of
employment.  Further, if Executive shall be terminated without cause, receipt of
severance  payments  are conditioned upon execution by Executive and the Company
of  that  mutual  Agreement  of Release and Waiver attached hereto as Exhibit B.

     3.2     Cause.  For  purposes  of  this  Section  3,  "cause"  shall  mean:
             -----

(a)     the Executive being convicted in the United States of America, any State
therein,  or  the  District  of  Columbia,  or in Canada or any Province therein
(each,  a "Relevant Jurisdiction"), of a crime for which the maximum penalty may
include imprisonment for one year or longer (a "felony") or the Executive having
entered  against  him  or  consenting  to any judgment, decree or order (whether
criminal  or otherwise) based upon fraudulent conduct or violation of securities
laws;

(b)     the  Executive's  being  indicted  for,  charged  with  or otherwise the
subject  of any formal proceeding (criminal or otherwise) in connection with any
felony, fraudulent conduct or violation of securities laws, in a case brought by
a  law  enforcement  or securities regulatory official, agency or authority in a
Relevant  Jurisdiction;

(c)     the  Executive  engaging  in  fraud, or engaging in any unlawful conduct
relating  to the Company or its business, in either case as determined under the
laws  of  any  Relevant  Jurisdiction;

(d)     the  Executive  breaching  any  provision  of  this  Agreement;

(e)     gross  negligence  or  willful  misconduct  by  the  Executive  in  the
performance  of  his  duties  hereunder;  or


<PAGE>
                                       --
(f)          failure  of  the  Executive  to follow the written directive of the
Chief Executive Officer of Executive Vice President of the Company such that the
activities  of  the  Executive  are  detrimental  to  the  business  operations.

     3.3     Change  of  Control.  Notwithstanding  any other provisions of this
             -------------------
Agreement,  if  (i) a Change of Control shall occur; and (ii) within twelve (12)
                                                     ---
months  of any such Change of Control, (a) Company (including its successors, if
any)  shall  require Executive to perform his duties and obligations pursuant to
this  Agreement  in a location other than the city of employment of Executive at
the time of such Change of Control, or (b) Company (including its successors, if
any)  shall  materially  change  the  duties,  authority  or responsibilities of
Executive  such  that  the  same  are  materially  inconsistent with the duties,
authority  or  responsibilities  of  Executive  at  the  time  of such Change of
Control,  then  Executive's  employment  under this Agreement shall be deemed to
have  terminated  for  other  than  cause  pursuant  to  Section 3.1 hereof, and
Executive  shall  be entitled to receive salary and benefits as provided in such
Section  3.1.  In addition, Executive's stock options shall vest immediately and
Executive  may  exercise  such  options  within  four  (4)  weeks of the date of
termination  of  employment.  In  the event Executive shall fail to exercise the
options  within  four  (4) weeks of termination of employment, the options shall
expire.

     A  Change of Control shall mean the inability of the Symons family to cause
the  election  of  a  majority of the members of the Board of Directors of Goran
Capital  Inc.,  Symons International Group, Inc. or their respective successors.

     3.4     Disability.  So  long  as  otherwise permitted by law, if Executive
             ----------
has become permanently disabled from performing his duties under this Agreement,
the  Company's  Chairman  of  the  Board, may, in his discretion, determine that
Executive  will  not  return  to  work  and terminate his employment as provided
below.  Upon any such termination for disability, Executive shall be entitled to
such  disability, medical, life insurance, and other benefits as may be provided
generally  for  disabled  employees  of  Company  during  the  period he remains
disabled.  Permanent  disability  shall  be  determined pursuant to the terms of
Executive's  long  term disability insurance policy provided by the Company.  If
Company  elects  to terminate this Agreement based on such permanent disability,
such  termination  shall  be  for  cause.

     3.5     Indemnification.  Executive  shall  be indemnified by Company (and,
             ---------------
where  applicable,  its  subsidiaries)  to  the  maximum  extent  permitted  by
applicable  law for actions undertaken for, or on behalf of, the Company and its
subsidiaries.

4.     NON-COMPETITION,  CONFIDENTIALITY  AND  TRADE  SECRETS

     4.1     Noncompetition.  In  consideration  of  the Company's entering into
             --------------
this  Agreement  and the compensation and benefits to be provided by the Company
to  You  hereunder, and further in consideration of Your exposure to proprietary
information  of  the  Company,  You  agree  as  follows:

(a)     Until  the  date of termination or expiration of  this Agreement for any
reason  (the  "Date  of  Termination")  You  agree not to enter into competitive
endeavors  and not to undertake any commercial activity which is contrary to the
best  interests  of  the  Company  or  its  affiliates,  including,  directly or
indirectly,  becoming  an  employee,  consultant,  owner  (except  for  passive
investments  of  not more than one percent (1%) of the outstanding shares of, or
any  other  equity  interest  in,  any  company  or entity listed or traded on a
national  securities  exchange  or  in  an  over-the-counter securities market),
officer,  agent  or  director  of, or otherwise participating in the management,
operation, control or profits of (a) any firm or person engaged in the operation
of a business engaged in the acquisition of insurance businesses or (b) any firm
or person which either directly competes with a line or lines of business of the
Company  accounting  for five percent (5%) or more of the Company's gross sales,
revenues  or  earnings before taxes or derives five percent (5%) or more of such
firm's or person's gross sales, revenues or earnings before taxes from a line or
lines  of business which directly compete with the Company.  Notwithstanding any
provision  of  this Agreement to the contrary, You agree that Your breach of the
provisions  of  this  Section  4.1(a) shall permit the Company to terminate Your
employment  for  cause.

(b)     If  Your  employment  is  terminated  by  You,  or  by  reason  of  Your
Disability,  by the Company for cause, or pursuant to a notice of non-renewal of
this  Agreement,  then for one (1) year after the Date of Termination, You agree
not  to  become,  directly or indirectly, an employee, consultant, owner (except
for  passive  investments  of  not more than one percent (1%) of the outstanding
shares  of,  or  any  other  equity interest in, any company or entity listed or
traded  on  a  national securities exchange or in an over-the-counter securities
market),  officer,  agent  or  director  of,  or otherwise to participate in the
management,  operation, control or profits of, any firm or person which directly
competes  with  a  business  of  the  Company  which  at the Date of Termination
produced  any  class of products or business accounting for five percent (5%) or
more  of  the  Company's gross sales, revenues or earnings before taxes at which
the  Date  of  Termination  derived  five percent (5%) or more of such firm's or
person's gross sales, revenues or earnings before taxes.  It is expressly agreed
and  understood  that this Section 4.1(b) shall not apply to a public accounting
or  consulting  firm.

(c)     You acknowledge and agree that damages for breach of the covenant not to
compete  in this Section  4.1 will be difficult to determine and will not afford
a  full  and  adequate  remedy,  and  therefore  agree that the Company shall be
entitled to an immediate injunction and restraining order (without the necessity
of  a  bond) to prevent such breach or threatened or continued breach by You and
any persons or entities acting for or with You, without having to prove damages,
and  to  all  costs  and  expenses (if a court or arbitrator determines that the
Executive  has  breached  the  covenant  not  to  compete  in  this Section 4.1,
including  reasonable  attorneys'  fees  and  costs,  in  addition  to any other
remedies  to which the Company may be entitled at law or in equity.  You and the
Company agree that the provisions of this covenant not to compete are reasonable
and  necessary  for the operation of the Company and its subsidiaries.  However,
should any court or arbitrator determine that any provision of this covenant not
to  compete  is  unreasonable,  either  in period of time, geographical area, or
otherwise,  the  parties  agree  that  this  covenant  not  to compete should be
interpreted  and  enforced  to the maximum extent which such court or arbitrator
deems  reasonable.

     4.2       Confidentiality.  You  shall  not knowingly disclose or reveal to
               ---------------
any  unauthorized  person,  during  or after the Term, any trade secret or other
confidential  information (as outlined in the Indiana Uniform Trade Secrets Act)
relating  to  the  Company  or any of its affiliates, or any of their respective
businesses or principals, and You confirm that such information is the exclusive
property  of the Company and its affiliates.  You agree to hold as the Company's
property  all  memoranda,  books, papers, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, whether made by You or otherwise coming into Your possession and, on
termination  of  Your  employment,  or  on demand of the Company at any time, to
deliver  the  same  to  the  Company.

     Any  ideas,  processes,  characters,  productions,  schemes, titles, names,
formats,  policies,  adaptations,  plots,  slogans,  catchwords,  incidents,
treatment,  and  dialogue  which  You may conceive, create, organize, prepare or
produce  during  the  period of Your employment and which ideas, processes, etc.
relate  to  any  of the businesses of the Company, shall be owned by the Company
and  its  affiliates  whether  or  not  You should in fact execute an assignment
thereof to the Company, but You agree to execute any assignment thereof or other
instrument  or  document which may be reasonably necessary to protect and secure
such  rights  to  the  Company.

5.     MISCELLANEOUS

     5.1     Amendment.  This  Agreement  may be amended only in writing, signed
             ---------
by  both  parties.

     5.2     Entire Agreement.  This Agreement contains the entire understanding
             ----------------
of  the parties with regard to all matters contained herein.  There are no other
agreements,  conditions  or  representations,  oral  or  written,  expressed  or
implied,  with  regard  to the employment of Executive or the obligations of the
Company  or  the  Executive.  This  Agreement  supersedes  all  prior employment
contracts  and  non-competition  agreements  between  the  parties.

     5.3     Notices.  Any  notice  required  to  be  given under this Agreement
             -------
shall  be  in writing and shall be delivered either in person or by certified or
registered  mail,  return  receipt  requested.  Any  notice  by  mail  shall  be
addressed  as  follows:

     If  to  the  Company,  to:

     Chief  Executive  Officer
     Symons  International  Group,  Inc.
     4720  Kingsway  Drive
     Indianapolis,  Indiana  46205

     If  to  Executive,  to:

     Gregg  Albacete
     ______________________
     ______________________

or  to  such  other addresses as one party may designate in writing to the other
party  from  time  to  time.

     5.4     Waiver  of  Breach.  Any  waiver by either party of compliance with
             ------------------
any  provision  of  this  Agreement  by  the other party shall not operate or be
construed  as  a  waiver  of  any  other  provision of this Agreement, or of any
subsequent  breach  by  such  party  of  a  provision  of  this  Agreement.

     5.5     Validity.  The  invalidity  or unenforceability of any provision of
             --------
this  Agreement  shall  not  affect  the validity or enforceability of any other
provision  of  this  Agreement,  which  shall  remain  in full force and effect.

     5.6     Governing Law.  This Agreement shall be interpreted and enforced in
             -------------
accordance  with  the  laws  of  the  State of Indiana, without giving effect to
conflict  of  law  principles.


<PAGE>
                                                                              73

     5.7     Headings.  The  headings  of  articles  and  sections  herein  are
             --------
included  solely for convenience and reference and shall not control the meaning
or  interpretation  of  any  of  the  provisions  of  this  Agreement.

     5.8     Counterparts.  This  Agreement  may  be  executed  by either of the
             ------------
parties  in  counterparts,  each of which shall be deemed to be an original, but
all  such  counterparts  shall  constitute  a  single  instrument.

     5.9     Survival.  Company's  obligations under Section 3.1 and Executive's
             --------
obligations under Section 4 shall survive the termination and expiration of this
Agreement  in  accordance  with  the specific provisions of those Paragraphs and
Sections  and this Agreement in its entirety shall be binding upon, and inure to
the  benefit  of,  the  successors  and  assigns  of  the  parties  hereto.

     5.10     Mutuality.  This  Agreement  is mutually binding on Goran and SIG.

     5.11     Miscellaneous.  No  provision  of  this Agreement may be modified,
              -------------
waived  or discharged unless such waiver, modification or discharge is agreed to
in  writing and signed by You and such officer as may be specifically designated
by the Board.  No waiver by either party hereto at any time of any breach by the
other  party  hereto  of, or compliance with, any condition or provision of this
Agreement  to  be  performed  by  such  other  party shall be deemed a waiver of
similar  or  dissimilar  provisions  or  conditions  at the same or at any prior
subsequent  time.

     IN  WITNESS  WHEREOF, the parties have executed this Agreement effective as
of  the  _____  day  of  January,  2000.
                         ("COMPANY")

                         GORAN  CAPITAL  INC.
                         By:__________________________________

                         Title:________________________________


                         SYMONS  INTERNATIONAL  GROUP,  INC.
                         By:__________________________________

                         Title:________________________________

                         GREGG  ALBACETE
                         ("EXECUTIVE")


                         ____________________________

<PAGE>
AMENDMENT  TO PERSONAL EMPLOYMENT AGREEMENT with an effective date of January 1,
1996.


BETWEEN:          GRANITE  REINSURANCE  COMPANY
LTD.;  A  BODY  POLITIC  AND  CORPORATE DULY INCORPORATED, HAVING ITS OFFICES AT
--------------------------------------------------------------------------------
     BISHOP'S  COURT  HILL,  ST.  MICHAEL,
     -------------------------------------
BARBADOS,  WEST  INDIES;
------------------------
                              (hereinafter  referred  to  as  the  "Company")


AND               G.  GORDON  SYMONS,  EXECUTIVE,
     RESIDING  AT  3  QUEEN'S  COVE,  APT.  B6,
FAIRYLANDS,  PEMBROKE,  BERMUDA,  HM  05;
                              (hereinafter  referred  to  as  the  "Executive")


     WHEREAS  the parties hereto are presently governed by a Personal Employment
Agreement  with  an  effective  date of December 31, 1991, and Amendments to the
Personal  Employment  Agreement  dated  October  1,  1992  and  January  1, 1995
(collectively  referred  to  as  the  "Agreements");

     AND  WHEREAS  the parties hereto desire to amend the terms of the Agreement
in  accordance  with  the  provisions  hereof;

     NOW  THEREFORE  be  it  agreed  as  follows:

     2.     REMUNERATION
            ------------
          The  provisions  of  subparagraph  5.1 of the said Personal Employment
     Agreement  shall  be  amended  by  Increasing  the  salary from One Hundred
Thousand  Dollars  ($100,000.00)  per  annum  to  One  Hundred  and  Fifty
Thousand  Dollars  ($150,000.00)  per  annum  payable  in  equal  monthly
installments  not  in  advance.

WHEREOF,  THE  PARTIES  HAVE  SIGNED  HEREIN  BELOW

GRANITE  REINSURANCE  COMPANY  LTD.          EXECUTIVE



Per:  ____________________________________          Per:  ____________________




<PAGE>
ADDENDUM  TO  EMPLOYMENT  AGREEMENT


     This  Addendum  is  entered  into as of the 1st day of January, 1998 by and
between Goran Capital, Inc. ("Goran"), Symons International Group, Inc. ("SIG"),
Granite  Reinsurance  Company  Ltd.  ("Granite  Re")  and  G. Gordon Symons (the
"Chairman")  with  respect  to  the  following:

     A.     The  Chairman is the Chairman of the Board of Directors of Goran and
     SIG  and  the  Chairman  of  the  Board  and  President  of  Granite  Re;

     B.     Granite  Re  and  the  Chairman  have  heretofore  entered into that
certain
     Personal  Employment  Agreement  dated  December  31,  1991  (as  amended
from  time  to  time,  the  "Employment  Agreement")  pursuant  to  which  an
annual  sum  of  One  Hundred  Fifty  Thousand  Dollars  ($150,000)  is  paid by
Granite  Re  to  the  Chairman  (the  "Annual  Sum");

C.     Granite  Re  desires  to ensure that it continues to receive the benefits
          enuring  to  it  pursuant  to  the  terms of the Employment Agreement;

     D.               Goran  desires to ensure that its wholly owned subsidiary,
Granite  Re,
               continues  to  receive the benefits enuring to it pursuant to the
terms  of  the
          Employment  Agreement;  and

E.               The  parties  to  the Employment Agreement desire to amend such
          Employment  Agreement  consistent  with  the  terms  contained  herein
          (including,  but  not  limited  to,  the  provisions of this amendment
dealing
          with  non-competition)  and otherwise ratify and affirm the Employment
     Agreement.


     NOW  THEREFORE,  for  good  and  valuable  consideration,  the  receipt and
sufficiency  of  which  are  hereby acknowledged, Goran, SIG, Granite Re and the
Chairman  agree  as  follows:


1.     Ratification  and  Amendment.   The  parties  to the Employment Agreement
       ----------------------------
hereby  reaffirm  and  modify  the  Employment  Agreement  and hereby ratify all
existing  terms of the Employment Agreement and also amend the provisions of the
Employment  Agreement  to provide that upon the occurrence of a Triggering Event
(as  defined  herein),  the  sum of One Million One Hundred Twenty-Five Thousand
Dollars  ($1,125,000)  (the  "Contract  Payment") shall be paid to the Chairman.



2.     Triggering  Event.   A Triggering Event shall occur upon the happening of
       -----------------
any  of  the  following  events:

a.     Granite  Re  shall  fail  to  pay  the  Granite  Re  Obligation;  or
b.     There  shall  occur  a  "Change of Control" with respect to Goran or SIG.
For purposes of this Addendum, a "Change of Control" shall mean the inability of
the  Symons family to cause the election of a majority of the Board of Directors
of  Goran  or  SIG  or their respective successors.  In the event of a Change of
Control,  Goran  shall  comply  with  the provisions of Sections 1 and 8 hereof.

3.     Payments to Surviving Spouse.   In the event of the death of the Chairman
       ----------------------------
prior  to the satisfaction by Granite Re of the Contract Payment, the Annual Sum
payments  and the Contract Payment shall be made to the Chairman's spouse if she
is  then  surviving,  in  accordance  with  the  terms  of  this  Addendum.

4.     Noncompetition  Agreement.   As  partial  consideration  of  Granite  Re
       -------------------------
entering  into  this  Addendum,  the  Chairman  agrees  as  follows:

a.     The  Chairman,  from  and  after  the  date  of  this Addendum, shall not
compete,  in any manner, with Goran or SIG (including the Affiliates of Goran or
SIG, as such term "Affiliates" is defined for purposes of the Securities laws of
the  United  States.)

5.     Monthly  Installments.   The  Annual  Sum  shall be paid in equal monthly
       ---------------------
installments.

6.     U.S.  Dollars.   The  payment  of  all amounts hereunder shall be made in
       -------------
United  State  dollars.

7.     Liability.   If  a  Triggering  Event  shall  occur,  Goran and SIG shall
       ---------
become  jointly  and  severally  liable  with  Granite Re for all obligations of
Granite  Re  pursuant to the Employment Agreement or this Addendum.  Neither the
Employment  Agreement  nor this Addendum may be amended, canceled, terminated or
otherwise  revised  unless same shall be in writing signed by the parties to the
Employment  Agreement.

8.     Counterparts.   This  Addendum  may  be  executed  in  any  number  of
       ------------
counterparts,  each  of  which shall be an original; but such counterparts shall
       ---
together  constitute  but  one  and  the  same  instrument.

9.     Full  Force  and  Effect.   Except  as  otherwise  provided  herein,  the
       ------------------------
Employment  Agreement  shall  remain  in  full  force  and  effect.


IN  WITNESS  WHEREOF,  the parties have executed this Addendum as of the day and
year  first  set  forth  above.

                    "Chairman"

                    ________________________________________
                    G.  Gordon  Symons


                    "Granite  Re"
                    Granite  Reinsurance  Company  Ltd.

                    By:     ________________________________
                         Colin  James

                    "Goran"
                    Goran  Capital  Inc.

                    By:     _________________________________
                         Alan  G.  Symons,  President  and  Chief
                            Executive  Officer

                    "SIG"
                    Symons  International  Group,  Inc.

                    By:     __________________________________
                         Alan  G.  Symons,  Chief  Executive  Officer



<PAGE>
CONSULTING  AGREEMENT  with  an  effective  date  of  January  1,  1995


BETWEEN:               GRANITE  REINSURANCE  COMPANY  LTD.,  a  body politic and
corporate  duly incorporated, having its office at Bishop's Court Hill, P.O. Box
111,  St.  Michael,  Barbados,  West  Indies.
(hereinafter  referred  to  as  the  "Company")


AND:               GORAN  MANAGEMENT  LTD.,  a  body  politic and corporate duly
incorporated,  with  offices  at  Jardine  House, 33-35 Reid Street, P.O. Box HM
1752,  in  the  City  of  Hamilton,  Bermuda,  HM  GX;
(hereinafter  referred  to  as  the  "Consultant")


     WHEREAS  the Company is actively engaged internationally in the business of
reinsurance  and  anticipates  its  premium  volume  of  business for 1995 to be
Fifteen  Million  Untied  States  Dollars  ($15,000,000)  U.S.);


     WHEREAS  the  Consultant  has  expertise in the field of reinsurance and is
desirous of entering into this Agreement with respect to providing international
consulting  services  on demand to the Company to the extent and as requested by
the  Company;


     WHEREAS the company wishes to engage the services offered by the Consultant
and  the Consultant is willing to enter into an agreement to provide services on
the  terms  and  conditions  described  herein:



     NOW,  THEREFORE,  BE  IT  AGREED  AS  FOLLOWS:



MEMORANDUM  TO  AMEND/REPLACE  THE  FOLLOWING  AGREEMENT:


BETWEEN:               GRANITE  REINSURANCE  COMPANY  LTD.,
(Granite  Re) a body politic and corporate duly incorporated, having its offices
at  Bishop's  Court  Hill,  St.  Michael,  Barbados,  West  Indies;


AND     GORAN  MANAGEMENT  LTD.,  (Goran)  a  body  politic  and  corporate duly
incorporated,  with offices at Milner House, 18 Parliament Street in the City of
Hamilton,  Bermuda,  HM  12;


     AND


BETWEEN     SMART  CONSULTANTS,  INC., (Smart) a body politic and corporate duly
incorporated according to the laws of the State of Nevada, having its registered
office at First Interstate Tower, 3800 Howard Hughes Parkway, Suite 1550, in the
City  of  Las  Vegas,  Nevada,  U.S.A.  89109;


AND     GRANITE  REINSURANCE  COMPANY  LTD.,
     (Granite  Re)  a  body  politic and corporate duly incorporated, having its
offices  at  Bishop's  Court  Hill,  St.  Michael,  Barbados,  West  Indies;


     AND


BETWEEN     SMART  CONSULTANTS,  INC., (Smart) a body politic and corporate duly
incorporated according to the laws of the State of Nevada, having its registered
office at First Interstate Tower, 3800 Howard Hughes Parkway, Suite 1550, in the
City  of  Las  Vegas,  Nevada,  U.S.A.  89109;


AND     SYMONS  INTERNATIONAL  GROUP,  INC.,  (SIG) a body politic and corporate
duly  incorporated  according  to  law  having  its  registered  offices at 4720
Kingsway  Drive  in  the  City of Indianapolis, State of Indiana, U.S.A., 46205;


WHEREAS  the  parties  to  these  Agreements  are  desirous of affective certain
changes  to  these  Agreements  all  to take effect as of January 1, 1998, these
amendments  have  been  agreed  between  the  parties.

Granite  Re/Goran  -  the  provisions  of subparagraph 5 of the above Consulting
Agreement to be amended to Two Hundred and Fifty Thousand dollars ($250,000) per
annum  payable  in  equal  monthly installments, effective from January 1, 1998.

Smart/Granite  Re  Agreement  is  cancelled  effective  December  31,  1997.

Smart/SIG,  Inc.  Agreement  is  cancelled  effective  December  31,  1997.

Nothing  contained herein has any affect on that Employment Agreement between G.
Gordon  Symons  and  Granite  Reinsurance  Company  Ltd.


WHEREOF  THE  PARTIES  HAVE  HERETO  SIGNED


GRANITE  REINSURANCE  COMPANY  LTD.     GORAN  MANAGEMENT  LTD.

______________________________________     ______________________________


SMART  CONSULTANTS,  INC.     SYMONS  INTERNATIONAL  GROUP,  INC.

______________________________________     _____________________________

G.  GORDON  SYMONS

______________________________________








                        ADDENDUM TO CONSULTING AGREEMENT


     This  Addendum  is  entered  into as of the 1st day of January, 1998 by and
between Goran Capital, Inc. ("Goran"), Symons International Group, Inc. ("SIG"),
Granite  Reinsurance  Company Ltd. ("Granite Re"), Goran Management Bermuda Ltd.
("Goran  Bermuda")  and  G.  Gordon  Symons (the "Chairman") with respect to the
following:



<PAGE>
A.     The  Chairman  is the Chairman of the Board of Directors of Goran and SIG
and  the  Chairman  of  the  Board  and  President  of  Granite  Re;

B.     Granite  Re  and  Goran Bermuda have heretofore entered into that certain
Consulting  Agreement  dated  January 1, 1995 (as amended from time to time, the
"Consulting  Agreement")  whereby  an  annual  sum of Two Hundred Fifty Thousand
Dollars  ($250,000)  (the  "Annual Sum") is paid by Granite Re to Goran Bermuda;

C.     Granite  Re desires to ensure that it continues to receive the benefit it
currently  derives  from  the  Consulting  Agreement;

D.     Goran  desires  to  ensure  that its wholly owned subsidiary, Granite Re,
continues  to  receive  the  benefit  it  currently  derives from the Consulting
Agreement;  and

E.     The  parties  to the Consulting Agreement desire to amend such Consulting
Agreement consistent with the terms contained herein (including, but not limited
to,  the provisions of this Addendum dealing with non-competition) and otherwise
ratify  and  affirm  the  Consulting  Agreement.




<PAGE>
     NOW  THEREFORE,  for  good  and  valuable  consideration,  the  receipt and
sufficiency  of  which are hereby acknowledged, Goran, Granite Re, Goran Bermuda
and  the  Chairman  agree  as  follows:

<PAGE>



<PAGE>
1.          Ratification  and  Amendment.  Granite  Re  and Goran Bermuda hereby
            ----------------------------
reaffirm  and  modify  the  Consulting Agreement, and hereby ratify all existing
terms  of  the  Consulting  Agreement  and  also  amend  the  provisions  of the
Consulting  Agreement to provide that, upon the occurrence of a Triggering Event
(as  defined herein), the sum of One Million Eight Hundred Seventy-Five Thousand
Dollars  ($1,875,000)  (the  "Contract Payment") shall be paid to Goran Bermuda.




2.     Triggering  Event.  A  Triggering Event shall occur upon the happening of
       -----------------
any  of  the  following  events:

a.     Granite  Re  shall  fail  to  pay  the  Annual  Sum;  or
b.     There  shall  occur  a  "Change of Control" with respect to Goran or SIG.
For purposes of this Addendum, a "Change of Control" shall mean the inability of
the  Symons family to cause the election of a majority of the Board of Directors
of  Goran  or  SIG  or their respective successors.  In the event of a Change of
Control,  Goran  shall  comply  with  the provisions of Sections 1 and 8 hereof.

3.     Payments  to Surviving Spouse.  In the event of the death of the Chairman
       -----------------------------
prior  to the satisfaction by Granite Re of the Contract Payment, the Annual Sum
payments  and the Contract Payment shall be made to the Chairman's spouse if she
is  then  surviving,  in  accordance  with  the  terms  of  this  Addendum.

4.     Noncompetition  Agreement.  As  consideration of Granite Re entering into
       -------------------------
this  Addendum,  Goran  Bermuda  agrees  as  follows:

     a.     Goran  Bermuda,  from and after the date of this Addendum, shall not
compete,  in any manner, with Goran or SIG (including the Affiliates of Goran or
SIG, as such term "Affiliates" is defined for purposes of the Securities Laws of
the  United  States.)

5.     Monthly  Installments.  The  Annual  Sum  shall  be paid in equal monthly
       ---------------------
installments.

6.     Counterparts.  This  Addendum  may  be  executed  in  any  number  of
       ------------
counterparts,  each  of  which shall be an original; but such counterparts shall
       ----
together  constitute  but  one  and  the  same  instrument.

7.     U.S.  Dollars.  The  payment  of  all  amounts hereunder shall be made in
       -------------
United  States  dollars.

8.     Liability.  If a Triggering Event shall occur, Goran and SIG shall become
       ---------
jointly and severally liable with Granite Re for all obligations pursuant to the
Consulting  Agreement  or  this  Addendum.  Neither the Consulting Agreement nor
this  Addendum  may be amended, canceled, terminated or otherwise revised unless
same  shall  be  in  writing  signed by the parties to the Consulting Agreement.

9.     Full  Force  and  Effect.  Except  as  otherwise  provided  herein,  the
       ------------------------
Consulting  Agreement  shall  remain  in  full  force  and  effect.
       -




     IN  WITNESS  WHEREOF, the parties have executed this Addendum as of the day
and  year  first  set  forth  above.

                              "Chairman"


                              ________________________________________
                                               G. Gordon Symons
                                               ----------------


     "Granite  Re"
                              Granite  Reinsurance  Company  Ltd.


                              By:     ___________________________________
                                   Colin  James


                              "Goran  Bermuda"
                              Goran  Management  Bermuda  Ltd.


                              By:    ___________________________________
                                   G.  Gordon  Symons


                              "Goran"
                              Goran  Capital  Inc.


                              By:     ___________________________________
                                   Alan  G.  Symons,  President  and  Chief
                                     Executive  Officer


                              "SIG"
                              Symons  International  Group,  Inc.


                              By:     ___________________________________
                                   Alan  G.  Symons,  Chief  Executive  Officer



<PAGE>
                                                                  EXECUTION COPY
                                                                  EXECUTION COPY

                                         CONSULTING AND NONCOMPETITION AGREEMENT

This Consulting and Noncompetition Agreement ("Agreement") is made as of May 23,
2001  by  and between Goran Capital Inc., a Canadian corporation, for itself and
on  behalf  of all of its affiliates except Symons International Group, Inc., an
Indiana  corporation  ("SIG")  (collectively,  "Goran") and Acceptance Insurance
Companies  Inc.,  a Delaware corporation, for itself and on behalf of all of its
affiliates and assignees (collectively, "Purchaser").  Capitalized terms used in
this Agreement and not otherwise defined herein shall have the meanings ascribed
to  them  in the Asset Purchase Agreement (the "Asset Purchase Agreement") dated
as  of  May  23,  2001  by  and among Goran, SIG, IGF Holdings, Inc., an Indiana
corporation  ("IGFH"),  IGF  Insurance Company, an Indiana insurance corporation
("IGF"),  Acceptance  and  others.
WHEREAS, pursuant to the Asset Purchase Agreement the Sellers sold and Purchaser
purchased  certain  assets  associated  with  the  Business;
WHEREAS, Goran is highly knowledgeable regarding the Business, has been involved
in  the  direction  and  conduct of the Business for more than five years and is
also  highly  knowledgeable  regarding  the  Business  of  Sellers  as generally
conducted by them throughout the 2001 MPCI Crop Year and the 2001 Crop Hail Year
(the  "Sellers  Business");
WHEREAS,  Purchaser  desires  to  induce  Goran  to  provide  Purchaser  certain
consulting  services  between  the Closing and the third anniversary date of the
Closing;
WHEREAS,  Purchaser desires to induce Goran not to engage in the Business in any
form  prior  to  the  third  anniversary  date  of  the  Closing;  and
WHEREAS,  Goran  and  Purchaser  jointly  desire  that  Goran receive reasonable
compensation  (i) for its provision of consulting services to Purchaser and (ii)
for  agreeing  not  to  engage  in  the  Business in any form prior to the third
anniversary  date  of  the  Closing.
NOW,  THEREFORE,  Goran  and  Purchaser  hereby  agree  as  follows:
     1.     Confidential  Information.
(a)     Goran  acknowledges  that:
(i)     The Business is a specialized form of insurance in a national market not
capable  of  geographic  description  or  limitation;  and
(ii)     Because  of  the  nature  of  Goran's  knowledge,  experience  and
relationships  with  respect  to  the  Business,  Goran has and will continue to
receive,  conceive,  originate,  discover  or  develop, information and data not
generally  known  in  the insurance industry and not freely available to persons
who  are  not  providing  services  to  Sellers,  regarding  Sellers'  agents,
reinsurers,  underwriting  practices  and experience, business operations, legal
and  regulatory affairs, business opportunities, procedures, policies, products,
services,  customer  lists,  financial data, pricing, trade secrets, management,
market  research  and  forecasts,  product  development,  marketing strategy and
activities  and  other  operations,  plans  and  perspectives  of  Sellers
(collectively,  "Confidential  Information").  All such Confidential Information
pertaining  to the Business which is received, conceived, originated, discovered
or  developed  at  and  before Closing shall be deemed "Proprietary Confidential
Information"  for purposes of this Agreement.  All such Confidential Information
other  than  Proprietary  Confidential  Information regardless of when received,
conceived,  originated,  discovered or developed shall be deemed "Nonproprietary
Confidential  Information"  for  purposes  of  this  Agreement.
(b)     Goran  agrees  that it will not use or disclose Proprietary Confidential
Information  at  any  time  during or after termination of this    Agreement and
that it shall not use or disclose Nonproprietary Confidential Information at any
time  during  the  term  of  this  Agreement.
     2.     Noncompetition.
(a)     From  the Closing until the third anniversary date of the Closing, Goran
will  not  directly  or  indirectly:
(i)     solicit,  divert or interfere with any business, financial, insurance or
other  relationships  which  Sellers had, with respect to the Business, prior to
Closing with any customer, agent, employee, vendor or reinsurer of Sellers prior
to  Closing,  and  which  relationship  Purchaser  has  not  terminated;  or
(ii)     induce  or  attempt  to induce any customer, agent, employee, vendor or
reinsurer of Sellers, with respect to the Business immediately prior to Closing,
to  terminate,  reduce  or  alter  their  relationship with Purchaser in any way
detrimental  to  Purchaser;  or
(iii)     compete  with  Purchaser  as  an  employer,  agent,  owner,  resource,
consultant  or  advisor  to  any  entity  providing products, services or advice
directly  related  to  any  agricultural production risk or otherwise conducting
Business.
(b)     Notwithstanding  any  other  provision  of  this  Agreement or any other
contract,  agreement  or  understanding  of  any  kind  whatsoever,  Goran shall
automatically and immediately forfeit all consideration paid or to be paid to it
by  Purchaser under this Agreement if it enters into any business, employment or
other  arrangement  or  activity  that is detrimentally competitive the Business
purchased by Purchaser pursuant to the Asset Purchase Agreement, or injurious to
the  financial  interests of the Business purchased by Purchaser pursuant to the
Asset Purchase Agreement, at any time prior to the third anniversary date of the
Closing.
     3.     Consulting  Services.  Goran  hereby  agrees  to  be  available  to
            --------------------
Purchaser as reasonably requested by Purchaser, but in no event for more than 20
hours  in  any  given  calendar  month, for the provision of consulting services
related  to  the operation of the Business commencing on the date of the Closing
and  continuing until the third anniversary date of the Closing (the "Consulting
Term").
4.     Additional  Payment.  For  and  in  consideration  of  Goran's execution,
       -------------------
delivery  and  performance  of this Agreement and subject to Paragraph 2 of this
Agreement,  Purchaser  will pay Goran Four Million Five Hundred Thousand Dollars
($4,500,000)  at  Closing.
5.     Assignment  and Binding Effect.  Goran may not transfer in any manner any
       ------------------------------
right  to receive any portion of the consideration stated in Paragraph 4 of this
Agreement ("Consideration").  Goran hereby consents to Purchaser's assignment of
all  of  Purchaser's  rights  and  obligations  under  this  Agreement to any of
Purchaser's  affiliates  or  successors.  This  Agreement  shall  be  and remain
binding  upon Goran and shall inure to the benefit of any successors in interest
and  assigns  of  Purchaser.
6.     Remedies.  Goran  and  Purchaser  agree  the  restrictions  contained  in
       --------
paragraphs  1 and 2 under this Agreement are necessary for the protection of the
legitimate  business  interests  and  goodwill  of  the  Business  purchased  by
Purchaser  pursuant  to  the  Asset Purchase Agreement, and Goran considers such
restrictions  to  be reasonable for such purposes.  Goran agrees that any breach
of  paragraph  1  or  2 will cause Purchaser substantial and irrevocable damage.
In  the  event  of any such breach, in addition to such other remedies as may be
available,  including the recovery of damages, Purchaser shall have the right to
injunctive  relief  to restrain or enjoin any actual or threatened breach of the
provisions  of  paragraphs  1  and  2.  If  Purchaser  shall  prevail in a legal
proceeding  to remedy a breach or threatened breach of this Agreement, Purchaser
shall  be  entitled  to recover reasonable attorneys' fees and costs incurred in
connection  with  such  proceeding,  in  addition  to any other relief it may be
granted.  No remedy conferred upon any party by this Agreement is intended to be
exclusive  of  any  other  remedy,  and  each  and  every  such  remedy shall be
cumulative  and in addition to any other remedy given hereunder.  The failure to
enforce  any  of  the  provisions  of this Agreement shall not be construed as a
waiver  of  such provisions.  A waiver or failure to enforce by Purchaser on any
one  occasion is effective only in that instance, and will not be construed as a
bar  to,  or  waiver  of,  any  right  on  any  other  occasion.
7.     Applicable  Law.  This  Agreement,  or  any  portion  thereof,  shall  be
       ---------------
interpreted  in  accordance  with the laws of the State of Iowa, irrespective of
the  fact  that  Goran  now  is  or may become organized in a different state or
country.
8.     Severability.  If  any  provision(s)  of  this  Agreement  shall  be held
       ------------
invalid  or  unenforceable,  the  validity  and  enforceability  of  all  other
provisions  of  this  Agreement  shall  not  be  affected  thereby.
9.     Entire  Agreement.  This  Agreement  supersedes  all prior agreements and
       -----------------
understandings between Goran and Purchaser concerning the subject matter hereof.
When  this  Agreement becomes effective it shall contain the entire agreement of
Purchaser  and  Goran  relating  to the subject matter hereof, and Purchaser and
Goran  will  have  made no agreements, representations or warranties relating to
the  subject  matter  of  this  Agreement  that  are  not  set  forth  herein.
10.     Effectiveness  and  Termination.  This Agreement is conditioned upon and
        -------------------------------
effective at Closing.  If the Asset Purchase Agreement is terminated pursuant to
its  terms  and conditions, this Agreement shall terminate concurrently with the
Asset  Purchase  Agreement.

<PAGE>
Dated  this  23rd  day  of  May,  2001.


          GORAN  CAPITAL  INC.


          By:
          Name:
          Title:

          ACCEPTANCE  INSURANCE  COMPANIES  INC.


          By:
          Name:  John  E.  Martin
               ------------------
          Title:  President  and  Chief  Executive  Officer
                -------------------------------------------


<PAGE>
                       GRANITE REINSURANCE COMPANY LIMITED
                  /ACCEPTANCE CROP HAIL RETROCESSION AGREEMENT


THIS  RETROCESSION AGREEMENT ("Crop Hail Agreement") is made and entered into as
of May 23, 2001 by and between Acceptance Insurance Company, a Nebraska domestic
insurance  company  ("Acceptance")  and  Granite  Reinsurance Company Limited, a
Barbados  insurance  company  ("Granite").
                              W I T N E S S E T H :
WHEREAS,  affiliates  of Acceptance and others have entered into a certain Asset
Purchase  Agreement  (the  "Asset Purchase Agreement") dated as of May 23, 2001;
and
WHEREAS, in conjunction with the Asset Purchase Agreement, Acceptance and others
entered  into  a  certain  IGF/Acceptance  Retrocession  Agreement  and  an
IGF/Acceptance  Quota Share Reinsurance Agreement, both dated as of May 23, 2001
and  attached  hereto  ("Acceptance's  Assumption  Agreements");  and
WHEREAS,  subject  to  the  terms  and  conditions  set  forth in this Crop Hail
Agreement,  Acceptance  desires  to  cede  to Granite and desires to accept from
Acceptance  and  to  reinsure  100%  of  all risks reinsured by Acceptance under
Acceptance's  Assumption  Agreements  except MPCI risks reinsured by the Federal
Crop  Insurance  Corporation  and  located  within the United States ("Reinsured
Contracts").
NOW,  THEREFORE, in consideration of the premises and the mutual promises of the
parties  hereto,  they  hereby  covenant  and  agree  as  follows:
                                    ARTICLE I

                                 EFFECTIVE TIME
This  Crop  Hail  Agreement shall be effective as of 12:01 a.m. Eastern Standard
Time  ("Effective  Time")  on  the  date  of the Closing as defined in the Asset
Purchase  Agreement.  If  the Asset Purchase Agreement is terminated pursuant to
its  terms  and  conditions,  this  Retrocession  Agreement  shall  terminate
concurrently  with  the  Asset  Purchase Agreement and never shall be effective.
                                   ARTICLE II

                REINSURED OBLIGATIONS; REPRESENTATIONS OF PARTIES
SECTION  2.01.  DESCRIPTION OF REINSURED OBLIGATIONS.  Subject to the provisions
of  this  Crop  Hail Agreement, Acceptance hereby assigns, transfers, sets over,
cedes  and  reinsures  to  Granite, and Granite hereby reinsures on a 100% quota
share  basis  from  Acceptance,  all  liabilities  and  obligations  for  losses
associated  with  the  Reinsured  Obligations.
SECTION  2.02.  REPRESENTATIONS.  Granite  represents,  to  the  best  of  its
knowledge  and  belief,  that  as  of  the  Effective  Time:
(a)     Granite  is  a  corporation  duly organized and validly existing in good
standing  under  the  laws  of  Barbados.  Granite  has  the corporate power and
authority to carry on their business substantially as it is now being conducted.
     (b)     Granite  has  the  requisite corporate power and authority to take,
and  has  taken, all corporate action necessary to execute and deliver this Crop
Hail  Agreement,  and  to consummate the transactions contemplated hereby.  This
Crop Hail Agreement has been validly executed and delivered by Granite, and is a
valid  and binding agreement, enforceable against Granite in accordance with its
terms.
SECTION  2.03.  REPRESENTATIONS.  Acceptance  represents,  to  the  best  of its
knowledge  and  belief,  that  as  of  the  Effective  Time:
(a)     Acceptance  is a corporation duly organized and validly existing in good
standing under the laws of the State of Nebraska and is an authorized insurer in
Nebraska  and  has  the  corporate  power and authority to carry on its business
substantially  as  it  is  now  being  conducted.
(b)     Acceptance has the requisite corporate power and authority and has taken
all  corporate  action  necessary  to  execute and deliver this Agreement and to
consummate  the  transactions  contemplated  hereby.  This  Agreement  has  been
validly  executed  and  delivered  and  is  a  valid  and  binding  agreement of
Acceptance,  enforceable  against  Acceptance  in  accordance  with  its  terms.
SECTION  2.04.  QUOTA  SHARE  BASIS.  The parties acknowledge and agree that the
reinsurance  provided  herein is on a 100% quota share basis.  Granite agrees to
assume  all  obligations  and  liabilities  of  Acceptance  under  the Reinsured
Contracts,  subject,  however,  to  the  same  rights,  offsets,  counterclaims,
cross-actions  and  defenses that are or may be possessed by the parties.  It is
expressly  understood  that  no  such  offsets,  counterclaims, cross-actions or
defenses  are  or shall be waived, but that the same are expressly preserved and
that  the parties shall be duly subrogated thereto, whether the same be known to
exist  or  are  hereafter  discovered.
                                   ARTICLE III

                                   INSOLVENCY
SECTION  3.01.  INSOLVENCY.
(a)     In  the  event  of  the  insolvency of Acceptance, it is agreed that the
liquidator,  receiver,  conservator  or  statutory successor of Acceptance shall
give  written  notice  to  Granite of the pendency of a claim against Acceptance
indicating  the  policy reinsured which claim would involve a possible liability
on the part of Granite within a reasonable time after such claim is filed in the
conservation  or  liquidation proceeding or in the receivership, and that during
the pendency of such claim, Granite may investigate such claim and interpose, at
its  own  expense,  in the proceeding where such claim is to be adjudicated, any
defense  or defenses that it may deem available to Acceptance or its liquidator,
receiver,  conservator  or  statutory  successor.  The  expense thus incurred by
Granite  shall  be  chargeable,  subject  to  the approval of the Court, against
Acceptance  as  part of the expense of conservation or liquidation to the extent
of  a  pro  rata share of the benefit which may accrue to Acceptance solely as a
result  of  the  defense  undertaken  by  Granite.
(b)     It is further understood and agreed that, in the event of the insolvency
of Acceptance, the reinsurance under this Agreement shall be payable directly by
Granite  to  Acceptance  or  to its liquidator, receiver or statutory successor,
except  (1)  where  this  Agreement  specifically provides another payee of such
reinsurance  in  the  event of the insolvency of Acceptance or (2) where Granite
with  the  consent  of  the  direct  insured or insureds has assumed such policy
obligations  of  Acceptance as direct obligations of Granite to the payees under
such  policies  and  in  substitution  for the obligations of Acceptance to such
payees.
                                   ARTICLE IV
     CONSIDERATION  FOR  RETROCESSION  CONTRACTS
SECTION  4.01.  CONSIDERATION.  For  and  in consideration for this Retrocession
Agreement  Acceptance  will  remit  to  Granite  all  gross written premium with
respect  to  the  Reinsured  Contracts, and Acceptance shall be deemed to have a
fiduciary  responsibility  to Granite with respect to all such premium.  Written
premium  with  respect  to the Reinsured Contracts paid to Acceptance before the
Effective  Time  will  be  remitted  to Granite on the date of the Closing.  All
gross  written  premiums  with  respect  to  the  Reinsured  Contracts  paid  to
Acceptance  after  Closing  will be remitted to Granite not less often than once
each  month.
SECTION 4.02.  COMMISSION AND TAXES.  Acceptance's Assumption Agreements contain
clauses  that  recover  for companies ceding to Acceptance under such agreements
all  commissions due independent agents, premium tax paid or due and payable and
all amounts due for bureau, boards and fees to associations.  To the same extent
that  these amounts are deducted or paid then the net premium payable under this
Crop  Hail  Agreement  will  be  reduced  accordingly.
SECTION  4.03.  LOSS  ADJUSTMENT  AND  CLAIMS SETTLEMENT COSTS.  Acceptance will
manage  and  administrate  the  claims handling on behalf of companies ceding to
Acceptance  under  Acceptance's  Assumption  Agreements.  The  cost  associated
thereto  as  per the Management and Service Agreement entered into as of May 23,
2001  by  and  between  Acceptance  and  IGF  Insurance  Company.
                                    ARTICLE V

                                    LIABILITY
SECTION  5.01.  PAYMENT  OF  CLAIMS  AND BENEFITS.  From and after the Effective
Time,  Granite  shall  be  responsible  for  (a) paying all losses due under the
Reinsured  Contracts  in  accordance  with  the terms of thereof; (b) paying all
premium refunds with respect to premiums received under the Reinsured Contracts;
and  (c)  paying all expenses in connection with the investigations, adjustment,
appraisal  or settlement of all claims under the Reinsured Contracts on or after
the  Effective  Time.
SECTION  5.02.  ACTIONS  ON OR AFTER EFFECTIVE TIME.  If any legal or regulatory
actions  are  threatened  or  filed  in  connection  with  any  of the Reinsured
Contracts  on  or  after  the  Effective Time, the parties agree to provide each
other  with  prompt  notice  thereof, within such time period as would allow the
appropriate  party  the  opportunity  to  answer,  appear  or to take any action
necessary  or  to avoid a default judgment.  The parties agree to cooperate with
each  other  with  respect  to  any  such  legal  or regulatory actions, whether
threatened  or  actual.
SECTION  5.03.  TAXES.  Acceptance  shall retain full responsibility for any tax
liability  relating  to  the  Reinsured  Contracts  for  all  taxable periods or
portions  thereof.
                                   ARTICLE VI

                              ERRORS AND OVERSIGHTS
     Each  party  to  this  Retrocession Agreement will act reasonably to comply
with  its  terms.  Clerical  errors  and  oversights occasioned in good faith in
carrying  out  this  Retrocession  Agreement will not prejudice either party and
will  be  rectified  promptly  on  an  equitable  basis.
                                   ARTICLE VII

                                   ARBITRATION
SECTION  7.1  COMPULSORY  ARBITRATION.
(a)     The parties intend this article to be enforceable in accordance with the
Federal  Arbitration Act (9 U.S.C. Section 1, et seq.), including any amendments
to  that Act which are subsequently adopted, notwithstanding any other choice of
law  provision  set  forth  in  this  Agreement.  In the event that either party
refuses to submit to arbitration as required herein, the other party may request
a  United States Federal District Court to compel arbitration in accordance with
the  Federal  Arbitration Act.  Both parties consent to the jurisdiction of such
court  to enforce this article and to confirm and enforce the performance of any
award  of  the  arbitrators.
(b)     Any  dispute  or other matter in question between Granite and Acceptance
arising  out  of  or  relating to the formation, interpretation, performance, or
breach  of  this  Agreement,  whether  such  dispute  arises  before  or  after
termination  of  this Agreement, shall be resolved by arbitration if the parties
are  unable  to  resolve  the dispute through negotiation.  Arbitration shall be
initiated  by  the  delivery of a written demand for arbitration by one party to
the  other.
     SECTION  7.2.  PROCEDURE.
(a)     Each  party  shall  appoint  an  individual as arbitrator and the two so
appointed  shall then appoint an umpire.  If either party refuses or neglects to
appoint  an arbitrator within forty-five (45) days after the initial delivery of
the  demand  for arbitration, the other party may appoint the second arbitrator.
If  the two arbitrators do not agree on an umpire within forty-five (45) days of
their  appointment,  the  parties  shall  petition  the  American  Arbitration
Association  to  appoint an umpire with the qualifications set forth below.  The
arbitrators  shall  be  active  or  retired officers of insurance or reinsurance
companies  or  Lloyd's  of  London  Underwriters  or  reinsurance  brokers;  the
arbitrators shall not have a personal or financial interest in the result of the
arbitration.
(b)     The  arbitration  hearing shall be held in Omaha, Nebraska or such other
place  as  may  be  mutually  agreed.  Each  party  shall submit its case to the
arbitrators within forty-five (45) days of the selection of the umpire or within
such  longer  period as may be agreed by the arbitrators.  The arbitrators shall
not be obliged to follow judicial formalities or the rules of evidence except to
the  extent  required  by  law  of  the state of New York; they shall make their
decisions  according  to the practice of the reinsurance business.  The decision
rendered  by  a  majority  of the arbitrators shall be final and binding on both
parties.  Such  decision  shall  be  a condition precedent to any right of legal
action arising out of the arbitrated dispute which either party may have against
the  other.  Judgment upon the award rendered may be entered in any court having
jurisdiction  thereof.  Both  parties  shall abide by the final decision of such
Court  or  of  any  appellate  court  in  the  event  of  an  appeal.
(c)     Except  as  provided  above,  arbitration  shall  be  based,  insofar as
applicable,  upon  the  Commercial Arbitration Rules of the American Arbitration
Association.
SECTION  7.3.  COSTS.     Each party shall bear its own costs in connection with
any  such arbitration including, without limitation,  all legal, accounting, and
any  other  professional  fees  and  expenses,  the fees and expenses of its own
arbitrator,  and  all  other costs and expenses each party incurs to prepare for
such  arbitration.  Other than set forth above, each side shall pay  one-half of
the fee and expenses of the umpire, and  one-half of the other expenses that the
parties  jointly  incur  directly  related  to  the  arbitration  proceeding.
                                  ARTICLE VIII

                                   TERMINATION
SECTION  8.01.  TERMINATION  DATE.  This  Agreement  can  only  be terminated by
mutual  consent.
SECTION  8.02.  APPROVALS.  If the approval of any state insurance department is
necessary for the effectiveness of this Retrocession Agreement, the parties will
cooperate  and  use  their  best  efforts  to  obtain  such  approvals.
SECTION  8.03.  COSTS  OF  TERMINATION.  If  this  Retrocession  Agreement  is
terminated  pursuant to Section 8.01, neither party shall be liable to the other
for  any costs, expenses, causes of actions, fees or claims of any type due with
respect  to  such  termination.
                                   ARTICLE IX

                       REGULATORY COMPLIANCE AND APPROVALS
SECTION  9.01.  COMPLIANCE.  The  parties  agree  to  comply  with  all  laws,
regulations or directions of appropriate state insurance departments with regard
to  (a)  any  notification  to  policyholders  under  the  Reinsured  Contracts
(including  without  limitation  all  content,  description,  timing  or  other
requirements),  (b) this Retrocession Agreement and (c) all service requirements
to  policyholders  under  the  Reinsured  Contracts.
SECTION  9.02.  REGULATORY  APPROVALS.  The  parties  agree  that  where  formal
approval is required by any state insurance regulatory agency, this Retrocession
Agreement shall not be effective as to any and all Reinsured Contracts in effect
in  such  state  until  such  approval  is  obtained.
                                    ARTICLE X

                                 CONFIDENTIALITY
SECTION  10.01.  CONFIDENTIAL  INFORMATION.  During  the  course  of performance
under  this  Retrocession  Agreement,  the  parties and their respective agents,
employees  and representatives will obtain or have access to certain proprietary
or  confidential  information.  The  parties  undertake and covenant, one to the
other,  that  they  will, and they will cause their respective agents, employees
and  representatives to, maintain the confidential information in a confidential
manner  in  accordance  with  applicable  local,  state  or federal laws, and in
accordance  with  this  Retrocession  Agreement.
                                   ARTICLE XI

                             RELATIONSHIP OF PARTIES
SECTION  11.01.  NO  EMPLOYMENT  RELATIONSHIP.  The  relationships  between  the
parties  hereto  shall be that of independent contractors.  Nothing herein shall
be  construed  to  create  the relationship of employer and employee between the
parties  or  any  of  their  respective  agents  or  employees.
                                   ARTICLE XII

                                OTHER PROVISIONS
SECTION  12.01.  PARAGRAPH  HEADINGS.  The  headings  of  the provisions of this
Retrocession  Agreement  are  for  reference purposes and have no legal force or
effect.
SECTION  12.02.  GOVERNING  LAW.  This Retrocession Agreement shall be construed
and  interpreted  according  to  the  laws  of  the  State  of  Iowa.
SECTION 12.03.  OTHER ACTIONS.  The parties will use their best efforts to cause
the reinsurance contemplated under this Retrocession Agreement to be consummated
and  approved  by  all  necessary regulatory bodies and to do such further acts,
matters  and  deeds,  and  execute  any  and  all  additional  instruments  and
agreements,  that  may be mutually agreed as necessary or reasonably required in
order  to  carry  this  Retrocession  Agreement  into  full  effect.
SECTION  12.04.  COUNTERPARTS;  FACSIMILE  SIGNATURES.  This  Agreement  may  be
executed in one or more counterparts, each of which shall be deemed an original,
but  all  of  which  together shall constitute one and the same instrument.  For
purposes  of this Agreement, facsimile signatures shall be deemed originals, and
the  parties  agree  to  exchange  original  signatures as promptly as possible.
SECTION  12.05.  SET OFF.  Granite and Acceptance shall have the right to offset
any  balance  or amounts due from one party to the other under the terms of this
Agreement.  The  party asserting the right of offset may exercise such right any
time whether the balances due are on account of premiums or losses or otherwise.
SECTION  12.06.  NOTICES.  Until  otherwise  notified,  all  formal  notices,
requests, demands and other communications between the parties shall be directed
to  the  parties  at  their  respective  addresses  as  follows:
     If  to  Reinsurer:
Acceptance  Insurance  Company
535  West  Broadway
Council  Bluffs,  Iowa  51503
Attn:  President
     If  to  Ceding  Companies:
IGF  Insurance  Company
4720  Kingsway  Drive
Indianapolis,  Indiana  46205
Attn:  President
SECTION  12.07.  ASSIGNMENT.  This  Retrocession  Agreement is not assignable by
either  party  without  prior  written  consent  of  the  other party and, where
required,  the  prior  approval  of  any appropriate state insurance department.
Neither  party's  consent  under  this  Section  shall be unreasonably withheld.
SECTION 12.08.  WAIVER.  Failure of Reinsurer or Ceding Companies to enforce any
of its rights or remedies under this Retrocession Agreement shall not constitute
a  waiver  of  such  rights  or  remedies  exercisable  hereunder.
SECTION  12.09.  SEVERABILITY.  If  any provision of this Retrocession Agreement
should  be  determined  to  be invalid or otherwise unenforceable under law, the
remainder  of  this  Retrocession  Agreement  shall  not  be  affected  thereby.
SECTION  12.10.  AGREEMENT BINDING.  This Retrocession Agreement is binding upon
the  parties  hereto,  their respective representatives, successors and assigns.
SECTION 12.11.  MULTIPLE COPIES.  This Retrocession Agreement may be executed in
multiple  copies, and each shall have the same force and effect of the original.
     SECTION  12.11  JOINT AND SEVERAL LIABILITY.  All rights and obligations of
the  Ceding  Companies  created  under  the terms of this Retrocession Agreement
shall  be  joint  and  several.
SECTION  12.12.  INTEREST.  Interest  on the balance due and payable that is not
paid  when  due, shall, in addition to the amount due, incur and pay interest on
the  amount  due  at  1  %  per  month  on  part  thereof.
     IN  WITNESS  WHEREOF,  this  Retrocession Agreement has been duly executed.
CEDING  COMPANIES:
IGF INSURANCE COMPANY, for itself and for CONTINENTAL CASUALTY INSURANCE COMPANY
By
Name
Title

REINSURER:
ACCEPTANCE  INSURANCE  COMPANY
By
Name
Title  __________________________________


<TABLE>
<CAPTION>



MPCI STOP LOSS REINSURANCE CONTRACT
TABLE OF CONTENTS
<S>                                  <C>

ARTICLE
-----------------------------------
                                     Preamble
1 . . . . . . . . . . . . . . . . .  Term
2 . . . . . . . . . . . . . . . . .  Season
3 . . . . . . . . . . . . . . . . .  Business Covered
4 . . . . . . . . . . . . . . . . .  Territory
5 . . . . . . . . . . . . . . . . .  Exclusions
6 . . . . . . . . . . . . . . . . .  Reinsuring
7 . . . . . . . . . . . . . . . . .  Extra Contractual Obligations
8 . . . . . . . . . . . . . . . . .  Excess of Original Policy Limits
9 . . . . . . . . . . . . . . . . .  Definitions
10. . . . . . . . . . . . . . . . .  Notice of Loss and Loss Settlements
11. . . . . . . . . . . . . . . . .  Premium
12. . . . . . . . . . . . . . . . .  Net Retained Lines
13. . . . . . . . . . . . . . . . .  Offset
14. . . . . . . . . . . . . . . . .  Access to Records
15. . . . . . . . . . . . . . . . .  Errors and Omissions
16. . . . . . . . . . . . . . . . .  Currency
17. . . . . . . . . . . . . . . . .  Arbitration
18. . . . . . . . . . . . . . . . .  Service of Suit
19. . . . . . . . . . . . . . . . .  Insolvency
                                     ATTACHMENTS
                                     --------------------------------------------------------------------------
                                     Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.
                                     Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - Canada
</TABLE>




     16

                       MPCI STOP LOSS REINSURANCE CONTRACT
                   (hereinafter referred to as the "Contract")
In  consideration  of  the mutual covenants hereinafter contained and subject to
all  the  terms  and  conditions  hereinafter  set  forth
                        GRANITE REINSURANCE COMPANY, LTD.

                    (hereinafter referred to as "Reinsurer ")

                    do hereby indemnify, as herein provided,
                       ACCEPTANCE INSURANCE COMPANIES INC.
                   (hereinafter referred to as the "Company" )
Wherever the word "Company" is used in this Contract, such term shall be held to
include  any  and/or  all of the subsidiary companies which are or may hereafter
come  under  the management of the Company, provided that notice be given to the
Reinsurer  of  any  such subsidiary companies which may hereafter come under the
management  of  the  Company as soon as practicable, with full particulars as to
how  such  acquisition  is  likely  to  affect  this  Contract.
                                    ARTICLE 1
TERM
This Contract shall become effective as of July 1, 2000 and shall remain in full
force  and  effect  with  respect  to  all  Covered  Business  risks in force or
attaching  from  that  date  through  June  30,  2005.
The  Reinsurer  shall be responsible for all losses in progress at June 30, 2005
in the same manner and to the same extent it would have been responsible had the
Contract  expired  or terminated the day following the conclusion of the loss in
progress.
                                    ARTICLE 2
SEASON
The Season commences on July 1 of each year and continues through June 30 of the
following  year.
                                    ARTICLE 3
BUSINESS  COVERED
This  Contract  shall  indemnify  the  Company,  as  set forth in the Reinsuring
Article,  in  respect of the liability which may accrue to the Company under all
policies,  bonds,  binders, certificates, contracts of insurance or reinsurance,
co-insurance  or  co-indemnity,  or  other  evidences  of liability (hereinafter
referred  to  as  "policy(ies)"  and/or  "bond(s)",  oral  or written, issued or
renewed  before  or  after  the  effective  time  and  date hereof, issued by or
contracted  for  by  the  Company  in  respect of all business classified by the
Company  as Multi-Peril Crop Insurance (MPCI) business, as defined and reinsured
by  the  FCIC  and  issued  by the Company, IGF Insurance Company or Continental
Casualty  Company.  This Contract shall also indemnify the Company, as set forth
in  Part  II  of Article 6, in respect of the indemnification obligations to the
Company of IGF Insurance Company and IGF Holdings, Inc. under Article IX of that
certain  Asset  Purchase  Agreement  dated  as  of May 23, 2001 ("APA"), but the
Reinsurer  shall  not  be  liable  for more than $36,400,000 minus the aggregate
amounts  paid  to the Company pursuant to Article IX of the APA by IGF Insurance
Company or IGF Holdings, Inc. in the aggregate under this sentence and such Part
II; provided, however, that such aggregate dollar limitation on such liabilities
shall  not  apply  with respect to an indemnification obligation arising from or
related  to  actual fraud committed by IGF Insurance Company, IGF Holdings, Inc.
or  the  Reinsurer.
                                    ARTICLE 4
TERRITORY
This Contract shall apply only to risks located in the United States of America.
                                    ARTICLE 5
EXCLUSIONS
This  Contract  shall  not  apply  to  and  specifically  excludes:
1.     Any  loss  or  damage  which is occasioned by war, invasion, hostilities,
acts of foreign enemies, civil war, rebellion, insurrection, military or usurped
power,  or  martial  law  or  confiscation  by order of any government or public
authority,  but  not  excluding  loss  or  damage which would be covered under a
standard  policy  form  containing  a  standard  war  exclusion  clause.
2.     All  liability  of the Company excluded by the following clauses attached
hereto:
(a)     Nuclear  Incident  Exclusion  Clause  -  Physical Damage - Reinsurance -
U.S.A.
(b)     Nuclear  Incident  Exclusion  Clause  -  Physical Damage - Reinsurance -
Canada.
3.     Risks  not  reinsured  by  FCIC.
4.     This  Contract excludes all liability of the Company arising by contract,
operation  of  law,  or otherwise, from its participation or membership, whether
voluntary or involuntary, in any insolvency fund. "Insolvency fund" includes any
guaranty  fund,  insolvency  fund,  plan,  pool,  association,  fund  or  other
arrangement,  howsoever denominated, established or governed, which provides for
any  assessment of or payment or assumption by the Company of part or all of any
claim,  debt,  charge, fee, or other obligation of an insurer, or its successors
or  assigns, which has been declared by any competent authority to be insolvent,
or  which  is  otherwise  deemed  unable to meet any claim, debt, charge, fee or
other  obligation  in  whole  or  in  part.
5.     Loss  adjustment  expense.  For  the  purposes of this Contract, the term
"loss  adjustment  expense"  shall mean all loss adjustment expenses incurred by
the  Company,  as  defined  by  the  FCIC.

                                    ARTICLE 6
REINSURING
Part  I:          The Reinsurer shall be liable for 100% of the subject ultimate
-------
net  loss  in  excess  of:
1.     140%,  but  not  greater than 150%, of the Company's subject net retained
premium  income  for  each  crop  year.
2.     The  liability  of  the  Reinsurer  for  the term of the treaty shall not
exceed  $40,000,000  in all without the payment of additional premium equal to a
rate  of  5%  of  subject  net  retained  premium income for each year unearned.
Part  II:          In  addition,  the  Reinsurer  shall be jointly and severally
--------
liable  to  the Company, to the same extent and on the same terms and conditions
----
that  IGF  Insurance  Company  and  IGF  Holdings,  Inc.  shall be liable to the
Company,  against  all damages, losses, liabilities, costs and expenses of every
kind  whatsoever incurred or suffered by the Company that result from, relate to
or  arise  out  of  those  matters  specified  by  Article  IX  of  the  APA.
Notwithstanding  any  other  provision  of this Contract, however, the Reinsurer
shall  not be liable to the Company under this Part II in excess of an aggregate
of  $36,400,000  minus  the  aggregate  amounts  paid to the Company pursuant to
Article  IX  of  the  APA  by IGF Insurance Company or IGF Holdings, Inc. in the
aggregate  under  Article  3  and  this  Part  II;  provided, however, that such
aggregate  dollar limitation on such liabilities shall not apply with respect to
an  indemnification obligation arising from or related to actual fraud committed
by  IGF  Insurance  Company,  IGF  Holdings,  Inc.  or  the  Reinsurer.

                                    ARTICLE 7
                                    ---------
EXTRA  CONTRACTUAL  OBLIGATIONS
This  Contract shall not protect the Company within the limits hereof, where the
ultimate  net  loss includes any extra contractual obligations.  The term "extra
contractual  obligations"  is defined as those liabilities not covered under any
other  provision of this Contract and which arise from the handling of any claim
on  business  covered  hereunder,  such  liabilities arising because of, but not
limited  to,  the following:  failure by the Company to settle within the policy
limit,  or  by  reason  of  alleged or actual negligence, fraud, or bad faith in
rejecting  an offer of settlement or in the preparation of the defense or in the
trial  of  any  action against its insured or reinsured or in the preparation or
prosecution  of  an  appeal  consequent  upon  such  action.
The  date  on  which any extra contractual obligation is incurred by the Company
shall  be  deemed, in all circumstances, to be the date of the original disaster
and/or  casualty.
                                    ARTICLE 8
                                    ---------
EXCESS  OF  ORIGINAL  POLICY  LIMITS
This  Contract  shall  not  protect  the  Company,  within the limits hereof, in
connection with ultimate net loss in excess of the limit of its original policy,
such  loss  in excess of the limit having been incurred because of failure by it
to  settle within the policy limit or by reason of alleged or actual negligence,
fraud, or bad faith in rejecting an offer of settlement or in the preparation of
the defense or in the trial of any action against its insured or reinsured or in
the  preparation  or  prosecution  of  an  appeal  consequent  upon such action.
For  the  purpose  of  this  Article, the word "loss" shall mean any amounts for
which  the  Company  would have been contractually liable to pay had it not been
for  the  limit  of  the  original  policy.
                                    ARTICLE 9
                                    ---------
DEFINITIONS
A.     The  term  "ultimate  net  loss"  as used in this Contract shall mean the
ratio of the net retained premium income into the net retained loss.  An example
of  the  calculation is as follows:  net retained premium income equals $100 and
the  net  retained loss equals $150 resulting in the calculation of $150 divided
by  $100  which  equals  150%.
B.     The  term "subject ultimate net loss" as used in this Contract shall mean
the  subject  net  retained  premium  on  business the subject of this Contract,
classified  by  the  Company  as  MPCI.
C.     The  term  "net  retained  premium income" as used in this Contract shall
mean  gross  premium  income  on  Covered  Business, less cessions to the FCIC's
Assigned  Risk,  Developmental  and  Commercial  Funds.
D.     The  term  "subject net retained premium income" as used in this Contract
shall  mean  the  net  retained  premium on Covered Business the subject of this
Contract,  classified  by  the  Company  as  MPCI.
E.     The  term  "net  retained  loss"  as used in this Contract shall mean the
gross losses less all cessions to the FCIC's Assigned Risk and Developmental and
Commercial  Funds.
                                   ARTICLE 10
                                   ----------
NOTICE  OF  LOSS  AND  SETTLEMENTS
The  Company  shall  give  notice  to  the  Reinsurer,  as  soon  as  reasonably
practicable  in  the  event  ultimate net losses are likely to result in a claim
being made upon the Reinsurer, based upon a reasonable estimate of the Company's
subject  net  retained  premium income, and the Company shall keep the Reinsurer
advised  of  all  subsequent  developments.
The  Reinsurer  agrees  to  abide  by  the loss settlements of the Company, such
settlements  to  be construed as satisfactory proof of loss.  Amounts falling to
the  share  of  the Reinsurer shall be immediately payable to the Company by the
Reinsurer  upon  reasonable  evidence  of  the  amount paid or to be paid by the
Company  being  presented  to  the  Reinsurer.
Should  the  ultimate  net  loss  of  the Company exceed the Company's estimated
retention  prior to the time that the subject net retained premium income of the
Company  is  known,  the  Reinsurer shall make provisional settlement based on a
reasonable estimate of the subject net retained premium income.  Any provisional
settlement  shall  be  adjusted  when the Company 's actual subject net retained
premium  income  is  known.
In  addition,  the  Company  shall  provide information regarding potential loss
developments  on  July  15, August 30 and October 15 of each year, or as soon as
information  is  available.
INTEREST  EXPENSE
From  the  date  following  10 days after demand by the Company for payments due
under  this  clause, the amount outstanding shall bear interest at the rate of 1
%  per  month  or  part  thereof  until  paid.
Should  Company withhold money due Reinsurer that is in excess of an actual paid
loss,  or  should  the  Reinsurer pay to the Company any amount greater than the
actual  paid  loss, or should Company withhold any amount pursuant to Part II of
Article 6, the amount in excess of such actual paid losses, or in excess of sums
properly  due  under  Part II of Article 6, shall be repaid or paid to Reinsurer
including interest thereon at the rate of 1 % per month or part thereof from the
date  such  excess  amount  was  paid  or  withheld until full payment hereunder
including  interest.
                                   ARTICLE 11
                                   ----------
PREMIUM
A.     The  Company  will  pay  the  Reinsurer  a minimum and deposit premium of
$6,000,000  at  the  signing  of this treaty for the crop year 2001 and 2002 and
shall  pay a minimum deposit premium of $3,000,000 on January 1, 2003, a minimum
deposit  of $3,000,000 on January 1, 2004 and a minimum deposit of $3,000,000 on
January  1,  2005.
B.     Within  30  days following the end of the calendar year the Company shall
provide  any  other information which the Reinsurer may require to prepare their
Annual  Statement  which  is  reasonably  available  to  the  Company.
                                   ARTICLE 12
                                   ----------
NET  RETAINED  LINES
This  Contract  applies  only  to  that  portion of any policy which the Company
retains  net  for  its  own  account  (prior  to  deduction  of  any  underlying
reinsurance  specifically  permitted  in  this Contract), and in calculating the
amount  of  any  loss  hereunder  and also in computing the amount or amounts in
excess  of  which this Contract attaches, only loss or losses in respect of that
portion of any policy which the Company retains net for its own account shall be
included.
The  amount  of  the  Reinsurer'  liability  hereunder in respect of any loss or
losses  shall  not  be  increased  by  reason of the inability of the Company to
collect  from  any  other reinsurer(s), whether specific or general, any amounts
which  may have become due from such reinsurer(s), whether such inability arises
from  the  insolvency  of  such  other  reinsurer(s)  or  otherwise.
                                   ARTICLE 13
                                   ----------
OFFSET
The  Company  and  the  Reinsurer  shall have the right to offset any balance or
amounts  due  from  one  party  to  the other.  The party asserting the right of
offset  may exercise such right any time whether the balances due are on account
of  premiums  or  losses  or  otherwise.
                                   ARTICLE 14
                                   ----------
ACCESS  TO  RECORDS
The  Reinsurer  or  its  designated  representatives  shall  have  access at any
reasonable  time  to all records of the Company which pertain in any way to this
reinsurance.
                                   ARTICLE 15
                                   ----------
ERRORS  AND  OMISSIONS
Any  inadvertent  error,  omission  or  delay  in  complying  with the terms and
conditions  of  this  Contract  shall not be held to relieve either party hereto
from any liability which would attach to it hereunder if such error, omission or
delay  had  not  been  made, provided such error, omission or delay is rectified
immediately  upon  discovery.
                                   ARTICLE 16
                                   ----------
CURRENCY
Whenever the word "Dollars" or the "$" sign appears in this Contract, they shall
be  construed  to  mean  United  States  Dollars and all transactions under this
Contract  shall  be  in  United  States  Dollars.
Amounts paid or received by the Company in any other currency shall be converted
to United States Dollars at the rate of exchange at the date such transaction is
entered  on  the  books  of  the  Company.
                                   [RESERVED]
                                   ARTICLE 17
                                   ----------
SERVICE  OF  SUIT
It is agreed that in the event of the failure of the Reinsurer to pay any amount
claimed  to  be  due  under  this Contract, the Reinsurer, at the request of the
Company,  shall  submit  to  the  jurisdiction of any court of the State of Iowa
which  shall  be  the  exclusive  forum  for  any  proceeding arising under this
Reinsurance  Contract, including, but not limited to, its negotiation, execution
or  performance,  and  all  matters  arising  hereunder  shall  be determined in
accordance  with  the  law  and  practice  of  such  court.
Service  of process upon Granite Reinsurance Company Limited in such suit may be
made at any office of Symons International Group, Inc. or any of its affiliates,
or  upon  any  officer or director of Granite Reinsurance Company wherever found
(hereinafter "agent for service of process"), and in any suit instituted against
any  Reinsurer(s)  upon this Contract, the Reinsurer(s) shall abide by the final
decision  of  such  court  or  of any appellate court in the event of an appeal.
The  above  named  are  authorized  and directed to accept service of process on
behalf  of  the  Reinsurer(s)  in  any  such suit and/or upon the request of the
Company  to give a written undertaking to the Company that the agent for service
of process shall enter a general appearance on behalf of the Reinsurer(s) in the
event  such  a  suit  shall  be  instituted.
Further,  pursuant  to  any  statute  of any state, territory or district of the
United States of America which makes provision therefor, the Reinsurer(s) hereby
designate  the  Superintendent,  Commissioner  or Director of Insurance or other
officer  specified  for  that  purpose  in  the  statute,  or  his  successor or
successors  in office, as their true and lawful attorney upon whom may be served
any  lawful process in any action, suit or proceeding instituted by or on behalf
of  the  Company  or  any beneficiary hereunder arising out of this Contract and
hereby  designate  the agent for service of process as the firm to whom the said
officer  is  authorized  to  mail  such  process  or  a  true  copy  thereof.
The  provisions of this Article shall survive any termination of this Agreement.
                                   ARTICLE 18
                                   ----------
INSOLVENCY
(All  references  to the insolvency of the Company herein are also applicable to
the  insolvency  of each and every insurance carrier collectively referred to as
the  "Company.")
In the event of the insolvency of the Company, this reinsurance shall be payable
directly  to  the  Company,  or  to  its  liquidator,  receiver,  conservator or
statutory  successor  on  the  basis  of  the  liability  of the Company without
diminution  because  of the insolvency of the Company or because the liquidator,
receiver,  conservator  or  statutory successor of the Company has failed to pay
all  or  a  portion  of  any claim.  It is agreed, however, that the liquidator,
receiver,  conservator  or statutory successor of the Company shall give written
notice  to  the  Reinsurer  of  the  pendency  of  a  claim  against the Company
indicating  the  policy  or bond reinsured, which claim would involve a possible
liability on the part of the Reinsurer within a reasonable time after such claim
is  filed  in the conservation or liquidation proceeding or in the receivership,
and  that  during the pendency of such claim, the Reinsurer may investigate such
claim and interpose, at their own expense, in the proceeding where such claim is
to  be  adjudicated  any defense or defenses that they may deem available to the
Company  or  its  liquidator, receiver, conservator or statutory successor.  The
expense  thus  incurred  by  the  Reinsurer  shall be chargeable, subject to the
approval  of  the  court,  against  the  Company  as  part  of  the  expense  of
conservation  or  liquidation  to  the extent of a pro rata share of the benefit
which  may accrue to the Company solely as a result of the defense undertaken by
the  Reinsurer.
Where  two  or  more reinsurers are involved in the same claim and a majority in
interest  elect  to  interpose  defense  to  such  claim,  the  expense shall be
apportioned  in  accordance with the terms of the reinsurance Contract as though
such  expense  had  been  incurred  by  the  Company.
As to all reinsurance made, ceded, renewed or otherwise becoming effective under
this  Contract,  the  reinsurance  shall  be  payable  as set forth above by the
Reinsurer  to  the  Company  or  to  its  liquidator,  receiver,  conservator or
statutory  successor,  (except as provided by Sections 4118(a)(1)(A) and 1114(c)
of  the  New  York  Insurance Law) or except (1) where the Contract specifically
provides  another  payee  in  the event of the insolvency of the Company, or (2)
where  the  Reinsurer,  with the consent of the direct insured or insureds, have
assumed  such  policy  obligations  of  the Company as direct obligations of the
Reinsurer  to  the  payees  under  such  policies  and  in  substitution for the
obligations  of  the  Company to such payees.  Then, and in that event only, the
Company,  with  the  prior approval of the certificate of assumption on New York
risks  by  the Superintendent of Insurance of the State of New York, is entirely
released  from  its obligation and the Reinsurer pay any loss directly to payees
under  such  policy.
                                   ARTICLE 19
REGULATORY  COMPLIANCE  AND  APPROVALS
The  parties  agree  to  comply  with  all  laws,  regulations  or directions of
appropriate  state  insurance departments with regard to (a) any notification to
policyholders  under  the  Reinsured Contracts (including without limitation all
content,  description,  timing  or  other  requirements),  (b)  this Reinsurance
Contract  Agreement  and (c) all service requirements to policyholders under the
Reinsured  Contracts.
The  parties agree that where formal approval is required by any state insurance
regulatory  agency,  this  Reinsurance Contract shall not be effective as to any
and  all  Reinsured  Contracts  in  effect  in such state until such approval is
obtained.
The  Reinsurer  has  provided  its  Statutory Financial Statements and actuarial
opinion  for  the  year ended December 31, 2000 to the Company and the Reinsurer
will  provide  the Company with copies of its Statutory Financial Statements and
actuarial opinion for each subsequent calendar year by April 30 of the following
year.

                        SIGNATURES ON THE FOLLOWING PAGE
                        --------------------------------

                    GRANITE  REINSURANCE  COMPANY

                         By:_______________________________________

                         Its:_______________________________________

ACCEPTANCE  INSURANCE  COMPANIES  INC.

                         By:_______________________________________

                         Its:_______________________________________


<PAGE>
                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement") is entered into by and between
Goran Capital Inc. ("Goran") and Symons International Group, Inc. (together with
its  subsidiaries, "SIG") and David N. Hafling ("You", "Your" or "Executive") as
of  October  15,  2001  with  reference  to  the  following:

     WHEREAS,  Goran  and  SIG  consider  it  essential in their respective best
interests  and  the  best  interests of their respective stockholders for SIG to
retain  the  employment  of  David  N.  Hafling,  upon  the terms and conditions
hereinafter  set  forth;  and

     WHEREAS, the Executive desires to continue employment by SIG upon the terms
and  conditions  contained  herein.

     NOW,  THEREFORE, in consideration of the covenants and agreements set forth
below,  the  parties  agree  as  follows:

1.     EMPLOYMENT

     1.1     Term  of  Agreement.  SIG  agrees  to  continue  the  employment of
             -------------------
Executive  as  Vice  President, Chief Actuary of SIG, until December 31, 2004 or
until  such  employment  is  terminated  pursuant  to Section 3 below; provided,
                                                                       --------
however, that the term of this Agreement shall automatically be extended without
     --
further  action  of  either party for additional one (1) year periods thereafter
unless,  not  later  than sixty (60) days prior to the end of the then effective
term,  either  SIG  or  the  Executive shall have given written notice that such
party  does  not  intend  to  extend  this  Agreement.

     1.2     Terms  of Employment.  During the term of this Agreement, You agree
             --------------------
to  be  a  full-time  employee of SIG serving in the position of Vice President,
Chief  Actuary  of  SIG  and  further  agree to devote substantially all of Your
working time and attention to the business and affairs of SIG and, to the extent
necessary  to  discharge  the  responsibilities associated with Your position as
Vice  President,  Chief  Actuary  of  SIG,  to  use Your best efforts to perform
faithfully  and efficiently such responsibilities.  Executive shall perform such
duties  and  responsibilities as may be determined from time to time by the Vice
Chairman,  Chief  Executive  Officer  or Executive Vice President of SIG and the
Board of Directors of SIG, which duties shall be consistent with the position of
Vice  President,  Chief  Actuary  of  SIG which shall grant Executive authority,
responsibility,  title  and  standing  comparable to that of the Vice President,
Chief Actuary of a stock insurance holding company of similar standing.  Nothing
herein  shall  prohibit  You  from  devoting  Your  time  to civic and community
activities  or  managing  personal  investments, as long as the foregoing do not
interfere  with  the  performance  of  Your  duties  hereunder.


2.     COMPENSATION,  BENEFITS  AND  PERQUISITES

     2.1     Salary.  SIG  shall  pay  Executive  a  salary,  in equal bi-weekly
             ------
installments,  equal  to an annualized salary rate of One Hundred Fifty Thousand
Dollars  ($150,000).  Executive's  salary payable pursuant to this Agreement may
be  increased  from  time  to time as mutually agreed upon by Executive and SIG.
SIG  shall  pay  Executive  the  salary applicable  in twenty-six (26) bi-weekly
installments.  Notwithstanding  any  other  provision  of  this  Agreement,
Executive's  salary paid by SIG for any year covered by this Agreement shall not
be  less  than  such  salary  paid  to  Executive  for the immediately preceding
calendar  year.  All salary and bonus amounts paid to Executive pursuant to this
Agreement  shall  be  in  U.S.  dollars.

     2.2     Bonus.  SIG  and Executive understand and agree that SIG desires to
             -----
achieve  significant growth during the term of this Agreement and that Executive
will  make  a  material  contribution  to that growth which will require certain
personal  and  familial sacrifices on the part of Executive.  Accordingly, it is
the  desire  and intention of SIG to reward Executive for the attainment of that
growth  through  bonus and other discretionary means (such as stock options, and
stock appreciation rights).  Executive may earn an annual bonus of up to $30,000
dependent  upon  certain  financial criteria as set forth in Exhibit 2.2 hereof.

     2.3     Employee  Benefits.  Executive  shall be entitled to receive health
             ------------------
plan  benefits  which are provided to other executive employees of SIG under the
applicable  company  plans  and policies, and to future benefits and health plan
benefits  made generally available to executive employees of SIG with duties and
compensation  comparable to that of Executive upon the same terms and conditions
as  other  company  participants  in  such  plans.

     2.4     Additional  Perquisites.  During  the  term  of this Agreement, SIG
             -----------------------
shall  provide  Executive with not less than four (4) weeks paid vacation during
each  calendar  year.

     2.5     Expenses.  During  the period of his employment with SIG, Executive
             --------
shall  be  entitled  to  receive  reimbursement from SIG (in accordance with the
policies  and procedures in effect for the company employees) for all reasonable
travel,  entertainment and other business expenses incurred by him in connection
with  his  services  hereunder.

3.     TERMINATION  OF  EXECUTIVE'S  EMPLOYMENT

     3.1.1     Termination  of  Employment  and  Severance  Pay.  Executive's
               ------------------------------------------------
employment  under  this  Agreement may be terminated by either party at any time
for  any reason; provided, however, that if Executive's employment is terminated
                 --------  -------
by  SIG  for  any  reason  other  than  for  cause,  SIG  and Goran, jointly and
severally,  agree  to  pay  severance to Executive of up to six (6) month's then
current  salary  in  regular  bi-weekly  payments  (the  "Salary Continuation"),
subject  to reduction as provided in Section 3.1.2.  Further, if Executive shall
be  terminated  without  cause,  severance  payments  described in the preceding
sentence  are  conditioned  upon  execution by Executive and SIG of a waiver and
release  agreement  substantially  in  the  form  of  Exhibit A attached hereto.
Further,  Executive  shall receive severance pay in accordance with this Section
3.1  if  Executive shall terminate this Agreement due to a breach thereof by SIG
or  if  Executive is directed by SIG to engage in any act or action constituting
fraud  or  any  unlawful  conduct  relating  to  SIG  or  its business as may be
determined by application of applicable law.   For purposes of this Section 3.1,
termination  of  employment  shall  include  a  change  of  employment such that
Executive  shall  no  longer  be  employed  by SIG as a Vice President or as its
senior  executive  responsible  for the actuarial function of SIG or at a salary
less  than  Executive's  current  salary.

     3.1.2     Reduction of Salary Continuation.  It is expressly understood and
               --------------------------------
agreed  that the amount of any payment to Executive required pursuant to Section
3.1.1  shall  be  reduced (but not below zero) by the amount of any compensation
received  by Executive or attributable to services performed by Executive during
the Salary Continuation period.  During the Salary Continuation, Executive shall
provide  SIG  with a bi-weekly report which shall specify all services performed
by  Executive  for third parties, the identity of the person or entity for which
services  were  performed and any compensation paid or expected to be paid to or
for  the  benefit of Executive.  Executive shall use his reasonable best efforts
during  the  Salary  Continuation period to obtain employment comparable to that
with  SIG.

     3.2     Cause.  For  purposes  of  this  Section  3,  "cause"  shall  mean:
             -----

(a)     the Executive being convicted in the United States of America, any State
therein,  or  the  District  of  Columbia,  or in Canada or any Province therein
(each,  a "Relevant Jurisdiction"), of a crime for which the maximum penalty may
include imprisonment for one year or longer (a "felony") or the Executive having
entered  against  him  or  consenting  to any judgment, decree or order (whether
criminal  or otherwise) based upon fraudulent conduct or violation of securities
laws;

(b)     the  Executive's  being  indicted  for,  charged  with  or otherwise the
subject  of any formal proceeding (criminal or otherwise) in connection with any
felony, fraudulent conduct or violation of securities laws, in a case brought by
a  law  enforcement  or securities regulatory official, agency or authority in a
Relevant  Jurisdiction;

(c)     the  Executive  engaging  in  fraud, or engaging in any unlawful conduct
relating  to SIG or its business, in either case as determined under the laws of
any  Relevant  Jurisdiction;

(d)     the  Executive  breaching  any  provision  of  this  Agreement;  or

(e)     the  Executive "Grossly Neglects" his duty to SIG.  For purposes of this
Agreement,  "Gross  Neglect"  means  the failure to perform the functions of the
Executive's  job  or the failure by Executive to carry out reasonable directions
with respect to material duties after the Executive has been notified in writing
that the Executive is failing to perform these functions or failing to carry out
reasonable  directions.  Such  notice  shall specify the functions or directions
that the Executive is failing to perform and what steps need to be taken to cure
and  shall  set  forth  the  reasonable  time frame, which shall be at a minimum
forty-five  (45)  days, within which to cure.  If Executive fails to cure within
the time frame, SIG may terminate Executive's employment for cause by giving him
thirty  (30)  days  notice  or  pay  in  lieu  thereof.

     3.3     Disability.  So  long  as  otherwise permitted by law, if Executive
             ----------
has become permanently disabled from performing his duties under this Agreement,
SIG's  Chairman  of  the Board, may, in his discretion, determine that Executive
will  not  return  to work and terminate his employment as provided below.  Upon
any  such  termination  for  disability,  Executive  shall  be  entitled to such
disability,  medical,  life  insurance,  and  other  benefits as may be provided
generally  for  disabled employees of SIG during the period he remains disabled.
Permanent  disability  shall  be determined pursuant to the terms of Executive's
long  term  disability  insurance  policy  provided  by  SIG.  If  SIG elects to
terminate  this  Agreement  based on such permanent disability, such termination
shall  be  for  cause.

     3.4     Indemnification.  Executive  shall  be  indemnified  by  SIG to the
             ---------------
maximum  extent  permitted  by  applicable law for actions undertaken for, or on
behalf  of  SIG.

4.     NON-COMPETITION,  NON-SOLICITATION,  CONFIDENTIALITY  AND  TRADE  SECRETS

     4.1     Noncompetition.  In  consideration  of  SIG's  entering  into  this
             --------------
Agreement  and  the  compensation  and  benefits  to  be  provided by SIG to You
hereunder,  and  further  in  consideration  of  Your  exposure  to  proprietary
information  of  SIG, You agree that until the date of termination or expiration
of  this  Agreement for any reason (the "Date of Termination") not to enter into
competitive  endeavors  and  not  to  undertake any commercial activity which is
contrary  to the best interests of SIG or its affiliates, including, directly or
indirectly,  becoming  an  employee,  consultant,  owner  (except  for  passive
investments  of  not more than one percent (1%) of the outstanding shares of, or
any  other  equity  interest  in,  any  company  or entity listed or traded on a
national  securities  exchange  or  in  an  over-the-counter securities market),
officer,  agent  or  director  of, or otherwise participating in the management,
operation, control or profits of (a) any firm or person engaged in the operation
of a business engaged in the acquisition of insurance businesses or (b) any firm
or person which either directly competes with a line or lines of business of SIG
accounting  for  five  percent  (5%)  or  more of SIG's gross sales, revenues or
earnings  before  taxes  or  derives five percent (5%) or more of such firm's or
person's  gross sales, revenues or earnings before taxes from a line or lines of
business  which  directly  compete  with  SIG.

     Notwithstanding  any provision of this Agreement to the contrary, You agree
that  Your  breach  of  the  provisions  of this Section 4.1 shall permit SIG to
terminate  Your  employment  for  cause.

     4.2       Confidentiality.  You  shall  not knowingly disclose or reveal to
               ---------------
any  unauthorized  person,  during  or after the Term, any trade secret or other
confidential  information (as outlined in the Indiana Uniform Trade Secrets Act)
relating  to SIG or any of its affiliates, or any of their respective businesses
or  principals,  and You confirm that such information is the exclusive property
of  SIG  and its affiliates.  You agree to hold as SIG's property all memoranda,
books,  papers,  letters and other data, and all copies thereof or therefrom, in
any  way relating to the business of SIG and its affiliates, whether made by You
or otherwise coming into Your possession and, on termination of Your employment,
or  on  demand  of  SIG  at  any  time,  to  deliver  the  same  to  SIG.

     Any  ideas,  processes,  characters,  productions,  schemes, titles, names,
formats,  policies,  adaptations,  plots,  slogans,  catchwords,  incidents,
treatment,  and  dialogue  which  You may conceive, create, organize, prepare or
produce  during  the  period of Your employment and which ideas, processes, etc.
relate to any of the businesses of SIG, shall be owned by SIG and its affiliates
whether  or not You should in fact execute an assignment thereof to SIG, but You
agree  to  execute  any assignment thereof or other instrument or document which
may  be  reasonably  necessary  to  protect  and  secure  such  rights  to  SIG.

     4.3     Nonsolicitation.  During  Executive's  employment  with SIG and for
             ---------------
one (1) year following termination of Executive's employment, Executive will not
directly  or  indirectly  solicit,  divert  or  interfere  with the relationship
between  SIG  or  its  affiliates  and  any  employee  of SIG or its affiliates.

5.     MISCELLANEOUS

     5.1     Amendment.  This  Agreement  may be amended only in writing, signed
             ---------
by  both  parties.

     5.2     Entire Agreement.  This Agreement contains the entire understanding
             ----------------
of  the parties with regard to all matters contained herein.  There are no other
agreements,  conditions  or  representations,  oral  or  written,  expressed  or
implied, with regard to the employment of Executive or the obligations of SIG or
the  Executive.  This  Agreement  supersedes  all prior employment contracts and
non-competition  agreements  between  the  parties.

     5.3     Notices.  Any  notice  required  to  be  given under this Agreement
             -------
shall  be  in writing and shall be delivered either in person or by certified or
registered  mail,  return  receipt  requested.  Any  notice  by  mail  shall  be
addressed  as  follows:

     If  to  SIG,  to:

     Symons  International  Group,  Inc.
     4720  Kingsway  Drive
     Indianapolis,  Indiana  46205
     Attention:  Chief  Executive  Officer

     If  to  Executive,  to:

     David  N.  Hafling
     8650  Winding  Ridge  Road
     Indianapolis,  Indiana  46217

or  to  such  other addresses as one party may designate in writing to the other
party  from  time  to  time.

     5.4     Waiver  of  Breach.  Any  waiver by either party of compliance with
             ------------------
any  provision  of  this  Agreement  by  the other party shall not operate or be
construed  as  a  waiver  of  any  other  provision of this Agreement, or of any
subsequent  breach  by  such  party  of  a  provision  of  this  Agreement.

     5.5     Validity.  The  invalidity  or unenforceability of any provision of
             --------
this  Agreement  shall  not  affect  the validity or enforceability of any other
provision  of  this  Agreement,  which  shall  remain  in full force and effect.

     5.6     Governing Law.  This Agreement shall be interpreted and enforced in
             -------------
accordance  with  the  laws  of  the  State of Indiana, without giving effect to
conflict  of  law  principles.

     5.7     Headings.  The  headings  of  articles  and  sections  herein  are
             --------
included  solely for convenience and reference and shall not control the meaning
or  interpretation  of  any  of  the  provisions  of  this  Agreement.

     5.8     Counterparts.  This  Agreement  may  be  executed  by either of the
             ------------
parties  in  counterparts,  each of which shall be deemed to be an original, but
all  such  counterparts  shall  constitute  a  single  instrument.

     5.9     Survival.  SIG's  obligations  under  Section  3.1  and Executive's
             --------
obligations under Section 4 shall survive the termination and expiration of this
Agreement  in  accordance  with  the specific provisions of those Paragraphs and
Sections  and this Agreement in its entirety shall be binding upon, and inure to
the  benefit  of,  the  successors  and  assigns  of  the  parties  hereto.

     5.10     Miscellaneous.  No  provision  of  this Agreement may be modified,
              -------------
waived  or discharged unless such waiver, modification or discharge is agreed to
in  writing and signed by You and such officer as may be specifically designated
by the Board.  No waiver by either party hereto at any time of any breach by the
other  party  hereto  of, or compliance with, any condition or provision of this
Agreement  to  be  performed  by  such  other  party shall be deemed a waiver of
similar  or  dissimilar  provisions  or  conditions  at the same or at any prior
subsequent  time.

     IN  WITNESS  WHEREOF, the parties have executed this Agreement effective as
of  the  date  set  forth  above.

                              GORAN  CAPITAL  INC.


                              By:__________________________________
                              Alan  G.  Symons,  Chief  Executive  Officer


                              SYMONS  INTERNATIONAL  GROUP,  INC.


By:__________________________________
                              Douglas  H.  Symons,  Chief  Executive  Officer


                              _____________________________________
                              David  N.  Hafling



<PAGE>
                              EMPLOYMENT AGREEMENT

     WHEREAS,  Symons  International  Group, Inc. ("SIG") and Goran Capital Inc.
("GORAN")  (collectively,  SIG  and  Goran  are  referred  to  as the "Company")
consider  it  in  their  best  interests  to employ Gene S. Yerant ("you" or the
"Executive")  upon  the  terms  and  conditions  hereinafter  set  forth;  and

     WHEREAS,  the Executive is an individual with substantial experience in the
business  of  nonstandard  automobile  insurance;

     WHEREAS,  the  Company  desires  to  employ  an  executive  who will make a
significant  contribution  to effect profitability in its nonstandard automobile
insurance  business;  and

     WHEREAS, the Executive desires to be employed by the Company upon the terms
and  conditions  contained  herein.

     NOW,  THEREFORE, in consideration of the covenants and agreements set forth
below,  the  parties  agree  as  follow:

1.     Employment


<PAGE>
1.1          Term  of  Agreement.  The Company agrees to employ the Executive as
             -------------------
Executive  Vice  President  of  Goran,  Executive  Vice  President  of  SIG, and
President of Superior Insurance Group, Inc. ("Superior") effective as of January
10,  2000  and  continuing for a period of sixty (60) months through January 10,
2005 unless such employment is terminated pursuant to Section 3 below; provided,
however,  that the term of the Agreement shall automatically be extended without
further  action  of  either  party  for  additional  one-year periods thereafter
unless, not later than six months prior to the end of the effective term, either
the  Company  or  the  Executive shall have given written notice that such party
does  not  intend  to  extend  this  Agreement  (the  "Term").

1.2          Terms  of Employment.  During the Term, you agree to be a full-time
             --------------------
employee  of  SIG and Goran serving in the positions of Executive Vice President
of  SIG  and  Goran  and  President  of  Superior  and  further  agree to devote
substantially all of your working time and attention to the business and affairs
of  the  Company  and, to the extent necessary to discharge the responsibilities
associated  with  your position as Executive Vice President of SIG and Goran and
President  of  Superior,  to  use  your  best  efforts to perform faithfully and
efficiently  such  responsibilities.  Executive  shall  perform  such duties and
responsibilities  as  may  be  determined  from  time  to  time  by the Board of
Directors  of the Company, which duties shall be consistent with the position of
Executive  Vice  President  of  SIG  and  Goran,  which  shall  grant  Executive
authority, responsibility, title and standing comparable to that of an executive
vice  president  of  a  publicly  held  insurance company.  Nothing herein shall
prohibit  you  from  devoting  your  time  to  civic and community activities or
managing  personal  investments,  as long as the foregoing do not interfere with
the  performance  of  your  duties  hereunder.
1.3          Director.  The  Company  will  appoint the Executive as a member of
             --------
the  Board  of Directors of SIG and Superior at their first meeting(s) following
the  effective  date  of this Agreement. The Companies will provide Officers and
Directors  Liability  insurance in an amount equal to $10 million. The Executive
agrees  to  resign as a director of SIG and Superior and other affiliates of the
Company  upon  the  termination  or  expiration  of  this  Agreement.

2.     Compensation,  Benefits  and  Prerequisites

     2.1     Salary:  During  the  term of this Agreement, the Company shall pay
             ------
Executive  a  salary at the minimum annual rate of Five Hundred Thousand Dollars
($500,000).  The  salary  shall  be  payable  in  bi-weekly  equal installments.

     2.2     Bonus  Plan:
             -----------

     Bonus  A.  Based on Superior?s GAAP combined ratios, including billing fees
     --------
being  below  100%  and  gross  written  premium  for  2000  being  greater than
$250,000,000.  A  bonus of $25,000 per .25% improvement in combined ratio (as an
example  at  98%  combined  ratio the bonus would equal $200,000).  For the year
2001  the  gross written premium must exceed $300,000,000 and grow thereafter at
15%  per  annum.  A  guaranteed  minimum bonus of $125,000 is payable should the
combined  ratio be 101.5% or better for the year 2000.  The minimum is increased
to  $166,000  at  combined  ratio  of  100%  for  the year 2000.  The minimum is
increased  to $250,000 should the combined ratio be better than 99% for the year
2000.  All  of the above adjusted to eliminate prior years'development.  Payment
of the bonus is based on audit and actuary report of combined ratio with deficit
or  credit  of  reserves  for  year  2000  forward  adjusting  the  bonus  paid.

          Bonus A is payable by April 15 of the year following the year on which
the  bonus  is based. The year 2000 bonus is payable by April 15, 2001. The year
2001  bonus  is  payable  by  April  15,  2002  and  so  on  and  so  forth.


     B.  Bonus B.  In addition to the foregoing, should Superior equal or exceed
         -------
the  pre-tax  profit  as shown below in the year shown below a lump sum bonus as
shown  will  be  payable.


<TABLE>
<CAPTION>

Year  Ended


<S>           <C>                          <C>

December 31,  PRE-TAX PROFIT AT SUPERIOR   BONUS PAYABLE
------------  ---------------------------  --------------

2000 . . . .  $                25,893,000  $      500,000

2001 . . . .  $                29,777,000  $      500,000

2002 . . . .  $                34,243,000  $      500,000

2003 . . . .  $                39,380,000  $      500,000

2004 . . . .  $                45,287,000  $      500,000
</TABLE>




     18

     Bonus  B is payable by April 15 of the year following the year on which the
bonus  is based. The year 2000 bonus is payable by April 15, 2001. The year 2001
bonus  is  payable  by  April  15,  2002  and  so  on  and  so  forth.

     2.3     Stock  Options.  Executive  shall be eligible to participate in the
             --------------
Company's  stock  option  plan and will be granted 100,000 options for shares of
Goran  at  the  market  price  on  the  first day of the Term. Executive's stock
options shall be issued pursuant to the Goran Capital Inc. Share Option Plan and
a  Stock  Option  Agreement with respect thereto which shall be substantially in
the  Form  of  Exhibit  A  attached hereto.  These options shall vest and become
exercisable  by the Executive pro-rata over a five (5) year period from the date
of  grant.  However,  should the Executive be terminated for other than material
cause,  the  options  shall  vest  immediately  and  Executive may exercise such
options within four (4) weeks of the date of termination of employment.   In the
event  Executive  shall  fail  to  exercise the options within four (4) weeks of
termination  of  employment,  the  options  shall  expire.

     2.4     Privatization:   Should the majority stockholders of Goran complete
             --------------
a privatization of SIG and Goran, the Executive will be entitled to an ownership
interest  in the new entity.  The Executive's ownership interest shall be in the
form  of  stock  options  in  the  parent  holding company of Superior (the "New
Entity").  Executive  will  be  entitled  to  options  which  equal  2.5% of the
ownership interests of the New Entity.  The exercise price of the options in the
New  Entity  shall  be  based  upon  the value of the Company at the time of the
privatization.  As  a  condition  of  the grant of such replacement options, the
options  referred  to in paragraph 2.3 shall be canceled and any shares of stock
of  Goran  which  have  theretofore been issued upon the exercise of the options
referred  to in paragraph 2.3 shall be exchanged for the replacement options all
as  more  fully set forth in the Stock Option Agreement.   The vesting period of
such  replacement  options  will  be  over  the  remaining  initial term of this
Agreement.  The  amount  of the exercise price of such replacement options shall
be based upon a formula which shall be the same formula utilized for valuing the
options  of  other  executives of the Company in comparable positions, including
the  president  and  chief  operating  officer  of  the  Company.

          Should  the  Company  authorize  and/or  issue  additional  stock  the
Executive will be issued additional stock sufficient to maintain a 2.5% interest
in  the  Company.  There  shall  be  no  dissolution  of  interest  without  the
Executive's  express  written  consent.

          In  the  event  Executive  elects  or  is  required to sell his vested
options  or  shares  to  the Company or New Entity, the price for each option or
share  shall  be as determined by the Company pursuant to the Company's plan for
its  Executives  as  determined  by  the  Board  of Directors and which shall be
comparable  to  those  of  similar entities.  Notwithstanding the foregoing, the
value  of such options or shares shall be determined in accordance with the same
formula  or price utilized for valuing the options or shares of other executives
of  the  Company  in  comparable  positions,  including  the president and chief
executive  officer  of  the  Company.

     2.5          Employee Benefits:  The Executive shall be entitled to receive
                  -----------------
all  benefits  and prerequisites which are comparable to those provided to other
Executives  of  the  Company and in accordance with the policies of the Company.

     2.6          Additional  Perquisites:   During  the term of this Agreement,
                  -----------------------
the  Company  shall  provide  the  Executive  with:



<PAGE>
                                                             Draft Dated 11/5/99


     1

A.                    A  minimum  of  six  (6)  weeks  paid vacation during each
calendar  year.

<PAGE>
                                                             Draft Dated 11/5/99


     5



<PAGE>



     21

B.                    A  monthly motor vehicle allowance equal to the value of a
luxury  car or the Company will provide the Executive with a luxury car (Defined
as  a  BMW  740iL  or  its  equivalent.)  and will reimburse for all operational
expenses.  Executive  will  be  entitled to trade the car in at the time the car
has  in  excess  of  75,000  miles  or  four  (4) years, whichever first occurs.

C.                    Monthly dues incurred by Executive at the country club and
city  club  of  his  choice  located  within reasonable geographic limits of the
corporate offices of the Company, including the entrance fees to become a member
of  the  country  club  and  city  club.

     2.7          Expenses:  During  the  period  of  the Executive's employment
                  --------
hereunder,  the  Executive  shall  be entitled to receive reimbursement from the
Company  (in  accordance  with  the  policies  and  procedures in effect for the
Company's  Executive  employees)  for  all  reasonable travel, entertainment and
other  business  expenses  incurred  by  him  in  connection  with  his services
hereunder.

     2.8          Insurance:  The Company will allow the Executive to include in
                  ---------
his  expense  account  the  cost of personal insurance for up to two (2) private
cars, homeowner's insurance on his principal residence in the city of employment
of  the  Executive,  including  $2  million  umbrella  liability.

          2.9          401(k):  Executive  will  be  eligible for the SIG 401(k)
                       ------
plan  in  accordance  with  the  policies  of  the  Company.

          2.10     Hiring  Bonus:  The  Company  will  pay Executive Two Hundred
          ----     -------------
Fifty  Thousand  Dollars ($250,000) upon commencement of employment.  Should the
Executive  leave  the Company within the first twelve (12) months of employment,
including  termination  for  material  cause,  and  excluding termination by the
Company, the Executive shall immediately reimburse the Company the sum of Twenty
Thousand  Eight  Hundred Dollars ($20,800) for each remaining month of the first
twelve  (12)  months  of  employment

          2.11     Relocation  Expense

               A     Company will cover the direct costs of moving the Executive
and  his family from Dallas, Texas to Indianapolis, Indiana, including visits to
Indianapolis,  packing,  moving  costs,  insurance  and  unpacking.

               B.     Company  will pay realtor fees up to 7% on the sale of the
Dallas  home.

               C.     Company will pay all closing costs on an Indianapolis home
and  buy  down  the  mortgage  to  6.75%  for a mortgage loan of up to $300,000.

               D.     Company  will hire a relocation firm or give you a minimum
price on your home based on fair market value. If your Dallas home does not sell
within  120  days of the agreed move date, the Company will purchase the home at
the  agreed  fair  market  value  or  the relocation firm will take it over. The
Company  will  help  with  any  bridging  loans  required.

               E.     Company  will reimburse the Executive for weekly travel to
and  from  Dallas  until  the  relocation  is  complete.

3.     Termination  of  Executive's  Employment

     3.1     Termination  of  Employment  and  Severance  Pay.  The  Executive's
             ------------------------------------------------
employment  under  this  Agreement may be terminated by either party at any time
for  any  reason.

          In  the  event  Executive  is terminated for any reason other than for
material  cause,  the  Executive  shall be entitled to receive a continuation of
his  salary  and  benefits  in  effect  under  this Agreement on the date of his
employment termination for a period of two (2) years provided that the Executive
has  not  breached  the  terms  of  this  Agreement.  Should  the  Executive  be
terminated  by  the  Company  for  other than material cause, all of Executive's
stock options shall immediately vest and Executive shall be entitled to exercise
the  options  within  four (4) weeks of termination.  If Executive shall fail to
exercise  the  options  within  four (4) weeks of termination of employment, the
options  shall expire.  All bonuses that shall have become earned as of the most
recently  preceding  year  end  shall  be due and payable in accordance with the
bonus  payment  dates  as  set forth in Section 2.2 hereof. Bonuses, which would
have  been  earned  for  the year in which the Executive is terminated, shall be
paid  pro  rata to the date of termination. Termination shall be effective as of
the  date  specified by the party initiating the termination in a written notice
delivered  to  the  other  party.


          In  the event this Agreement is not renewed by Company, Employee shall
be entitled to receive a continuation of his salary and benefits in effect under
this  Agreement on the date of non-renewal for a period of one (1) year from the
date  of such non-renewal provided that the Executive has not breached the terms
of  this  Agreement.

          Upon  termination of employment by the Executive, for whatever reason,
the  Executive  will  not be entitled to receive any further salary, benefits or
bonuses  and  all  stock  options  which  have  not  then  vested  shall expire.

     3.2     Change  of  Control.  Notwithstanding  any other provisions of this
             -------------------
Agreement,  if  (i) a Change of Control shall occur; and (ii) within twelve (12)
                                                     ---
months  of any such Change of Control, (a) Company (including its successors, if
any)  shall  require Executive to perform his duties and obligations pursuant to
this  Agreement  in a location other than the city of employment of Executive at
the time of such Change of Control, or (b) Company (including its successors, if
any)  shall  materially  change  the  duties,  authority  or responsibilities of
Executive  such  that  the  same  are  materially  inconsistent with the duties,
authority  or  responsibilities  of  Executive  at  the  time  of such Change of
Control,  then  Executive?s  employment  under this Agreement shall be deemed to
have  terminated  for  other than material cause pursuant to Section 3.1 hereof,
and  Executive  shall  be  entitled  to receive salary, benefits and rights with
respect  to  stock  options  as  provided  in  such  Section  3.1.

     "Change  of Control" shall mean the inability of the Symons family to cause
the election of a majority of the members of the Board of Directors of  Goran or
their  respective  successors.

     3.3     Transition  of  Duties.  Should  the  Executive  terminate  his
             ----------------------
employment  with  the Company, the Executive will make himself readily available
to  the Company for a reasonable period of time, at the Company's discretion, to
facilitate  the  transition of information and knowledge to a new executive.  At
the  discretion  of the Company, this period shall be a maximum of six (6) weeks
following  notice  of  termination.

     3.4     Material  Cause:  For  purposes of this Agreement, "material cause"
             ---------------
shall mean only the following:  (i) the committing of any act by Executive which
would  be  considered a criminal offense (other than minor traffic violations or
conviction  of or admission to conversion of Company assets in an amount greater
than  Five  Thousand  Dollars  ($5,000)) under the laws of either Indiana or the
United  States of America; (ii) the failure by Executive to perform his material
duties under this Agreement (excluding nonperformance resulting from Executive's
disability)  or  disobedience  to lawful directives from those persons or bodies
outlined  in  Section  1.2  which  have  the  authority  to determine and direct
Executive's  work  and  activities  where such failure is not cured by Executive
within  fifteen  (15)  days  of his receipt of written notification from Company
specifying  Executive's  failure or breach and the steps the Executive must take
to  cure  that  failure  or  breach;  however,  during the fifteen (15) days the
Company  has  the  option  to put the Executive on leave of absence with pay; or
(iii)  disability  as  provided  in  Section  3.5.

     3.5     Disability: So long as otherwise permitted by law, if Executive has
             ----------
become permanently disabled from performing his duties under this Agreement, the
Company's Chairman of the Board may, in his discretion, determine that Executive
will  not  return to work and terminate his employment as provided herein.  Upon
any  such  termination  for  disability,  Executive  shall  be  entitled to such
disability,  medical,  life  insurance,  and  other benefits as may be generally
provided  for  disabled  employees  of  Company  during  the  period  he remains
disabled.  Permanent  disability  shall  be  determined pursuant to the terms of
Executive's  long  term disability insurance policy provided by the Company.  If
Company  elects  to terminate this Agreement based on such permanent disability,
such  termination  shall  be  deemed  to  be  for  material  cause.

Non-Competition,  Confidentiality  and  Trade  Secrets

     4.1     Agreement  Not To Compete: Until the expiration of the term of this
             -------------------------
Agreement  or  for a period of two (2) years after the date that the Executive's
employment  with  the  Company  terminates,  whichever  period is the later, the
Executive  will  not,  unless he receives prior written approval of the Board of
Directors  of the Company, directly or indirectly engage in any of the following
actions:


<PAGE>
                                                            Draft Dated 11/19/99


     1

          A.     Directly  or  indirectly,  attempt to move or transfer business
greater  than  5%  of  the aggregate amount of gross sales, revenues or earnings
before  taxes  of  the  Company;  or


<PAGE>
                                                             Draft Dated 11/5/99


     1

          B.     Directly  or  indirectly hire, solicit for hire or engage in an
activity  that  would entice employees of the Company to move to a competitor or
to  a  company  or  business  where  the  Executive  has  become  employed;  or


<PAGE>
                                                             Draft Dated 11/5/99


     1

          C.     Intentionally  cause  material  damage  to  the  Company.


<PAGE>

     4.2     Confidentiality:  You shall not knowingly disclose or reveal to any
             ---------------
unauthorized  person,  during  or  after  the  Term,  any  trade secret or other
confidential information relating to the Company or any of its affiliates, which
you  acquired  during  your  term  of  employment,  or  any  of their respective
businesses or principals, and You confirm that such information is the exclusive
property  of the Company and its affiliates.  You agree to hold as the Company's
property  all  memoranda,  books, papers, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, whether made by You or otherwise coming into Your possession and, on
termination  of  Your  employment,  or  on demand of the Company at any time, to
deliver  the  same  to  the  Company.

          Any ideas, processes, characters, productions, schemes, titles, names,
formats,  policies,  adaptations,  plots,  slogans,  catchwords,  incidents,
treatment,  and  dialogue  which  You may conceive, create, organize, prepare or
produce  during  the  period of Your employment and which ideas, processes, etc.
relate  to  any  of the businesses of the Company, shall be owned by the Company
and  its  affiliates  whether  or  not  You should in fact execute an assignment
thereof to the Company, but You agree to execute any assignment thereof or other
instrument  or  document which may be reasonably necessary to protect and secure
such rights to the Company.  Material knowledge and information you bring to the
Company  are  specifically  excluded  from  this  Agreement

5.     Miscellaneous

     5.1     Mutuality.  This  Agreement  is  mutually binding on Goran and SIG.
             ---------

     5.2     Binding  Effect.  This Agreement is binding on all assignees and/or
             ---------------
successors  of  the  Company.

     5.3     Amendment.  This  Agreement  may be amended only in writing, signed
             ----------
by  both  parties.

     5.4     Entire Agreement.  This Agreement contains the entire understanding
             ----------------
of  the parties with regard to all matters contained herein.  There are no other
agreements,  conditions  or  representations,  oral  or  written,  expressed  or
implied,  with  regard  to the employment of Executive or the obligations of the
Company  or  the  Executive.  This  Agreement  supersedes  all  prior employment
contracts  and  non-competition  agreements  between  the  parties.

     5.5     Notices.  Any  notice  required  to  be  given under this Agreement
             -------
shall  be  in writing and shall be delivered either in person or by certified or
registered  mail,  return  receipt  requested.  Any  notice  by  mail  shall  be
addressed  as follows or to such other address as shall be specified in writing:

<PAGE>

          If  to  the  Company,  to:

          Symons  International  Group,  Inc.
          4720  Kingsway  Drive
          Indianapolis,  Indiana  46205
          Attention:  Chief  Executive  Officer


<PAGE>

          If  to  Executive,  to:

          Mr.  Gene  S.  Yerant
          6515  Waggoner  Drive
          Dallas,  TX  75230


     5.6     Waiver  of  Breach.  Any  waiver by either party of compliance with
             ------------------
any  provision  of  this  Agreement  by  the other party shall not operate or be
construed  as  a  waiver  of  any  other  provision of this Agreement, or of any
subsequent  breach  by  such  party  of  a  provision  of  this  Agreement.

     5.7     Validity.  The  invalidity  or unenforceability of any provision of
             --------
this  Agreement  shall  not  affect  the validity or enforceability of any other
provision  of  this  Agreement,  which  shall  remain  in full force and effect.

     5.8     Governing Law.  This Agreement shall be interpreted and enforced in
             -------------
accordance  with  the  laws  of  the  State of Indiana, without giving effect to
conflict  of  law  principles.

     5.9     Headings.  The  headings  of  articles  and  sections  herein  are
             --------
included  solely for convenience and reference and shall not control the meaning
or  interpretation  of  any  of  the  provisions  of  this  Agreement.

     5.10     Counterparts.  This  Agreement  may  be  executed by either of the
              ------------
parties  in  counterparts,  each of which shall be deemed to be an original, but
all  such  counterparts  shall  constitute  a  single  instrument.

     5.11     Survival.  Company's obligations under Section 3.1 and Executive's
              --------
obligations under Section 4 shall survive the termination and expiration of this
Agreement  in  accordance  with  the  specific  provisions  of  those  Sections.

     5.12     Miscellaneous.  No  provision  of  this Agreement may be modified,
              -------------
waived  or discharged unless such waiver, modification or discharge is agreed to
in  writing and signed by You and such officer as may be specifically designated
by the Board.  No waiver by either party hereto at any time of any breach by the
other  party  hereto  of, or compliance with, any condition or provision of this
Agreement  to  be  performed  by  such  other  party shall be deemed a waiver of
similar  or  dissimilar  provisions  or  conditions  at the same or at any prior
subsequent  time.

<PAGE>

     IN  WITNESS  WHEREOF, the parties have executed this Agreement effective as
of  the  10th  day  of  December,  1999.

GORAN  CAPITAL  INC.

By:     _____________________________

Title:  _____________________________


SYMONS  INTERNATIONAL  GROUP,  INC.

By:__________________________________

Title:________________________________


GENE  S.  YERANT
("Executive")


__________________________


<PAGE>
                                     ------
                   AGGREGATE LOSS RATIO  REINSURANCE AGREEMENT

                                     BETWEEN

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                      (HEREAFTER CALLED THE "RETROCEDENT")

                                       AND

                        GRANITE REINSURANCE COMPANY, LTD.
                   (HEREINAFTER CALLED THE "RETROCESSIONAIRE")


                                      INDEX
                                      -----


<TABLE>
<CAPTION>

     ARTICLE               SUBJECT                       PAGE
     -------               -------                       ----



<S>    <C>                                <C>
I      BUSINESS COVERED                   1.
II. .  TERM AND TERMINATION               1.
III    TERRITORY                          1.
IV. .  COVERAGE                           1.
V      LIMIT OF LIABILITY                 1.
VI     PREMIUM                            2.
VII    DEFINITIONS                        2.
VIII   REPORTS AND ACCOUNTING             2.
IX     TRUST FUND                         2.
X . .  COVENANTS                          2.
XI     SERVICE OF SUIT                    3.
XII    ACCESS TO RECORDS                  3.
XIII   ARBITRATION                        3.
XIV    CONFIDENTIALITY                    4.
XV     ERRORS AND OMISSIONS               4.
XVI    FEDERAL EXCISE TAX                 4.
XVII.  FOLLOW THE FORTUNES            .   4.
XVIII  GOVERNING LAW                      5.
XIX    INSOLVENCY                         5.
XX     OFFSET                             5.
XXI .  SEVERABILITY                       6.
XXII   SPECIAL TERMINATION OR SETTLEMENT  6.
XXIII  CURRENCY REVALUATION          .    7.
</TABLE>

01-335447.06     15
01-335447.06
                   AGGREGATE  LOSS RATIO REINSURANCE AGREEMENT

                                     BETWEEN

                    NATIONAL UNION FIRE INSURANCE COMPANY OF
                                 PITTSBURGH, PA.
                     (HEREINAFTER CALLED THE "RETROCEDENT")

                                       AND

                        GRANITE REINSURANCE COMPANY, LTD.
                   (HEREINAFTER CALLED THE "RETROCESSIONAIRE")

    ************************************************************************


                  ARTICLE I                    BUSINESS COVERED
                  ---------

All  liability  assumed  under  Quota Share Reinsurance Agreements from Superior
Insurance  Company and its wholly-owned insurance subsidiaries and Pafco General
Insurance  Company  effective  January  1,  2000.

                  ARTICLE II               TERM AND TERMINATION
                  ----------

Effective  from  12:01  a.m.  Eastern  Standard  Time  January 1, 2000 until all
liabilities  are  finalized.

                       ARTICLE III               TERRITORY
                       -----------

As  per  the  Underlying  Agreements.

                        ARTICLE IV               COVERAGE
                        ----------

The  Retrocessionaire shall be liable separately for each Reinsurance Agreement,
for losses incurred (including all Loss Adjustment Expenses) in excess of a loss
ratio  of  79%.  All  terms  &  conditions  of the Underlying Agreements, copies
attached  hereto,  shall  apply.

                   ARTICLE V               LIMIT OF LIABILITY
                   ---------

The  Retrocessionaire shall be liable separately for each Reinsurance Agreement,
for  18%  of earned premium on each Underlying Agreement, however, not in excess
of  6%  of  the  combined  earned  premium  on  the  Underlying  Agreements.


<PAGE>

ARTICLE  VI               PREMIUM
-----------               -------

The  Retrocedent  shall pay an initial deposit premium of $10,000 within 15 days
of  receipt  of the first cash premium payment received on any of the Underlying
Agreements.  The  final  premium  shall  be  12.5%  of the premium cash payments
received  and  the difference between that premium and the deposit premium shall
be  paid  upon  the  finalization  of  all  liabilities  in  accordance with the
Underlying  Agreements.  In  addition  the  Retrocedent  shall  pay  100% of the
payment received upon the finalization of the liabilities in accordance with the
Underlying  Agreements.  Such payment shall be made within 30 days of receipt of
the  payment  on  the  Underlying Agreements.  However, no payment shall be made
after  the  deposit  premium  unless  all conditions of this agreement have been
complied  with.


                      ARTICLE VII               DEFINITIONS
                      -----------

Loss  Ratio,  shall  be  in  accordance  with  the  Underlying  Agreements.


                  ARTICLE VIII          REPORTS AND ACCOUNTING
                  ------------

The  Retrocedent  shall  forward  to  the Retrocessionaire a copy of all reports
received  in  accordance  with the Underlying Agreements within 10 days of their
receipt.  In  the  event  the paid loss (including all loss adjustment expenses)
are  in  excess  of  79%  of the earned premium on any individual agreement, the
Retrocessionaire  shall pay such excess within 5 days of receipt of the accounts
statement,  however,  not  in  excess  of  the  limit  of  liability.


                       ARTICLE IX               TRUST FUND
                       ----------

The  Retrocessionaire  shall  establish a Trust Account acceptable to regulatory
authorities  of  the  Retrocedent.  The deposit shall be $1 million and shall be
made  upon  the execution of this agreement.  In the event the Loss Ratio on any
of  the  Underlying  Agreements  is in excess of 79%, the Retrocessionaire shall
deposit  additional  securities  to increase the Trust Account, if necessary, to
the  amount  calculated as follows:  the combined results, calculated separately
for each agreement, of the difference between the Loss Ratio and 79%;  plus, the
ratio  of  unallocated  loss adjustment expenses times the earned premium on the
Underlying  Agreements,  however, not in excess of the limit of liability.  Such
deposit  shall  be  made  within  10  days  of  request by the Retrocedent.  All
deposits  shall  be  released  upon  the  finalization  of  all  liabilities.

A letter of credit acceptable to regulatory authorities may be utilized in place
of  a  Trust Account.  In the event the Retrocessionaire or the bank issuing the
letter of credit gives notice of their intent not to extend the Letter of Credit
at  any  anniversary  date,  without  the  approval of the Retrocedent, the full
amount  of the Letter of Credit shall be considered due and payable immediately.


                     ARTICLE X                    COVENANTS
                     ---------

It  is  understood  and  agreed that the Retrocessionaire will not enter any new
reinsurance  agreements
without  approval  of  Retrocedent.


<PAGE>

ARTICLE  XI               SERVICE  OF  SUIT
-----------               -----------------


A.  It is agreed that in the event of the failure of the Retrocessionaire hereon
to  pay  any amount claimed to be due hereunder, the Retrocessionaire hereon, at
the  request  of  the Retrocedent, will submit to the jurisdiction of a court of
competent  jurisdiction  within  the  United  States.  Nothing  in  this  clause
constitutes or should be understood to constitute a waiver of Retrocessionaire's
rights  to  commence  an  action  in  any court of competent jurisdiction in the
United States, to remove an action to a United States District Court, or to seek
a  transfer  of  a  case to another court as permitted by the laws of the United
States  or  of any state in the United States. It is further agreed that service
of process in such suit may be made upon Mendes & Mount, 750 Seventh Avenue, New
York,  New  York  10019-6829, and that in any suit instituted against any one of
them  upon  this Agreement, Retrocessionaire will abide by the final decision of
such  court  or  of  any  Appellate  Court  in  the  event  of  an  appeal.
B.  The  above-named are authorized and directed to accept service of process on
behalf  of  Retrocessionaire  in  any  such  suit and/or upon the request of the
Retrocedent  to  give  a  written  undertaking to the Retrocedent that they will
enter  a  general  appearance upon Retrocessionaire's behalf in the event such a
suit  shall  be  instituted.
C.  Further,  pursuant to any statute of any state, territory or district of the
United  States  which  makes provision therefore, Retrocessionaire hereon hereby
designate  the  Superintendent,  Commissioner  or Director of Insurance or other
officer  specified  for  that  purpose  in  the  statute,  or  his  successor or
successors  in office, as their true and lawful attorney upon whom may be served
any  lawful process in any action, suit or proceeding instituted by or on behalf
of  the Retrocedent or any beneficiary hereunder arising out of this contract of
reinsurance,  and  hereby designate the above-named Mendes & Mount as the person
to  whom  the  said  officer  is  authorized to mail such process or a true copy
thereof.


ARTICLE  XII               ACCESS  TO  RECORDS
------------               -------------------

The  Retrocessionaire,  or  its  duly authorized representative, shall have free
access  at all reasonable times during and after the currency of this agreement,
to  books  and  records maintained by any of the division, department and branch
offices  of  the  Retrocedent  which  are involved in the subject matter of this
Agreement and which pertain to the reinsurance provided hereunder and all claims
made  in  connection  therewith. Notwithstanding the provisions of the preceding
sentence,  if  undisputed  balances  due  from  the  Retrocessionaire under this
Agreement have not been paid for the two most recent reported calendar quarters,
the  Retrocessionaire  shall not have access to any of the Retrocedent's records
relating  to  this  Agreement  without  the specific consent of the Retrocedent.

ARTICLE  XIII               ARBITRATION
-------------               -----------
A.     All  disputes  or  differences  arising out of the interpretation of this
Agreement  shall  be  submitted  to  the  decision of two arbitrators, one to be
chosen  by  each party, and in the event of the arbitrators failing to agree, to
the  decision  of an umpire to be chosen by the arbitrators. The arbitrators and
umpire  shall  be disinterested active or retired executive officials of fire or
casualty  insurance or reinsurance companies or Underwriters at Lloyd's, London.
If  either  of the parties fails to appoint an arbitrator within one month after
being  required  by  the  other party in writing to do so, or if the arbitrators
fail  to appoint an umpire within one month of a request in writing by either of
them  to  do  so,  such  arbitrator  or umpire, as the case may be, shall at the
request  of  either  party be appointed by a Justice of the Supreme Court of the
State  of  New  York.

B.              The  arbitration  proceeding  shall  take place in New York, New
York. The applicant shall submit its case within one month after the appointment
of  the  court  of arbitration, and the respondent shall submit its reply within
one  month  after  the  receipt  of  the  claim.  The arbitrators and umpire are
relieved  from  all judicial formality and may abstain from following the strict
rules  of law. Punitive damages shall not be awarded by the panel against either
party  which  are  apart  from the punitive damages that may be in dispute. They
shall  settle  any  dispute under the Agreement according to an equitable rather
than  a  strictly  legal  interpretation  of  its  terms.

C.           Their  written decision shall be provided to both parties and shall
be  final  and  not  subject  to  appeal.

D.          Each  party  shall  bear  the  expenses  of his arbitrator and shall
jointly  and  equally  share with the    other the expenses of the umpire and of
the  arbitration.

E.          This  Article  shall  survive  the  termination  of  this Agreement.


ARTICLE  XIV               CONFIDENTIALITY
------------               ---------------

All  terms  and  conditions  of this Agreement and any materials provided in the
course  of  inspection  shall  be  kept  confidential by the Retrocessionaire as
against  third parties, unless the disclosure is required pursuant to process of
law  or  unless  the disclosure is to  retrocessionaire's, financial auditors or
governing  regulatory  bodies.  Disclosing  or  using  this  information for any
purpose  beyond  the scope of this Agreement, or beyond the exceptions set forth
above,  is  expressly  forbidden  without  the prior consent of the Retrocedent.


ARTICLE  XV          ERRORS  AND  OMISSIONS
-----------          ----------------------

Any  inadvertent  delay, omission or error shall not relieve either party hereto
from any liability which would attach to it hereunder if such delay, omission or
error  had  not  been  made, provided such delay, omission or error is rectified
immediately  upon  discovery.


ARTICLE  XVI          FEDERAL  EXCISE  TAX
------------          --------------------


A.  The  Retrocessionaire  has  agreed  to  allow  for the purpose of paying the
Federal  Excise  Tax 1% of the premium payable hereon to the extent such premium
is  subject  to  Federal  Excise  Tax.
B.  In  the  event  of  any  return  of  premium  becoming  due  hereunder  the
Retrocessionaire  will  deduct  1%  from  the  amount  of  the  return  and  the
Retrocedent  or  its  agent should take steps to recover the Tax from the United
States  Government.


ARTICLE  XVII          FOLLOW  THE  FORTUNES
-------------          ---------------------

E.     The Retrocessionaire's liability shall attach simultaneously with that of
the  Retrocedent  and shall be subject in all respects to the same risks, terms,
conditions,  interpretations, waivers, and to the same modification, alterations
and  cancellations  as  the  respective  insurances  (or  reinsurances)  of  the
Retrocedent,  the  true intent of this Agreement being that the Retrocessionaire
shall,  in  every  case to which this Agreement applies, follow the underwriting
fortunes  of  the  Retrocedent.

F.     Nothing  shall  in  any  manner  create  any obligations or establish any
rights against the Retrocessionaire in favor of any third parties or any persons
not  parties  to  this  Agreement.


ARTICLE  XVIII          GOVERNING  LAW
--------------          --------------

This Agreement shall be governed by and construed in accordance with the laws of
the  state  of  New  York.




ARTICLE  XIX               INSOLVENCY
------------               ----------

I.     In the event of the insolvency of the Retrocedent, this reinsurance shall
be  payable  directly  to  the  Retrocedent,  or  to  its  liquidator, receiver,
conservator  or  statutory successor immediately upon demand on the basis of the
liability of the Retrocedent without diminution because of the insolvency of the
Retrocedent  or  because  the  liquidator,  receiver,  conservator  or statutory
successor of the Retrocedent has failed to pay all or a portion of any claim. It
is  agreed,  however,  that  the  liquidator, receiver, conservator or statutory
successor  of  the Retrocedent shall give written notice to the Retrocessionaire
of  the  pendency  of  a  claim  against  the  Retrocedent which would involve a
possible  liability  on the part of the Retrocessionaires, indicating the policy
or  bond  reinsured,  within  a reasonable time after such claim is filed in the
conservation  or  liquidation  proceeding  or in the receivership. It is further
agreed  that  during  the  pendency  of  such  claim  the  Retrocessionaire  may
investigate  such  claim  and interpose, at their own expense, in the proceeding
where  such  claim  is  to be adjudicated, any defense or defenses that they may
deem  available  to the Retrocedent or its liquidator, receiver, conservator, or
statutory  successor. The expense thus incurred by the Retrocessionaire shall be
chargeable,  subject  to  the  approval of the Court, against the Retrocedent as
part  of  the expense of conservation or liquidation to the extent of a pro rata
share  of  the benefit which may accrue to the Retrocedent solely as a result of
the  defense  undertaken  by  the  Retrocessionaire.

Retrocedent

ARTICLE  XX               OFFSET
-----------               ------

Each  party  hereto  shall  have,  and may exercise at any time and from time to
time, the right to offset any undisputed balance or balances, whether on account
of  premiums  or  on  account of losses or otherwise, due from such party to the
other  (or,  if  more  than one, any other) party hereto under this Agreement or
under  any  other  reinsurance agreement heretofore or hereafter entered into by
and  between  them,  and  may  offset the same against any undisputed balance or
balances  due  to  the  former  from  the  latter  under  the  same or any other
reinsurance  agreement between them, and the party asserting the right of offset
shall  have  and  may  exercise  such  right  whether  the undisputed balance or
balances  due  to  such  party  from  the other are on account of premiums or on
account  of  losses  or  otherwise  and  regardless  of the capacity, whether as
assuming  insurer  or  as  ceding  insurer,  in which each party acted under the
agreement  or,  if  more  than one, the different agreements involved, provided,
however,  that,  in the event of the insolvency of a party hereto, offsets shall
only  be  allowed  in  accordance  with  the  provisions  of Section 7427 of the
Insurance  Law  of  the  State  of  New  York.
Where  the  Retrocedent is authorized under the Insurance Companies Act (Canada)
to  insure  in  Canada  risks,  for the purpose of this Article, the branch of a
Retrocedent  in Canada shall be considered as a party separate and distinct from
the  Retrocedent  and  the  right  of  offset provided for in this Article shall
belong  to  and  be applied against that branch as though it were a separate and
distinct  party.


ARTICLE  XXI               SEVERABILITY
------------               ------------

If any provision of this Agreement shall be rendered illegal or unenforceable by
the  laws,  regulations  or  public policy of any state, such provision shall be
considered  void  in  such  state,  but  this  shall  not affect the validity or
enforceability of any other provision of this Agreement or the enforceability of
such  provision  in  any  other  jurisdiction.

ARTICLE  XXII     SPECIAL  TERMINATION  OR  SETTLEMENT
-------------     ------------------------------------

SECTION  I  (TERMINATION)
-------------------------

A.  Either  party  may terminate this Agreement upon 45 days notice in the event
that:
5.     The  other  party  should  at  any  time  become insolvent, or suffer any
impairment of capital, or file a petition in bankruptcy, or go into liquidation,
rehabilitation,  or  voluntary  supervision, or have a receiver appointed, or be
acquired  or  controlled  by any other insurance Retrocedent or organization, or
6.     There  is a severance or obstruction of free and unfettered communication
and/or  normal commercial and/or financial intercourse between the United States
of  America and the country in which the Retrocessionaire is incorporated or has
its  principal  office  as  a  result  of  war,  currency  regulations,  or  any
circumstances  arising  out  of  political,  financial  or  economic  emergency.

J.     The Retrocedent may terminate this Agreement forthwith in the event that:

5.     The Retrocessionaire ceases writing reinsurance and elects to run-off its
existing  business.
6.     As  respects  domestic  Retrocessionaires:
Upon  application  of  the  NAIC  Insurance Regulatory Information System (IRIS)
tests  to  the  Retrocessionaire's  quarterly  and  annual statements (which the
Retrocessionaire hereby agrees to furnish to the Retrocedent upon request) it is
found  that  four  (4)  or  more  of the Retrocessionaire's IRIS financial ratio
values  are  outside  of  the  usual  range  established  in  the  IRIS  system.
7.     As  respects  alien  Retrocessionaires:
Upon  review  of the Insurance Solvency International (ISI) Performance Tests as
published  with  respect  to  the  Retrocessionaire (or upon application of such
Performance  Tests  to  the Retrocessionaire's annual financial statements which
the  Retrocessionaire  hereby agrees to furnish to the Retrocedent upon request)
it  is  found that four (4) or more of the Retrocessionaire's ratios are outside
of  the  normal  range  (as  defined  by  the  ISI  standard).

Termination  under A. or B. shall be effected by written notice of cancellation.
The  Retrocedent  will  specify  the mode of payment, i.e., a run-off basis or a
clean-cut  basis  with  portfolio  transfer,  if  applicable.  In  the event the
Retrocedent  elects  a  run-off basis, the Retrocessionaire will fund all of the
outstanding  ceded  liabilities through a Trust Account or by providing a Letter
of  Credit  that  meets  the  requirements  of  the  New  York  State  Insurance
Department.

SECTION  II  (SETTLEMENT)
-------------------------
After  termination  of  this  Agreement under this or any article, including the
natural  expiry  of  the  Agreement,  if  the  Retrocessionaire has any residual
liability  to  the Retrocedent, the Retrocessionaire will, at the request of the
Retrocedent,  furnish to the Retrocedent statements as specified in Section IB.,
above,  and if four or more values are outside of the usual range established in
the IRIS or ISI system (as applicable in accordance with Section IB., above) the
Retrocedent  shall have the option of an immediate settlement of all present and
future  obligations under this Agreement-.in accordance with Section III, below,
or  requiring  the  Retrocessionaire  to  fund  all  of  the  outstanding  ceded
liabilities  through  a  Trust  Account  or by providing a Letter of Credit that
meets  the requirements of the New York State Insurance Department. In the event
the  Retrocedent  elects  the  funding  option,  it  shall  the  notify  the
Retrocessionaire  in writing and the Retrocessionaire shall provide such funding
within  15 days of such notification; however, it is agreed that the Retrocedent
retains  the  right  to require settlement in accordance with Section III at any
subsequent  date.

SECTION  III  (PAYMENT)
-----------------------
A.  Amounts due the Retrocedent or the Retrocessionaire under this Article shall
include  all present and future obligations and shall include unearned premiums,
outstanding  losses  (including  IBNR),  and  all  other  balances.
B.  In  the  event  of  a  clean-cut  termination  with portfolio transfer or an
immediate settlement of all present and future obligations the Retrocedent will,
upon  receipt  of  payment,  provide  to  the Retrocessionaires a full and final
release  of  Retrocessionaire's  liability  under  the  Agreement.
C.  When  requested  by either party an appraisal of outstanding losses and IBNR
shall  be  made  by  an  disinterested  actuary.
D.  Settlement  shall  take  into  account  adjustment  for  net  present value.
This  Article  shall  survive  the  termination  of  this  Agreement



ARTICLE  XXIII          CURRENCY  REVALUATION
--------------          ---------------------

It  is  agreed that underwriting to contractual and/or understanding limits will
be  done  in  terms  of  United  States (U.S.) dollar equivalent on the basis of
exchange  rates in effect at the time of inception of new or renewal business or
at the time an addition to an existing risk takes place. In the event there is a
reduction  in parity value of the U.S. dollar from that existing at the time the
risk  was  written  which results in the contractual and/or understanding limits
being exceeded, the RetrocedentRetrocedent shall be held covered for such excess
until  next renewal of the risk, at which time underwriting will then conform to
the  contractual  and/or understanding U.S. dollar limits in effect at the time.





IN WITNESS WHEREOF: the parties hereto have caused this Agreement to be executed
by  their  authorized  representatives.

IN:  _____________________________  THIS  _____________DAY OF _____________ 2000

NATIONAL  UNION  FIRE  INSURANCE  COMPANY  OF  PITTSBURGH,  PA


BY:  ___________________________

Title:  _________________________






And  in:     this  _____________day  of  _____________  2000


                        GRANITE REINSURANCE COMPANY, LTD.


BY:  _________________________

Title:_______________________
<PAGE>
NUCLEAR  INCIDENT  EXCLUSION  CLAUSE  -  PHYSICAL  DAMAGE - REINSURANCE - U.S.A.
1.     This  Reinsurance  does  not  cover any loss or liability accruing to the
Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any
Pool  of  Insurers  or  Reinsurer  formed  for the purpose of covering Atomic or
Nuclear  Energy  risks.
2.     Without  in  any  way  restricting the operation of paragraph (1) of this
clause,  this  Reinsurance  does not cover any loss or liability accruing to the
Reassured,  directly or indirectly and whether as Insurer or Reinsurer, from any
insurance  against  Physical  Damage  (including  business  interruption  or
consequential  loss  arising  out  of  such  Physical  Damage)  to:
I.     Nuclear  reactor  power  plants  including  all auxiliary property on the
site,  or
II.     Any  other nuclear reactor installation, including laboratories handling
radioactive  materials  in  connection with reactor installations, and "critical
facilities"  as  such,  or
III.     Installations  for fabricating complete fuel elements or for processing
substantial  quantities  of  "special  nuclear  material", and for reprocessing,
salvaging,  chemically  separating, storing or disposing of "spent" nuclear fuel
or  waste  materials,  or
IV.     Installations  other  than those listed in paragraph (2) III above using
substantial  quantities  of  radioactive  isotopes  or other products of nuclear
fission.
3.     Without  in  any way restricting the operations of paragraphs (1) and (2)
hereof,  this  Reinsurance  does  not cover any loss or liability by radioactive
contamination  accruing to the Reassured, directly or indirectly, and whether as
Insurer  or  Reinsurer, from any insurance on property which is on the same site
as  a  nuclear  reactor  power  plant  or  other  nuclear installation and which
normally  would  be  insured  therewith except that this paragraph (3) shall not
operate
(a)     where  Reassured  does  not have knowledge of such nuclear reactor power
plant  or  nuclear  installation,  or
(b)     where  said insurance contains a provision excluding coverage for damage
to  property  caused  by  or  resulting  from radioactive contamination, however
caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only
apply  provided  the said radioactive contamination exclusion provision has been
approved  by  the  Governmental  Authority  having  jurisdiction  thereof.
4.     Without  in any way restricting the operations of paragraphs (1), (2) and
(3) hereof, this Reinsurance does not cover any loss or liability by radioactive
contamination  accruing to the Reassured, directly or indirectly, and whether as
Insurer  or  Reinsurer,  when  such  radioactive contamination is a named hazard
specifically  insured  against.
5.     It  is  understood  and agreed that this clause shall not extend to risks
using  radioactive  isotopes  in  any  form  where  the  nuclear exposure is not
considered  by  the  Reassured  to  be  the  primary  hazard.

6.     The  term  "special  nuclear material" shall have the meaning given it in
the  Atomic  Energy  Act  of  1954  or  by  any  law  amendatory  thereof.
7.     Reassured  to  be  sole  judge  of  what  constitutes:
(a)     substantial  quantities,  and
(b)     the  extent  of  installation,  plant  or  site.
Note:  Without  in any way restricting the operation of paragraph (1) hereof, it
is  understood  and  agreed  that
(a)     all  policies  issued  by  the Reassured on or before 31st December 1957
shall  be free from the application of the other provisions of this Clause until
expiry  date  or  31st  December  1960  whichever first occurs whereupon all the
provisions  of  this  Clause  shall  apply.
(b)     with  respect  to  any  risk  located  in  Canada policies issued by the
Reassured  on or before 31st December 1958 shall be free from the application of
the  other  provisions  of  this  Clause until expiry date or 31st December 1960
whichever  first occurs whereupon all the provisions of this Clause shall apply.
12/12/57
NMA  1119
NOTES:     Wherever  used  herein  the  terms:
"Reassured"     shall be understood to mean "Company", "Reinsured ", "Reassured"
or whatever other term is used in the attached reinsurance document to designate
the  reinsured  company  or  companies.
"Agreement"     shall be understood to mean "Agreement", "Contract", "Policy" or
whatever  other  term  is  used  to designate the attached reinsurance document.
"Reinsurer"  shall be understood to mean "Reinsurer", "Underwriters" or whatever
other  term  is  used  in  the  attached  reinsurance  document to designate the
reinsurer  or  reinsurers.

NUCLEAR  INCIDENT  EXCLUSION  CLAUSE  -  PHYSICAL  DAMAGE - REINSURANCE - CANADA
1.     This  Agreement  does  not  cover  any  loss or liability accruing to the
Reinsured  directly or indirectly, and whether as Insurer or Reinsurer, from any
Pool  of  Insurers  or  Reinsurer  formed  for the purpose of covering Atomic or
Nuclear  Energy  risks.
2.     Without  in  any  way  restricting  the  operation of paragraph 1 of this
clause,  this  Agreement  does  not  cover any loss or liability accruing to the
Reinsured, directly or indirectly, and whether as Insurer or Reinsurer, from any
insurance  against  Physical  Damage  (including  business  interruption  or
consequential  loss  arising  out  of  such  Physical  Damage)  to:
(1)     Nuclear  reactor  power  plants  including all auxiliary property on the
site,  or
(2)     Any  other nuclear reactor installation, including laboratories handling
radioactive  materials  in  connection  with reactor installations, and critical
facilities  as  such,  or
(3)     Installations  for  fabricating complete fuel elements or for processing
substantial  quantities  of  radioactive  materials,  and  for  reprocessing,
salvaging,  chemically separating, storing or disposing of spent nuclear fuel or
waste  materials,  or
(4)     Installations  other  than  those  listed in (3) above using substantial
quantities  of  radioactive  isotopes  or  other  products  of  nuclear fission.
3.     Without  in  any  way  restricting the operation of paragraphs 1 and 2 of
this  clause, this Agreement does not cover any loss or liability by radioactive
contamination  accruing to the Reinsured, directly or indirectly, and whether as
Insurer  or  Reinsurer, from any insurance on property which is on the same site
as  a  nuclear  reactor  power  plant  or  other  nuclear installation and which
normally  would  be  insured  therewith,  except that this paragraph 3 shall not
operate:
(a)     where  the  Reinsured  does  not  have knowledge of such nuclear reactor
power  plant  or  nuclear  installation,  or
(b)     where  the  said  insurance  contains a provision excluding coverage for
damage  to  property  caused  by  or  resulting  from radioactive contamination,
however  caused.
4.     Without  in any way restricting the operation of paragraphs 1, 2 and 3 of
this  clause, this Agreement does not cover any loss or liability by radioactive
contamination  accruing to the Reinsured, directly or indirectly, and whether as
Insurer  or  Reinsurer,  when  such  radioactive contamination is a named hazard
specifically  insured  against.
5.     This  clause  shall not extend to risks using radioactive isotopes in any
form  where  the  nuclear  exposure is not considered by the Reinsured to be the
primary  hazard.
6.     The  term  "radioactive  material"  means  uranium,  thorium,  plutonium,
neptunium,  their  respective derivatives and compounds, radioactive isotopes of
other  elements  and any other substances which may be designated by or pursuant
to  any  law,  act  or  statute,  or  law amendatory thereof as being prescribed
substances  capable  of  releasing  atomic energy, or as being requisite for the
production,  use  or  application  of  atomic  energy.
7.     Reinsured  to  be  sole  judge  of  what  constitutes:
(a)     substantial  quantities,  and
(b)     the  extent  of  installation,  plant  or  site.
8.     Without  in any way restricting the operation of paragraphs 1, 2, 3 and 4
of  this clause, this Agreement does not cover any loss or liability accruing to
the  Reinsured,  directly  or  indirectly,  and  whether as Insurer or Reinsurer
caused:
(a)     by  any  nuclear  incident  as  defined  in  or  pursuant to the Nuclear
Liability  Act  or  any  other nuclear liability act, law or statute, or any law
amendatory thereof or nuclear explosion, except for ensuing loss or damage which
results  directly  from  fire,  lightning  or  explosion  of  natural,  coal  or
manufactured  gas;
by  contamination  by  radioactive  material.
NOTE:  Without  in any way restricting the operation of paragraphs 1, 2, 3 and 4
of  this  clause,  paragraph  8  of this clause shall only apply to all original
contracts  of  the  Reinsured  whether  new, renewal or replacement which become
effective  on  or  after  December  31,  1992.
NMA  1980a  (01.04.96)
Form  approved  by  Lloyd's  Underwriters'  Non-Marine  Association  Limited.
NOTES:     Wherever  used  herein  the  terms:
"Reassured"     shall be understood to mean "Company", "Reinsured ", "Reassured"
or whatever other term is used in the attached reinsurance document to designate
the  reinsured  company  or  companies.
"Contract"  shall  be  understood  to  mean "Agreement", "Contract", "Policy" or
whatever  other  term  is  used  to designate the attached reinsurance document.
"Reinsurer"  shall be understood to mean "Reinsurer", "Underwriters" or whatever
other  term  is  used  in  the  attached  reinsurance  document to designate the
reinsurer  or  reinsurers.





<PAGE>
                               GORAN CAPITAL INC.

                          ANNUAL REPORT TO SHAREHOLDERS

                                DECEMBER 31, 2001




CORPORATE  PROFILE

Goran  Capital  Inc. ("Goran") owns subsidiaries engaged in a number of business
activities.  The  most extensive of these is the property and casualty insurance
business  conducted  in the United States, Canada and Barbados, on both a direct
and  reinsurance basis through a number of subsidiaries collectively referred to
in  this report as Goran.  The common stock of Goran trades on The Toronto Stock
Exchange  under  the  symbol  "GNC"  and the OTC Bulletin Board under the symbol
"GNCNF.OB".

Goran owns 73.1% of Symons International Group, Inc. ("SIG") which trades on the
OTC  Bulletin  Board  under  the symbol "SIGC.OB".  SIG owns insurance companies
principally  engaged  in  the  nonstandard  automobile  insurance  market.

Superior  Insurance  Company  and  Pafco  General  Insurance  Company underwrite
nonstandard  automobile  insurance in the United States.  Nonstandard automobile
insurance  is  marketed  and  sold through independent agents to drivers who are
unable  to  obtain  coverage  from  insurers  at  standard  or  preferred rates.

Prior  to 2001, the Company was also engaged in the crop insurance business.  On
June  6,  2001,  the Company exited the crop insurance business when it sold the
crop  insurance  operations  of  IGF  Insurance  Company  to  a  third  party.
Accordingly,  the  financial  statements  included  in  this  report reflect the
results  of  the  crop  insurance  segment  as  "discontinued  operations."

Granite  Reinsurance  Company Ltd. underwrites finite (limited risk) reinsurance
in  Bermuda,  the  United  States  and  Canada.


All  dollar  amounts  shown in this report are in U.S. currency unless otherwise
indicated.  The  conversion  rates  between  U.S.  and  Canadian  dollars  for
transactions  occurring  during  the year 2001 was 1.5490 and for balances as of
December  31,  2001  the  rate  is  1.5911.

<TABLE>
<CAPTION>



TABLE OF CONTENTS                                                                          Page
<S>                                                                                         <C>
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  2
President's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
Management's Discussion and Analysis of Financial Condition and Results of Operations. . . .  6
Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 21
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Stockholder Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Board of Directors and Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Subsidiaries and Branch Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

FINANCIAL  HIGHLIGHTS  (1)
(In  thousands,  except  per  share  data)
For  the  years  ended  December  31,

                                                                            2001       2000       1999       1998       1997
                                                                          ---------  ---------  ---------  ---------  ---------
<S>                                                                       <C>        <C>        <C>        <C>        <C>
Gross premiums written . . . . . . . . . . . . . . . . . . . . . . . . .  $193,186   $182,099   $236,401   $303,745   $322,581

Net operating earnings (loss) from continuing operations (2) . . . . . .  $(20,761)  $(12,417)  $(49,883)  $    471   $ 11,680

Net earnings (loss) from discontinued operations . . . . . . . . . . . .  $ (2,156)  $(17,041)  $(15,373)  $ (9,421)  $ 10,015
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . . . .  $(34,093)  $(80,265)  $(62,373)  $(11,936)  $ 12,438

Basic operating earnings (loss) per share from continuing operations (2)  $  (3.64)  $  (2.13)  $  (8.49)  $   0.08   $   2.09

Basic earnings (loss) per share from discontinued operations . . . . . .  $  (0.38)  $  (2.93)  $  (2.61)  $  (1.61)  $   1.79
Basic earnings (loss) per share. . . . . . . . . . . . . . . . . . . . .  $  (5.99)  $ (13.79)  $ (10.61)  $  (2.04)  $   2.22
Stockholders' equity (deficit) . . . . . . . . . . . . . . . . . . . . .  $(89,146)  $(72,668)  $(12,887)  $ 49,725   $ 60,332
Return on average equity (3) . . . . . . . . . . . . . . . . . . . . . .       N/A        N/A        N/A     (21.7%)      23.1%
Book value (deficit) per share . . . . . . . . . . . . . . . . . . . . .  $ (15.65)  $ (12.48)  $  (2.19)  $   8.51   $  10.79
Market Value per share . . . . . . . . . . . . . . . . . . . . . . . . .  $   0.61   $   0.34   $   2.00   $  10.38   $  29.41
<FN>

1)     The  financial  statements of the Company have been prepared in accordance with Canadian GAAP presented in U.S. dollars.
2)     Operating  earnings and per share amounts exclude amortization, interest, taxes, deferred income, realized capital gains
       and  losses,  minority  interest,  and  any  extraordinary  items.
3)     Return  on  average equity cannot be calculated due to the accumulated deficit in stockholders' equity in 2001 and 2000.
</TABLE>




<TABLE>
<CAPTION>



CORPORATE STRUCTURE
<S>                    <C>              <C>                   <C>

GRANITE  REINSURANCE   SYMONS  INT'L    GRANITE  INSURANCE    SYMONS  INT'L
COMPANY  LTD           GROUP,  INC      COMPANY               GROUP (FLORIDA) INC
BARBADOS               INDIANA          CANADA                FLORIDA
100% OWNED             73.1 % OWNED     100% OWNED            100%  OWNED

        SUPERIOR  INSURANCE       IGF  HOLDING,  INC
      GROUP MANAGEMENT  INC

       SUPERIOR INSURANCE         IGF  INSURANCE  COMPANY
          GROUP,  INC.

 PAFCO  GENERAL        SUPERIOR  INSURANCE
INSURANCE  COMPANY          COMPANY

       SUPERIOR  AMERICAN   SUPERIOR  GUARANTY
       INSURANCE  COMPANY   INSURANCE  COMPANY
</TABLE>




<PAGE>

President's  Report  to  Shareholders
-------------------------------------

Dear  Fellow  Shareholder:

Our  company  is  principally  engaged  in  the  insurance  business through its
investments  in  various  companies  located  in  the United States, Canada, and
Barbados.  The  results  of  our  operations  have,  in  general,  been  very
disappointing, principally due to poor industry conditions.  However, one of our
investments  has  continued  to  do  well.

Granite  Reinsurance  Company  Ltd. (Granite Re) started in 1990 and has been an
exceptional  success,  making a profit in almost every year since its inception.
Total  earnings  since  inception are approximately $24.2 million.  Recently, we
filed to have Granite Re rated by A.M. Best and expect to promote the company to
a  broader  geographic  area  during  a  hardening  market.

Granite  Insurance  Company  (Granite) is a Canadian-licensed insurance company.
We  sold  all  of  its business in 1990 in order to focus on our US investments.
Nonetheless,  Granite  has  been profitable in most of the years since it ceased
writing  business  in 1990.  Recently, the Canadian property/casualty market has
experienced  more  attractive  pricing  and  we  see  numerous opportunities for
writing  profitable  business.  We  are presently working with the government of
Canada  to  reactivate  Granite  as  an  operating  property/casualty  company.

The  Company's  investment  in the US operations started off exceptionally well,
but  over the last four years has done very poorly.  The non-standard automobile
insurance  industry  started  to  deteriorate  in  1998,  seeing combined ratios
exceeding  110%  by  2000.  Being a highly-leveraged non-standard auto insurance
writer, losses were much greater than most of our competitors.  When business is
good,  it  is  very  good  and  when  it  is  bad,  it  is  very  bad.

We  replaced  all  of  senior  management  and  most of middle management of the
non-standard  operations  during  2000  and  early  2001  Under new management's
guidance,  we've  taken  the  following  steps:

-     reduced  premium  volume  to  write  in  more  profitable  areas
-     raised  premium  rates  (by  almost  30%  since  the  beginning  of  2000)
-     opened  regional offices to improve service and enhance claims settlements
-     designed  and  implemented  a  new  operating  system
-     improved  staff  and  financial  management
-     improved  claims  management

We've  done  everything  that  common  sense tells us to do.  Unfortunately, the
turnaround  has  not  been as quick as we expected.  We are hopeful that results
will  prove  positive  in  2002.

IGF  Insurance Company (IGF) was the fourth largest crop insurance company until
certain  brokers  in  California  and a third-party insurance company caused the
crop operation to lose substantial amounts of money under a product called AgPi.
While we have lawsuits pending against the brokers and the third-party insurance
company,  the  devastation to IGF's surplus put it in a position where we had to
dispose  of  the  operations.  Specifically,  IGF  sold  its  book  of business,
operating  systems,  and furniture and fixtures to Acceptance on June 6, 2001 in
exchange  for  approximately  $21  million.

As  part  of  the Acceptance transaction, Symons International Group, Inc. (SIG)
and  a number of its employees entered into stringent non-competition agreements
which  essentially bar the parties from re-entering the crop insurance business.

Also as part of the Acceptance transaction, Goran Capital Inc. (Goran) and three
of its key principals entered into equally stringent non-competition agreements.
In  return,  Goran  received  $4.5  million  in  non-compete  compensation.

Also  as  part  of  the  Acceptance  transaction, Granite Re took on reinsurance
obligations  of  the  crop  insurance  program  of Acceptance, including the IGF
former book, for the next five years.  In order to increase the cash paid to IGF
at closing, Granite Re undertook a $9 million guarantee for the full five years.
In  return,  Granite  Re  will  receive  $3  million  a  year.

Overall,  the  sale of the crop insurance activities was a sad day as we enjoyed
the  business.  However, it has allowed us to run off the crop insurance company
while  continuing  our  efforts to recover monies, through the legal process, in
compensation for the damages caused by certain of the aforementioned parties.  I
remain  hopeful  that  right  will  overcome  wrong  and  that  we  will receive
substantial  damage  awards  as  a  result  of  our  lawsuits.

Granite  is  involved in an action against Toronto Dominion Bank for recovery of
monies  improperly taken from Granite in 1989.  We expect a favorable resolution
of  this  lawsuit  within  the  next  couple  of  years  which would result in a
substantial  increase  in  the  shareholder  value  of  Goran.

The  Company's  non-standard auto operations, now concentrated in the key states
of California, Florida, Virginia, Colorado, and Georgia, are migrating to a new,
internally-built  operating  system that will reduce overhead costs and bad debt
expenses  and  improve  our  loss  ratios.  We expect to finally see a return to
profitable  operating  results  from  our  non-standard  auto  segment.

Goran  invested  $150,000  in December, 2001 to acquire the assets of a managing
general agency in Boca Raton, Florida.  The agency, now doing business as Symons
International  Group  (Florida),  Inc.  (SIGF) has 6 staff and for 2001 brokered
over  $9 million in gross written premiums.  SIGF handles the needs of insurance
agents  who  require  insurance  coverage  that is unique or for which the agent
lacks  capacity.  Goran is continuing to seek out new opportunities to invest in
or  expand  its  non-standard  reinsurance  and  MGA  business.

As  a  final  note,  I  wish  to  thank  all  the  employees  of  Goran  and its
subsidiaries,  which  now  number 338, and the Goran and SIG Boards of Directors
for  working  so  diligently  over the last four years in our efforts to improve
results.


Yours  truly,

Alan  G.  Symons
President  and  Chief  Executive  Officer

<PAGE>

SELECTED  CONSOLIDATED  HISTORICAL  FINANCIAL  DATA
OF  GORAN  CAPITAL  INC.

The  selected  consolidated  financial  data presented below is derived from the
consolidated  financial  statements  of the Company and its Subsidiaries for the
year ended December 31.  This information should be read in conjunction with the
consolidated financial statements of the Company and the notes thereto, included
elsewhere  in  this  Report.  All information is in thousands, except share, per
share,  and  ratio  data.


<TABLE>
<CAPTION>

                                               2001       2000       1999       1998       1997
                                             ---------  ---------  ---------  ---------  ---------
<S>                                          <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
                                                   (4)
Gross Premiums Written. . . . . . . . . . .  $193,186   $182,099   $236,401   $303,745   $322,581
Net Premiums Earned . . . . . . . . . . . .   108,197    145,532    261,800    281,276    255,746
Fee Income. . . . . . . . . . . . . . . . .    12,425     14,239     15,335     16,431     15,545
Net Investment Income . . . . . . . . . . .     6,998     12,171     13,125     13,126     12,586
Income (loss) from Continuing Operations. .  $(31,937)  $(63,224)  $(47,000)  $ (2,515)  $  2,423
Income (loss) from Discontinued Operations.  $ (2,156)  $(17,041)  $(15,373)  $ (9,421)  $ 10,015
                                             ---------  ---------  ---------  ---------  ---------
Net Income (Loss) . . . . . . . . . . . . .  $(34,093)  $(80,265)  $(62,373)  $(11,936)  $ 12,438
                                             =========  =========  =========  =========  =========

PER COMMON SHARE DATA:
Basic Income (Loss) from Continuing
  Operations. . . . . . . . . . . . . . . .  $  (5.61)  $ (10.86)  $  (8.00)  $  (0.43)  $   0.43
Basic Income (loss) from Discontinued
  Operations. . . . . . . . . . . . . . . .  $  (0.38)  $  (2.93)  $  (2.61)  $  (1.61)  $   1.79
Basic Net  Income (Loss). . . . . . . . . .  $  (5.99)  $ (13.79)  $ (10.61)  $  (2.04)  $   2.22
Basic Weighted Average Shares Outstanding .     5,696      5,822      5,876      5,841      5,591

GAAP RATIOS:
Loss and LAE Ratio (1). . . . . . . . . . .      88.0%      78.2%      92.6%      81.2%      76.0%
Expense Ratio (2) . . . . . . . . . . . . .      37.7%      38.7%      31.5%      23.3%      24.3%
Combined Ratios (3) . . . . . . . . . . . .     125.7%     116.9%     124.1%     104.5%     100.3%

CONSOLIDATED BALANCE SHEET DATA:
Investments . . . . . . . . . . . . . . . .  $113,795   $148,890   $225,168   $236,144   $231,130
Total Assets. . . . . . . . . . . . . . . .   503,955    440,032    519,922    570,989    560,848
Losses and LAE. . . . . . . . . . . . . . .    84,876    113,149    157,425    140,484    135,087
Trust Preferred Securities. . . . . . . . .    94,540    112,000    135,000    135,000    135,000
Total Shareholders' Equity (Deficit). . . .   (89,146)   (72,668)   (12,887)    49,725     60,332
Book Value (Deficit) Per Share. . . . . . .  $ (15.65)  $ (12.48)  $  (2.19)  $   8.51   $  10.79

<FN>

(1)     Loss  and  LAE  ratio:  The ratio of loss and loss adjustment expenses incurred during the
        period,  as  a  percentage  of  premiums  earned.
(2)     Expense  ratio:  The ratio of policy acquisition, general and administrative expenses less
        billing  fees,  as  a  percentage  of  premiums  earned.
(3)     Combined  ratio:  The sum of the loss and LAE ratio plus the expense ratio as a percentage
        of  premiums  earned.
(4)     Loss  from  continuing operations for the year 2000 includes a write-down of $33.5 million
        for  goodwill.  See  Note  6  to the consolidated financial statements for additional information.
</TABLE>

<PAGE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
AND  RESULTS  OF  OPERATIONS

FORWARD-LOOKING  STATEMENTS

All  statements, trend analyses, and other information herein contained relative
to  markets for the Company's products and/or trends in the Company's operations
or  financial  results,  as  well  as  other  statements including words such as
"anticipate,"  "could,"  "feel(s),"  "believes,"  "plan,"  "estimate," "expect,"
"should,"  "intend,"  "will,"  and  other  similar  expressions,  constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995.  These  forward-looking statements are subject to known and unknown risks,
uncertainties  and other factors which may cause actual results to be materially
different  from  those  contemplated  by  the  forward-looking statements.  Such
factors include, among other things:  (i) general economic conditions, including
prevailing  interest  rate  levels  and  stock  market performance; (ii) factors
affecting  the Company's nonstandard automobile operations such as rate increase
approval,  policy  renewals, new business written, and premium volume; and (iii)
the  factors  described  in  this  section  and  elsewhere  in  this  report.

OVERVIEW

Goran  Capital,  Inc.  (the  "Company" or "Goran") owns insurance companies that
underwrite  and  market  nonstandard private passenger automobile insurance. The
Company's  principal  insurance company subsidiaries are Pafco General Insurance
Company  ("Pafco"),  Superior  Insurance  Company ("Superior") and IGF Insurance
Company  ("IGF").

STRATEGIC  ALIGNMENT

As  previously  announced, in the fourth quarter of 2000, management initiated a
strategic  review  of  the  Company's U.S. operations. This review resulted in a
plan  to  divest of the Company's crop insurance segment, allowing management to
focus  on  nonstandard automobile insurance.  In June 2001, the Company sold its
crop  insurance  segment  and  adopted  a  plan  to wind-down the remaining crop
insurance  segment  obligations.

Accordingly,  financial  results  of the crop insurance segment are presented as
discontinued  operations  in  the  Company's  financial  statements.  Continuing
operations  of  the  Company  consist  primarily  of  the nonstandard automobile
insurance  segment.

NONSTANDARD  AUTOMOBILE  INSURANCE  OPERATIONS

Pafco,  Superior,  Superior  Guaranty  Insurance  Company ("Superior Guaranty"),
Superior  American  Insurance Company ("Superior American") and IGF, are engaged
in  the  writing  of  insurance  coverage  for  automobile  physical  damage and
liability  policies  for nonstandard risks.  Nonstandard risk insureds are those
individuals  who are unable to obtain insurance coverage through standard market
carriers due to factors such as poor premium payment history, driving experience
or  violations,  particular  occupation  or type of vehicle.  The Company offers
several  different  policies that are directed towards different classes of risk
within  the  nonstandard market.  Premium rates for nonstandard risks are higher
than  for standard risks.  Since it can be viewed as a residual market, the size
of  the  nonstandard  private passenger automobile insurance market changes with
the  insurance  environment,  for  example, expanding when the standard coverage
becomes  more  restrictive.  Nonstandard  policies  have relatively short policy
periods  and  low  limits  of liability.  Due to the low limits of coverage, the
period  of  time  that  elapses  between the occurrence and settlement of losses
under nonstandard policies is shorter than many other types of insurance.  Also,
since  the nonstandard automobile insurance business typically experiences lower
rates  of  retention  than  standard  automobile  insurance,  the  number of new
policyholders  underwritten  by  nonstandard  automobile insurance carriers each
year  is substantially greater than the number of new policyholders underwritten
by  standard  carriers.

<PAGE>
RESULTS  OF  OPERATIONS

CONSOLIDATED  OVERVIEW

Years  Ended  December  31,  2001  and  2000

For  the  year  2001,  the  Company  reported a loss on continuing operations of
$(31,937,000)  or  $(5.61)  per  share  (basic  and diluted). Loss on continuing
operations  for the year 2000 was $(63,224,000) or $(10.86) per share (basic and
diluted),  which  includes  a  one-time  write down of goodwill in the amount of
$33,464,000. Loss before income taxes and distributions on minority interest was
$(21,568,000)  and  $(53,347,000)  for  2001  and  2000, respectively. Operating
earnings  (loss)  from  continuing  operations, measured as income (loss) before
amortization,  interest,  taxes,  realized capital gains and losses and minority
interest  was $(20,761,000) or $(3.64) per share (basic and diluted) in 2001 and
$(12,417,000)  or  $(2.13)  per share in 2000 (basic and diluted).  Premium rate
increases,  reductions  in  the expense ratio, and the decrease in gross written
premiums  are  the  primary  factors contributing to the reduction in losses for
2001.

The  loss  from  discontinued  operations was $(2,156,000) and $(17,041,000) for
2001  and 2000, respectively.  Underwriting losses and operating costs in excess
of  original  estimates  contributed  to  the  losses  in  2001.

The  Company  is  continuing  to  seek  and  implement  rate increases and other
underwriting  actions  to  achieve  profitability. A number of systems have been
automated  and  service  problems have been eliminated or significantly reduced.
Although  the  Company  has  taken  a  number  of  actions  to  address  factors
contributing  to  these  past  losses,  there can be no assurance that operating
losses  will  not  continue.  See  "Liquidity and Capital Resources" for further
discussion of recent trends and uncertainties that are reasonably likely to have
a  material  effect  on  the  Company's  financial  condition  and  results  of
operations.

Years  Ended  December  31,  2000  and  1999

For  the  year  2000,  the  Company  reported a loss on continuing operations of
$(63,224,000)  or  $(10.86)  per  share  (basic  and  diluted)  which includes a
one-time  write  down  of  goodwill  in  the  amount  of  $33,464,000.  Loss  on
continuing  operations for the year 1999 was $(47,000,000) or $(8.00) per share.
Loss before income taxes and distribution on minority interest was $(53,347,000)
and  $(52,033,000)  for  2000 and 1999, respectively.  Operating earnings (loss)
from  continuing  operations,  measured  as  income/(loss)  before amortization,
interest,  taxes,  realized capital gains and losses, minority interest, and any
extraordinary  items, was $(12,417,000) or $(2.13) per share (basic and diluted)
in  2000  and  $(49,883,000)  or  $(8.49) per share in 1999 (basic and diluted).
Premium  rate  increases  and  reductions in loss ratios are the primary factors
contributing  to  the  reduction  in  losses  of  2000.

Discontinued  operations  reported losses of $(17,041,000) and $(15,373,000) for
2000  and 1999, respectively.  Underwriting losses and operation costs in excess
of  administrative  expense  reimbursements  contributed  to  the  losses.

GORAN  CAPITAL  INC.

Goran  Capital  Inc.  is  an  investment  holding  company that holds subsidiary
investments  and  engages  in  the  identification  and  evaluation of potential
investment  opportunities.  The  net  loss  for 2001 and 2000 was $5,187,000 and
$1,252,000,  respectively.  The  increased  loss is attributable mainly to legal
costs  and  an  increase in reserves for uncollectibility of certain loans.  Net
cash  flow  for  2001  and  2000  was  $2,421,000  and  $(16,000), respectively.

SYMONS  INTERNATIONAL  GROUP,  INC.

Years  Ended  December  31,  2001  and  2000

Gross  Premiums  Written

Gross  premiums  written  have  decreased  7.7% or $13,369,000 in 2001 from 2000
levels.  Premium  rate  increases  of  approximately  24.8%  were  implemented
throughout  2001  that were offset by a reduction in policies in force of 23.3%.
In  addition,  the  decline  in gross premiums resulted from SIG exiting certain
highly  competitive  markets  and  instituting  other  underwriting  initiatives
intended  to  increase  profitability, which had the effect of reducing premium.
Regulatory  action  in  certain  states  also  limited  premium  written.

Net  Premiums  Written

Net  premiums  written  represent  the portion of premiums retained by SIG after
consideration  for  risk  sharing  through reinsurance contracts. As a result of
losses in SIG's insurance subsidiaries and to manage overall risk retention, SIG
entered  into  a  reinsurance  agreement  to cede a portion of its gross written
premiums to a third party. During 2001, SIG ceded approximately 54% of its gross
written  premiums  on  new and renewal business, under a quota share reinsurance
contract that was effective January 1, 2000, to the reinsurers. In addition, SIG
ceded  a  portion  of its unearned premium reserve bringing the total cession to
79%  in  2001.

Net  Premiums  Earned

Net  premiums  earned decreased 44.1% or $60,759,000 for the year ended December
31,  2001  as  compared  to the same period in 2000. Premiums are earned ratably
over  the  term  of  the  underlying  insurance  contracts. The reduction in net
premiums earned reflects the overall reduction in gross premiums written and the
increase  in  ceded  premiums.

Fee  Income

Fee  income  is derived from installment billings and other services provided to
policyholders.  For the year ended December 31, 2001, fee income decreased 13.0%
or  $1,845,000.  The  reduction  in fee income is attributed to the reduction of
insurance policies in force of 23.3% and the overall decline in written premium.

Net  Investment  Income

Net investment income decreased 37.6% or $3,788,000 in 2001 as compared to 2000.
This decrease is reflective of the decline in invested assets during a period of
declining  premiums  and the liquidation of investments to pay prior year losses
settled in 2001. Furthermore, return on investments deteriorated due to a highly
volatile  market  dominated  by  unfavorable  economic  conditions  due  to  the
worldwide  recession  and  fallout  from  the  September 2001 terrorist attacks.

Net  Realized  Capital  Losses

Net  realized  capital  losses  were  $(1,185,000)  in  2001  as compared to net
realized  capital  losses  of $(5,972,000) in 2000. Capital losses resulted from
the  liquidation  of longer duration fixed income securities in 2001 in order to
rebalance  the  investment  activities  in  the  portfolio.  These  transactions
resulted  in  higher  cash  proceeds  that  were  reinvested in shorter duration
investment  instruments.  Capital losses were also realized due to the continued
liquidation  of  investments  to  fund  operations  and  claim  payments  under
unfavorable  market  conditions.

Losses  and  LAE

The  loss  and LAE ratio for SIG for the year ended December 31, 2001, was 91.5%
of  net  premiums earned as compared to 82.3% of net premiums earned for 2000. A
portion  of  LAE,  unallocated  loss adjustment expense ("ULAE") is not ceded as
part  of  the  quota share reinsurance contract mentioned above and accounts for
approximately  four  percentage  points of the increased loss ratio in 2001 with
the  remainder  of  the  increase  due  to  adverse  current  loss  expense.

Policy  Acquisition  and  General  and  Administrative  Expense

SIG  reduced  policy acquisition and general and administrative expenses for the
year  2001  to  $40,535,000  from  the 2000 level of $67,538,000, a reduction of
approximately  40%.  This  reduction  reflects  the  decline  in  gross  written
premiums,  an  increase  in  ceding  commissions associated with the quota share
reinsurance  contract  and overall operating expense reduction initiatives. As a
percentage  of  gross premiums earned, the Company experienced a decrease in its
operating expense ratio, net of fee income, from 38.8% in 2000 to 36.7% in 2001.
This  decrease  in  the expense ratio is the result of reduced operating expense
initiatives  and  an increase in ceding commissions earned under the quota share
reinsurance  contract.


<PAGE>
Amortization  of  Intangibles

Amortization  expense  decreased  by  $34,806,000  in 2001, as compared to 2000.
This  reflects  the  write  down  of  goodwill  to  zero  at  December 31, 2000.

Income  Taxes

At  December  31,  2001 SIG's net deferred tax assets are fully offset by a 100%
valuation  allowance  that  resulted  in  no  tax  benefit  in  2001.

Years  Ended  December  31,  2000  and  1999

Gross  Premiums  Written

Gross  premiums written decreased 26.2% or $61,940,000 in 2000 from 1999 levels.
Premium  rate  increases  of  approximately 14% were implemented throughout 2000
that  were  offset  by  a  29%  reduction in policies in force. The reduction in
written  premiums  was  further affected by a shift during the second quarter of
2000  to  writing  a higher mix of six-month policies while management evaluated
rate  adequacy.

Net  Premiums  Written

Net  premiums  written  represent  the portion of premiums retained by SIG after
consideration  for  risk  sharing through reinsurance contracts.  As a result of
losses  in  SIG's insurance subsidiaries and to manage overall risk retention, a
reinsurance  agreement  was  negotiated  to  cede a portion of the gross written
premiums  to  a  third  party.  SIG ceded approximately 45% of its gross written
premiums  in  2000  under  a quota share reinsurance contract that was effective
January  1,  2000.

Net  Premiums  Earned

Premiums are earned ratably over the term of the underlying insurance contracts.
The  reduction  in net premiums earned is reflective of the overall reduction in
gross  premiums  written  and  the  increase  in  ceded  premiums.

Fee  Income

Fee  income  is derived from installment billings and other services provided to
policyholders.  The  reduction  in  fee  income  of  6.9%  in  the  year 2000 is
attributed to the 29% reduction of insurance policies in force, offset by earned
fee  rate  increases  from  1999.

Net  Investment  Income

Net investment income decreased 17.7% in 2000 as compared to 1999. This reflects
the  decline  in  invested  assets during a period of declining premiums and the
payout  of  prior  year  losses  when  settled  in  2000.

Net  Realized  Capital  Losses

Net  realized  capital losses were $5,972,000 in 2000 as compared to $324,000 in
1999.  Capital  losses  were  realized  in  2000  due  to  the  liquidation  and
reinvestment  of  a  portion  of the equity portfolio during the year as well as
continued  liquidation  of  investments  to  fund  operations during a period of
declining  premiums.

Losses  and  LAE

The  loss  and  LAE ratio was 82.3% for 2000 as compared to 92.7% for 1999.  SIG
estimates  the  accident  year  2000  gross  loss  and  LAE ratio to be 85.6% as
compared to its current estimate of 84.8% for accident year 1999.  Accident year
1999  reserves  developed  favorably  during  2000.  As  a  result,  the current
estimate for accident year 1999 is 4.5 percentage points lower than projected as
of  year-end  1999. SIG also experienced favorable development on accident years
1998  and  prior.


<PAGE>
Policy  Acquisition  and  General  and  Administrative  Expense

SIG  reduced  policy  acquisition  and general and administrative expenses 28.1%
during  2000 to $67,538,000 from $93,922,000 in 1999.  This reduction reflects a
26.2%  decline  in  gross  written  premiums,  an increase in ceding commissions
associated  with  the  quota  share  reinsurance contract, and overall operating
expense  reductions.  As a percentage of net premiums earned, SIG experienced an
increase in its operating expense ratio net of billing fees from 31.6% to 38.8%.
This  increase  was  the  result  of SIG ceding 45% of its gross written premium
under  a  quota  share  reinsurance  contract  and  the  44.8% decline in earned
premiums.

Amortization  of  Intangibles

Amortization  expense  increased  in  2000  due  to  an impairment charge on the
carrying  value  of  goodwill  resulting  from  the  Superior  Insurance  Group
Management,  Inc.  ("Superior  Group  Management")  acquisition  in  1997.  The
impairment  charge  and amortization expense recognized in 2000 was $34,806,000.
Amortization  of debt acquisition costs of $171,000 comprises the balance of the
year  2000  expense.

Income  Taxes

The  variance  in  the  rate  from the federal statutory rate of 35%, before the
effect  of  a  valuation  allowance  on deferred tax assets, is primarily due to
nondeductible  goodwill  amortization  and  alternative  minimum  taxes.

At  December  31,  2000  SIG's  net  deferred  tax assets were fully offset by a
valuation  allowance.  Therefore,  the Company has not recognized the benefit of
tax losses carried forward.  Earnings in future periods will result in no income
tax  expense  until  the  current  operating  loss  carryforwards  are utilized.

SYMONS  INTERNATIONAL  GROUP  (FLORIDA)  INC.

Goran's  wholly-owned  subsidiary,  Symons  International  Group  (Florida) Inc.
("SIGF")  is engaged in several lines of business, including a property/casualty
insurance  brokerage  and  a  flood  insurance  brokerage.  The  property
casualty/insurance  brokerage  operations were acquired effective on November 1,
2001  via  an  asset  purchase  transaction.

Historically,  SIGF  was a specialized surplus lines underwriting unit.  By late
1998,  SIGF's operations no longer fit the Company's strategic operating plan of
concentrating  on  the  business  segments  of  nonstandard  automobile  and
reinsurance.  Accordingly,  the  majority  of  the  book  of  business  was sold
effective  January  1, 1999.  A small amount of premium remained after the sale.
The premium volume from this operation was $1,218,000, $1,619,000 and $6,427,000
as of December 31, 2000, 1999 and 1998, respectively.  The net loss was $48,000,
$861,000  and  $2,937,000  as of December 31, 2000, 1999 and 1998, respectively.

GRANITE  INSURANCE  COMPANY

Granite Insurance Company ("Granite") is a Canadian federally licensed insurance
company  which  is  presently  servicing  its  investment  portfolio  and  seven
outstanding  claims.  Granite  stopped writing business on December 31, 1989 and
sold  its  book  of  Canadian  business  in  June  1990.  The outstanding claims
continue  to  be  settled  in  accordance  with  actuarial estimates.  Granite's
invested  assets  decreased to $2.5 million from $2.8 million in 2000.  This was
the  result of claims paid for the year.  Total net outstanding claims decreased
to  $88,000  in  2001 from $243,000 in 2000.  It is expected that the run-off of
outstanding  claims  will  be completed in 2002.  Granite recorded a net gain of
$827,000  in 2001, a net loss of $117,000 in 2000, and a net gain of $179,000 in
1999.

GRANITE  REINSURANCE  COMPANY  LTD.

Granite  Reinsurance Company Ltd. ("Granite Re") is managed by Atlantic Security
Ltd.  of  Bermuda  and  a  corporate  services  management  company in Barbados.
Granite  Re  underwrites  finite  risk,  stop  loss and quota share reinsurance,
through  various programs in Bermuda, the United States and Canada. During 2001,
2000  and  1999,  Granite  Re  participated in certain quota share and stop loss
programs  for  the  now  discontinued  crop operations.   These programs were in
accordance  with  third  party  placements.


<PAGE>
Net  premiums earned were $31.5 million in 2001, $7.8 million in 2000, and $12.7
million in 1999.  Net earnings (loss) were $0.5 million in 2001, $7.5 million in
2000,  and  $(0.2)  million  in  1999.  The net earnings for 2000 were primarily
related  to  favorable  development  in  the  losses incurred on its quota share
reinsurance,  which  is  assumed from a related insurer and interest income on a
book  of  business  assumed  from  a  nonaffiliate.

In  1998,  Granite  Re  participated in Goran's nonstandard automobile insurance
through  a  quota  share treaty.  On January 1, 1999, the nonstandard automobile
treaty  was  commuted resulting in a return premium of $11.2 million.  There was
no  other  assumed  automobile  reinsurance  in  1999.

Granite  Re's  capital  and  surplus  was  $14.8 million and $14.3 million as of
December  31,  2001  and  2000,  respectively.

LIQUIDITY  AND  CAPITAL  RESOURCES

The primary source of funds for Goran is through dividend and other funding
from  Granite  Re,  its  Barbados  based  subsidiary.

The  primary  source  of  funds available to SIG are fees from policyholders and
management  fees  and  dividends  from  its  subsidiaries.

Superior  Insurance Group, Inc. ("Superior Group") collects billing fees charged
to  policyholders  who  elect  to  make  their premium payments in installments.
Superior Group also receives management fees under its management agreement with
its  insurance  subsidiaries.  When the Florida Department of Insurance ("FDOI")
approved the acquisition of Superior by Superior Group Management, it prohibited
Superior from paying any dividends (whether extraordinary or not) for four years
from the date of acquisition (May 1, 1996) without the prior written approval of
the  FDOI,  which  restriction expired in April 2000.  As a result of regulatory
actions  taken  by  the Indiana Department of Insurance ("IDOI") with respect to
Pafco  and  IGF, those subsidiaries may not pay dividends without prior approval
by  the  IDOI.  Pafco  cannot pay extraordinary dividends, within the meaning of
the  Indiana Insurance Code, without the prior approval of the Indiana Insurance
Commissioner.  The  management  fees  charged  to  Pafco,  IGF  and Superior are
subject  to  review  by  the  IDOI  and  FDOI.

The  nonstandard automobile insurance subsidiaries' primary source of funds
is  premiums,  investment  income  and  proceeds  from  the  maturity or sale of
invested  assets.  Such  funds  are  used principally for the payment of claims,
payment  of  claims  settlement  costs, operating expenses (primarily management
fees),  commissions  to  independent  agents,  premium  taxes, dividends and the
purchase  of  investments.  There  is  variability  in  cash outflows because of
uncertainties  regarding  settlement  dates  for  liabilities for unpaid losses.
Accordingly,  SIG  maintains  investment  programs  intended to provide adequate
funds  to  pay claims.  During 2001 and 2000, due to reduced premium volume, SIG
has  liquidated  investments  to  pay  claims.  SIG  historically  has  tried to
maintain  duration  averages  of 3.5 years.  However, the reduction in new funds
due  to  lower  premium volume has and will continue to cause SIG to shorten the
duration  of  its investments.  SIG may incur additional costs in selling longer
bonds  to pay claims as claim payments tend to lag premium receipts.  Due to the
decline  in  premium  volume,  SIG has experienced a reduction in its investment
portfolio,  but to date has not experienced any problems meeting its obligations
for  claims  payments.

On August 12, 1997, SIG issued through a wholly owned trust subsidiary
$135 million aggregate principal amount in trust originated preferred securities
("Preferred  Securities"). The Preferred Securities have a term of 30 years with
semi-annual  interest payments of $6.4 million that commenced February 15, 1998.
SIG  may  redeem  the  Preferred  Securities in whole or in part after 10 years.

SIG  elected  to  defer  the  semi-annual  interest payments due in February and
August 2000.  SIG may continue to defer interest payments in accordance with the
terms  of  the  trust  indenture  for  a period of up to five years.  The unpaid
interest  installment  amounts  accrue  interest at 9.5%. SIG continued the same
deferral  practice  for  the  February  and  August payments due in 2001 and may
continue  this  deferral  practice for all payments due in 2002, 2003, and 2004.
The  payment  due  in  February  2002  has  been  deferred.


<PAGE>
The  following  table  sets  forth  SIG's minimum required obligations under the
Preferred  Securities  for  interest and principal payments for each of the next
four  years  and  thereafter  assuming  all semi-annual interest payments due in
2002,  2003,  and  2004  are  deferred  (in  thousands):


<TABLE>
<CAPTION>
                    2002   2003   2004    2005    Thereafter    Total
                    -----  -----  -----  -------  -----------  --------
<S>                 <C>    <C>    <C>    <C>      <C>          <C>
Interest payments.  $   -  $   -  $   -  $96,779  $   282,150  $378,929
Principal payments      -      -      -        -      135,000   135,000
                    -----  -----  -----  -------  -----------  --------
Total due. . . . .  $   -  $   -  $   -  $96,779  $   417,150  $513,929
                    =====  =====  =====  =======  ===========  ========
</TABLE>


The  trust  indenture  contains  certain  restrictive covenants based upon SIG's
consolidated coverage ratio of earnings before interest, taxes, depreciation and
amortization  (EBITDA).  If  SIG's  EBITDA  falls  below  2.5 times consolidated
interest  expense  (including  Preferred  Security  distributions)  for the most
recent  four  quarters,  the  following  restrictions  become  effective:

-     SIG  may  not  incur  additional  indebtedness  or  guarantee  additional
indebtedness.
-     SIG  may not make certain restricted payments, including loans or advances
to  affiliates,  common  stock  repurchases  or  dividends in excess of a stated
limitation.
-     SIG  may not increase its level of non-investment grade securities defined
as  equities,  mortgage loans, real estate, real estate loans and non-investment
grade  fixed  income  securities.

These restrictions currently apply as SIG's consolidated coverage ratio was
(.90)  in  2001,  and  will  continue to apply until SIG's consolidated coverage
ratio  complies  with  the terms of the trust indenture. SIG complied with these
additional restrictions as of December 31, 2001 and is in compliance as of March
29, 2002. SIG discovered it was not in compliance with the covenant dealing with
the percentage of investment in other than "Permitted Investments" as defined by
the  indenture.  The  indenture  allows  for  no more than 15% of total invested
assets  to  be  in non-investment grade securities as defined above. At December
31, 2001, approximately 21% of SIG's investment portfolio was invested in equity
securities  and  non-investment grade bonds. SIG cured the covenant violation as
of  March  29,  2002  via the sale of approximately $8 million of non-investment
grade  securities and the reinvestment of the proceeds in Permitted Investments.

During  2001,  Granite  Re  purchased  Preferred  Securities bearing a principal
amount  of  $17,460,000. During 2000, Granite Re and Granite purchased Preferred
Securities  bearing  principal  amounts  of  $18,000,000  and  $5,000,000,
respectively.  As  a result, the Company's balance sheet as of December 31, 2001
presents  a net Preferred Securities balance of $94,540,000. The Company's total
purchases  of  Preferred  Securities  resulted in  a $39,690,000 increase to the
Company's  consolidated  stockholders'  equity  as  of  December  31,  2001.

Net  cash  used  by  operating  activities  in  2001 aggregated $23,490,000
compared  to  $49,412,000  in  2000.

The  Company  believes  cash flows in the nonstandard automobile operations
from  premiums,  investment  income  and  billing  fees  are  sufficient to meet
obligations  to policyholders and operating expenses for the foreseeable future.
This  is  due  primarily  to  the  lag  time between receipt of premiums and the
payment  of  claims.  Accordingly,  while  there  can  be no assurance as to the
sufficiency  of  the Company's cash flow in future periods, the Company believes
that  its  cash  flow  will be sufficient to meet all of the Company's operating
expenses and operating debt service (not including the Preferred Securities) for
the  foreseeable  future.

The  preceding  paragraph notwithstanding, SIG has experienced, beginning in the
fourth  quarter  of  2001 and continuing in January and February 2002, sustained
adverse  loss experience on a substantial portion of its new business written in
certain  markets.  In  late February and early March 2002, SIG commenced further
analysis  of  loss  ratios by individual agency and a review of claim settlement
procedures.  Based on this and other analysis, SIG has, as of the filing of this
document,  taken  the  following  actions  to improve the financial position and
operating  results  of  the  Company:

-     Eliminated  reinstatements in all markets (i.e., upon policy cancellation,
the  insured  must  obtain  a  new  policy  at prevailing rates and underwriting
guidelines),
-     Terminated  or  placed  on  new business moratorium several hundred agents
whose  loss  ratios  were  abnormally  high when compared to the average for the
remaining  agents  (these  agents  accounted  for approximately 16% of the total
gross  written  premium  in  2001),
-     Increased  underwriting  requirements in certain markets including: higher
down  payments,  new  policy  fees,  and  shorter  policy  terms,  and
-     Hired  a  consultant  with  significant  auto  claims experience to review
processes  and  suggest  modifications  to  the  claims  function.

SIG  expects the above actions to result in a decline of approximately 10 to 15%
in  gross  written  premiums  from  2001 levels with a corresponding decrease in
management  fees  payable  to  Superior Group, offset by reductions in operating
expenses  due  to  process  changes  and  efficiencies.

Shareholders'  equity reflected a deficit of $89.1 million at December 31, 2001,
which does not reflect the statutory surplus upon which the Company conducts its
various  insurance  operations.  The  Company's U.S. insurance subsidiaries, not
including  IGF,  after  the effects of codification (See Note 13), had statutory
surplus  of  approximately $21.9 million at December 31, 2001.  (See Note 13 for
discussion  regarding  the  effects  of  codification  on  statutory  surplus.)

     EFFECTS  OF  INFLATION

Due  to  the  short term that claims are outstanding in the majority of the
product  lines  the  Company  underwrites, inflation does not pose a significant
risk  to  the  Company.

SIGNIFICANT  ACCOUNTING  POLICIES

The  financial statements contained herein reflect the selection and application
of accounting policies that require management to make significant estimates and
assumptions.  Management  believes  that  the  following  is  the  more critical
judgment  area  in  the  application  of  our accounting policies that currently
affect our financial condition and results of operations. The reserve for losses
and  LAE  includes  estimates  for  reported  unpaid losses and LAE, including a
portion attributable to losses incurred but not reported. These reserves are not
discounted.  Reserves  are  established  using individual case-basis evaluations
and statistical analysis as claims are reported.  Those estimates are subject to
the effects of trends in loss severity and frequency.  While management believes
the  reserves  make  reasonable  provisions for unpaid loss and LAE obligations,
those  provisions  are  necessarily  based  on  estimates  and  are  subject  to
variability.  Changes  in  the  estimated  reserves  are  charged or credited to
operations, as additional information on the estimated amount of a claim becomes
known during the course of its settlement.  The gross reserve for losses and LAE
is  reported net of anticipated receipts for salvage and subrogation. See Note 7
to the Consolidated Financial Statements for additional disclosure regarding the
reserve  for  losses  and  loss  adjustment  expenses. The variation between the
estimated  loss  and  LAE  and  actual  experience  can  be  material.

PRIMARY  DIFFERENCES  BETWEEN  GAAP  AND  SAP

The  financial statements contained herein have been prepared in conformity
with  Generally  Accepted  Accounting  Principles  ("GAAP")  which  differ  from
Statutory  Accounting  Practices  ("SAP")  prescribed or permitted for insurance
companies  by  regulatory  authorities  in  the  following respects: (i) certain
assets  are  excluded  as  "Nonadmitted Assets" under statutory accounting; (ii)
costs  incurred  by  the Company relating to the acquisition of new business are
expensed  for  statutory  purposes;  (iii)  the  investment  in  wholly-owned
subsidiaries is consolidated for GAAP rather than valued on the statutory equity
method  in which the net income or loss and changes in unassigned surplus of the
subsidiaries  is  reflected  in  net  income for the period rather than recorded
directly  to unassigned surplus; (iv) fixed maturity investments are reported at
amortized  cost or market value based on their National Association of Insurance
Commissioners ("NAIC") rating; (v) the liability for losses and LAE and unearned
premium  reserves  are  recorded  net  of  their reinsured amounts for statutory
accounting  purposes;  (vi) deferred income taxes are recognized as specified by
statutory  guidance  and  (vii) credits for reinsurance are recorded only to the
extent  considered  realizable.

NEW  ACCOUNTING  STANDARDS

The  NAIC  adopted  the Codification of Statutory Accounting Principles guidance
("Codification"), which replaces the Accounting Practices and Procedures manual,
as  the  NAIC's  primary  guidance  on statutory accounting effective January 1,
2001.  The  IDOI  and  the  FDOI  have  adopted  Codification.


<PAGE>
The  changes in statutory accounting principles resulting from codification that
affect  SIG's  insurance  subsidiaries  will,  among  other  things,  limit  the
statutory  carrying  value  of electronic data processing equipment and deferred
tax  assets in determining statutory surplus. The consolidated statutory surplus
of  SIG's  insurance  subsidiaries  as  of  December  31, 2001 is $21.9 million,
exclusive  of  IGF.

In  June  2001, the Financial Accounting Standards Board (the "Board") finalized
FASB  Statements  No.  141,  Business  Combinations, No. 142, Goodwill and Other
Intangible  Assets, and No. 143, Accounting for Asset Retirement Obligations. In
August  2001,  the  Board  issued  FASB  Statement  No.  144, Accounting for the
Impairment  or  Disposal of Long-lived Assets. These new standards are effective
in  2002  and  are  not  expected  to  have  a  material impact on the Company's
financial  position  or  results  of  operations.

QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

Insurance  company  investments must comply with applicable laws and regulations
that  prescribe the kind, quality and concentration of investments.  In general,
these  laws  and  regulations  permit  investments,  within specified limits and
subject  to certain qualifications, in federal, state and municipal obligations,
corporate bonds, preferred and common securities, real estate mortgages and real
estate.

The  investment portfolios of the Company at December 31, 2001, consisted of the
following  (in  thousands):

<TABLE>
<CAPTION>

                                                                       Cost or
Type of Investment                                                  Amortized Cost  Market Value
------------------------------------------------------------------  --------------  ------------
<S>                                                                 <C>             <C>
Fixed maturities:

United States Treasury securities and obligations of United States
government corporation and agencies. . . . . . . . . . . . . . . .          29,982        30,210
Obligations of states and political subdivisions . . . . . . . . .          17,536        19,438
Corporate securities . . . . . . . . . . . . . . . . . . . . . . .          29,807        28,718
                                                                    --------------  ------------
Total Fixed Maturities . . . . . . . . . . . . . . . . . . . . . .          77,325        78,366

Equity Securities:

Common Stocks. . . . . . . . . . . . . . . . . . . . . . . . . . .          21,610        18,323
Short-Term investments . . . . . . . . . . . . . . . . . . . . . .          13,266        13,266
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . .              --            --
Other invested assets. . . . . . . . . . . . . . . . . . . . . . .           1,594         1,594
                                                                    --------------  ------------
                                                                           113,795       111,549
                                                                    ==============  ============
</TABLE>
The  following table sets forth the composition of the fixed maturity securities
portfolio  of  the Company by time to maturity as of December 31 (in thousands):

<TABLE>
<CAPTION>

                                            2001                            2000
                                            ----                            ----
                                                    Percent Total                Percent Total
                                                    -------------                -------------
Time to Maturity                    Market Value    Market Value   Market Value   Market Value
----------------------------------  -------------  --------------  -------------  -------------
<S>                                 <C>            <C>             <C>            <C>
1 year or less . . . . . . . . . .          7,998           10.2   $      11,792          11.1%
More than 1 year through 5 years .         26,343           33.6          42,966          40.6
More than 5 years through 10 years         20,554           26.2          14,825          14.0
More than 10 years . . . . . . . .          4,091            5.2          22,724          21.5
                                    -------------  --------------  -------------  -------------
                                           58,986           75.2          92,307          87.2
Mortgage-backed securities . . . .         19,380           24.8          13,610          12.8
                                    -------------  --------------  -------------  -------------
Total. . . . . . . . . . . . . . .         78,366          100.0%  $     105,917         100.0%
                                    =============  ==============  =============  =============
</TABLE>

The  following  table  sets  forth  the  ratings  assigned to the fixed maturity
securities  of  the  Company  as  of  December  31  (in  thousands):

<TABLE>
<CAPTION>

                                         2001                            2000
                                         ----                            ----
                                              Percent Total                 Percent Total
                                               -------------                 -------------
Rating(1)                      Market Value    Market Value   Market Value   Market Value
-----------------------------  -------------  --------------  -------------  -------------
<S>                            <C>            <C>             <C>            <C>
Aaa or AAA. . . . . . . . . .         51,754           66.1   $      68,717          64.9%
Aa or AA. . . . . . . . . . .          3,357            4.3           3,861           3.6
A . . . . . . . . . . . . . .          9,655           12.3          12,515          11.8
Baa or BBB. . . . . . . . . .          7,617            9.7          14,861          14.0
Ba or BB. . . . . . . . . . .          4,883            6.2           5,148           4.9
Other below investment grade.          1,100            1.4             815            .8
                               -------------  --------------  -------------  -------------
Total . . . . . . . . . . . .         78,366            100%  $     105,917         100.0%
                               =============  ==============  =============  =============
<FN>

(1)     Ratings are assigned by Standard & Poor's Corporation, and when not available, are
based  on  ratings  assigned  by  Moody's  Investors  Service,  Inc
</TABLE>

The  investment  results  of the Company for the periods indicated are set forth
below  (in  thousands):

<TABLE>
<CAPTION>

                                                    Years Ended December 31

                                                   2001       2000       1999
                                                 ---------  ---------  ---------
<S>                                              <C>        <C>        <C>
Net investment income (1) . . . . . . . . . . .  $  6,998   $ 12,171   $ 13,125
Average investment portfolio (2). . . . . . . .   131,343   $187,243   $232,947
Pre-tax return on average investment portfolio.       5.3%       6.5%       5.6%
Net realized gains (losses) . . . . . . . . . .  $ (1,177)  $ (5,970)  $     44
<FN>

(1)     Includes  dividend  income  received  in  respect  of holdings of common
stock.
(2)     Average  investment portfolio represents the average (based on amortized
cost)  of  the  beginning  and  ending  investment  portfolio.
</TABLE>

If  interest  rates  were to increase 10% from the December 31, 2001 levels, the
decline  in  fair value of the fixed maturity securities would not significantly
affect  the  Company's  ability  to  meet  its  obligations to policyholders and
debtors.

MARKET-SENSITIVE  INSTRUMENTS  AND  RISK  MANAGEMENT

The  Company's investment strategy is to invest available funds in a manner that
will  maximize  the  after-tax  yield  of  the  portfolio  while emphasizing the
stability  and  preservation of the capital base.  The Company seeks to maximize
the  total  return  on investment through active investment management utilizing
third-party  professional  administrators,  in  accordance  with pre-established
investment  policy guidelines established and reviewed regularly by the Board of
Directors  of  the Company.  Accordingly, the entire portfolio of fixed maturity
securities  is  available  to  be sold in response to changes in market interest
rate;  changes  in  relative  values of individual securities and asset sectors;
changes  in prepayment risks; changes in credit quality; and liquidity needs, as
well  as  other  factors.

The  portfolio  is invested in types of securities and in an aggregate duration,
which  reflect  the  nature  of the Company's liabilities and expected liquidity
needs  diversified  among  industries,  issuers  and  geographic  locations. The
Company's  fixed  maturity  and  common  equity investments are substantially in
public  companies.

The  following  table  provides  information  about  the  Company's  financial
instruments  that  are  sensitive  to changes in interest rates.  For investment
securities  and  debt  obligations,  the table presents principal cash flows and
related  weighted-average  interest  rates  by  expected  maturity  date.
Additionally,  the  Company  has  assumed  its available for sale securities are
similar  enough  to  aggregate  those  securities  for  presentation  purposes.


<TABLE>
<CAPTION>

                                       Interest Rate Sensitivity
                                 Principal Amount by Expected Maturity
                                         Average Interest Rate
                                      (U.S. dollars in thousands)


<S>                    <C>      <C>      <C>      <C>      <C>      <C>           <C>        <C>
                         2002     2003     2004     2005     2006   Thereafter    Total       12/31/01
                       -------  -------  -------  -------  -------
ASSETS
Available for sale. .  $7,586   $7,766   $7,499   $8,440   $6,901   $    39,216   $ 77,408   $  78,366
Average interest rate     7.3%     5.6%     6.6%     4.3%     6.3%          6.5%       6.1%        6.1%

LIABILITIES
Preferred securities.      --       --       --       --       --       135,000    135,000       9,000
Average interest rate      --       --       --       --       --           9.5%       9.5%        9.5%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED  BALANCE  SHEETS
As  of  December  31,  2001  and  2000
(U.S.  dollars  in  thousands,  except  share  data)

                                                                                  2001        2000
                                                                               ----------  ----------
<S>                                                                            <C>         <C>
ASSETS:
Investments:
    Fixed maturities. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  77,325   $ 107,827
    Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21,610      20,268
    Short-term investments, at amortized cost, which approximates market. . .     13,266      17,594
    Mortgage loans, at cost . . . . . . . . . . . . . . . . . . . . . . . . .          -       1,870
    Other invested assets . . . . . . . . . . . . . . . . . . . . . . . . . .      1,594       1,331
                                                                               ----------  ----------
Total Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    113,795     148,890
Investments in and advances to related parties. . . . . . . . . . . . . . . .      1,130       4,254
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .     11,263       3,230
Receivables, net of allowances of $1,526 and $1,940 . . . . . . . . . . . . .     47,441      54,370
Reinsurance recoverable on paid and unpaid losses, net. . . . . . . . . . . .     29,284      44,843
Prepaid reinsurance premiums. . . . . . . . . . . . . . . . . . . . . . . . .     40,039      24,774
Deferred policy acquisition costs . . . . . . . . . . . . . . . . . . . . . .        763       6,454
Property and equipment, net of accumulated depreciation . . . . . . . . . . .      9,907      12,400
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      4,376       4,983
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2,421       3,784
Assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . .    115,900     132,050
                                                                               ----------  ----------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 376,319   $ 440,032
                                                                               ==========  ==========

LIABILITIES AND STOCKHOLDER'S DEFICIT:
LIABILITIES:
    Losses and loss adjustment expenses . . . . . . . . . . . . . . . . . . .  $  84,876   $ 113,149
    Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . .     59,216      62,386
    Reinsurance payables. . . . . . . . . . . . . . . . . . . . . . . . . . .     58,868      63,632
    Distributions payable on preferred securities . . . . . . . . . . . . . .     23,252      15,263
Deferred Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7,250           -
    Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21,563      14,904
    Liabilities of discontinued operations. . . . . . . . . . . . . . . . . .    115,900     131,366
                                                                               ----------  ----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    370,925     400,700
                                                                               ----------  ----------
MINORITY INTEREST:
Company-obligated mandatorily redeemable preferred stock of trust subsidiary
 holding solely parent debentures . . . . . . . . . . . . . . . . . . . . . .     94,540     112,000
                                                                               ----------  ----------
STOCKHOLDERS' DEFICIT:
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18,502      19,132
Contributed surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     42,465      23,748
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . .       (763)       (291)
Retained (deficit). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (149,350)   (115,257)
                                                                               ----------  ----------
TOTAL STOCKHOLDERS' (DEFICIT) . . . . . . . . . . . . . . . . . . . . . . . .    (89,146)    (72,668)
                                                                               ----------  ----------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) . . . . . . . . . . . . . . . .  $ 376,319   $ 440,032
                                                                               ==========  ==========
<FN>

The  accompanying  notes  are  an  integral  part  of  the  consolidated  financial  statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED  STATEMENTS  OF  OPERATIONS
For  the  years  ended  December  31,  2001,  2000,  and  1999
(U.S.  dollars  in  thousands,  except  per  share  data)


                                                                                 2001       2000       1999
                                                                              ----------  ---------  ---------
<S>                                                                           <C>         <C>        <C>
Gross premiums written . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 193,186   $182,099   $236,401
Less ceded premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (106,324)   (78,637)     7,361
                                                                              ----------  ---------  ---------
NET PREMIUMS WRITTEN . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  86,862   $103,462   $243,762
                                                                              ==========  =========  =========
NET PREMIUMS EARNED. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 108,197   $145,532   $261,800
Fee income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12,425     14,239     15,335
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . .      6,998     12,171     13,125
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1,750          -          -
Net realized capital gain (loss) . . . . . . . . . . . . . . . . . . . . . .     (1,177)    (5,970)        44
                                                                              ----------  ---------  ---------
TOTAL REVENUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    128,193    165,972    290,304
                                                                              ----------  ---------  ---------
Expenses:
Losses and loss adjustment expenses. . . . . . . . . . . . . . . . . . . . .     95,216    113,768    242,408
Policy acquisition and general and administrative expenses . . . . . . . . .     53,165     70,591     97,735
Amortization of intangibles. . . . . . . . . . . . . . . . . . . . . . . . .      1,380     34,960      2,194
                                                                              ----------  ---------  ---------
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    149,761    219,319    342,337
                                                                              ----------  ---------  ---------
LOSS FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . .    (21,568)   (53,347)   (52,033)
                                                                              ----------  ---------  ---------
Income taxes:
Current income tax expense (benefit) . . . . . . . . . . . . . . . . . . . .          -        487       (765)
Deferred income tax expense (benefit). . . . . . . . . . . . . . . . . . . .          -     (2,636)     7,183
                                                                              ----------  ---------  ---------
TOTAL INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          -     (2,149)     6,418
                                                                              ----------  ---------  ---------
LOSS FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (21,568)   (51,198)   (58,451)
Minority Interest:
Earnings in consolidated subsidiary. . . . . . . . . . . . . . . . . . . . .          -         --     19,787
Distributions on preferred securities, net of tax of nil in 2001 and 2000,
4,489 in 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (10,369)   (12,026)    (8,336)
                                                                              ----------  ---------  ---------
LOSS FROM CONTINUING OPERATIONS. . . . . . . . . . . . . . . . . . . . . . .    (31,937)   (63,224)   (47,000)
Discontinued Operations:
Loss on disposal of discontinued segment less applicable taxes of nil. . . .          -       (900)         -
Loss from operations of discontinued segment, less applicable income
taxes of nil in 2001, 2000 and 1999. . . . . . . . . . . . . . . . . . . . .     (2,156)   (16,141)   (15,373)
                                                                              ----------  ---------  ---------
LOSS FROM DISCONTINUED OPERATIONS. . . . . . . . . . . . . . . . . . . . . .     (2,156)   (17,041)   (15,373
                                                                              ----------  ---------  ---------
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ (34,093)  $(80,265)  $(62,373)
                                                                              ==========  =========  =========
Weighted average shares outstanding - basic and fully diluted. . . . . . . .      5,696      5,822      5,876
                                                                              ==========  =========  =========
Net loss from continuing operations per share - basic and fully diluted. . .  $   (5.61)  $ (10.86)  $  (8.00)
                                                                              ==========  =========  =========
Net loss of discontinued operations per share - basic and fully diluted. . .  $   (0.38)  $  (2.93)  $  (2.61)
                                                                              ==========  =========  =========
Net loss per share - basic and fully diluted . . . . . . . . . . . . . . . .  $   (5.99)  $ (13.79)  $ (10.61)
                                                                              ==========  =========  =========
<FN>

The  accompanying  notes  are  an  integral  part  of  the  consolidated  financial  statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY  (DEFICIT)
for  the  years  ended  December  31,  2001,  2000  and  1999
(U.S.  dollars  in  thousands,  except  number  of  shares)


                                  Common Stock
                                                                                 Retained      Cumulative     Total
                                                                 Contributed     Earnings     Translation  Stockholders
                                     Shares         Amount        Surplus        (Deficit)      Adjustment    Equity
                                  -------------  ------------  -------------  ---------------  ------------  ---------
<S>                               <C>            <C>           <C>            <C>              <C>           <C>
Balance at January 1, 1999 . . .     5,876,398   $    19,317   $      2,775   $       27,381   $       252   $ 49,725
                                  =============  ============  =============  ===============  ============  =========

Comprehensive Income:
Net Loss . . . . . . . . . . . .            --            --             --          (62,373)           --    (62,373)
Change in cumulative translation
adjustment . . . . . . . . . . .            --            --             --               --          (239)      (239)
Balance at December 31,1999. . .     5,876,398   $    19,317   $      2,775   $      (34,992)  $        13   $(12,887)
                                  =============  ============  =============  ===============  ============  =========

Comprehensive Income:
Net Loss . . . . . . . . . . . .            --            --             --          (80,265)           --    (80,265)
Change in cumulative translation
Adjustment . . . . . . . . . . .            --            --             --               --          (304)      (304)
Preferred Securities purchase. .            --            --         20,973               --            --     20,973
Purchase of common shares. . . .      (100,000)         (185)            --               --            --       (185)
Balance at December 31, 2000 . .     5,776,398   $    19,132   $     23,748   $     (115,257)  $      (291)  $(72,668)
                                  =============  ============  =============  ===============  ============  =========

Comprehensive Income:
Net Loss . . . . . . . . . . . .            --            --             --          (34,093)           --    (34,093)
Change in cumulative translation
Adjustment . . . . . . . . . . .            --            --                                          (472)      (472)
Preferred Securities purchase. .            --            --         18,717                                    18,717
Purchase of common shares. . . .      (382,700)         (218)                                                    (218)
Reclassification of Organization
Expense. . . . . . . . . . . . .                        (412)                                                    (412)
Balance at December 31, 2001 . .     5,393,698   $    18,502   $     42,465   $     (149,350)  $      (763)  $(89,146)
                                  =============  ============  =============  ===============  ============  =========
<FN>

The  accompanying  notes  are  an  integral  part  of  the  consolidated  financial  statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
For  the  years  ended  December  31,  2001,  2000  and  1999
(U.S.  dollars  in  thousands)

                                                                              2001       2000        1999
                                                                            ---------  ---------  ----------
<S>                                                                         <C>        <C>        <C>
Cash flows from operating activities
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(34,093)  $(80,265)  $ (62,373)
Adjustments to reconcile net loss to net cash provided by (used in)
operations:
Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . .        --         --     (19,787)
Depreciation, amortization, impairment and other . . . . . . . . . . . . .     3,892     38,983       5,858
Deferred income tax expense. . . . . . . . . . . . . . . . . . . . . . . .        --     (2,635)      4,177
Net realized capital (gain) loss . . . . . . . . . . . . . . . . . . . . .     1,177      5,970         (22)
Gain on sale of capital assets . . . . . . . . . . . . . . . . . . . . . .        --         --          --

Net changes in operating assets and liabilities (net of assets acquired):
Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     6,929     14,153      (6,114)
Reinsurance recoverable on losses, net . . . . . . . . . . . . . . . . . .    15,559    (40,053)     20,922
Prepaid reinsurance premiums . . . . . . . . . . . . . . . . . . . . . . .   (15,265)   (23,896)      5,443
Federal income taxes recoverable (payable) . . . . . . . . . . . . . . . .        --         --      11,379
Deferred policy acquisition costs. . . . . . . . . . . . . . . . . . . . .     5,691      7,454       2,424
Other assets and liabilities . . . . . . . . . . . . . . . . . . . . . . .     7,509     (9,816)      7,256
Losses and loss adjustment expenses. . . . . . . . . . . . . . . . . . . .   (28,273)   (44,276)     16,941
Unearned premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (3,170)   (18,175)    (17,368)
Reinsurance payables . . . . . . . . . . . . . . . . . . . . . . . . . . .    (4,764)    58,142      15,329
Distribution payable on preferred securities . . . . . . . . . . . . . . .     7,989     10,454          --
  Deferred Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7,250         --          --
Net assets from discontinued operations. . . . . . . . . . . . . . . . . .     6,079     34,548         (33)
                                                                            ---------  ---------  ----------
Net cash provided by / (used in ) operations:. . . . . . . . . . . . . . .   (23,490)   (49,412)    (15,968)
                                                                            ---------  ---------  ----------

Cash flow from investing activities net of assets acquired:
Net sales (purchases) of short-term investments. . . . . . . . . . . . . .     4,328     15,040     (13,211)
Proceeds from sales, calls and maturities of fixed maturities. . . . . . .    67,105     77,641     206,742
Purchases of fixed maturities. . . . . . . . . . . . . . . . . . . . . . .   (35,105)   (10,181)   (182,453)
Proceeds from sales of equity securities . . . . . . . . . . . . . . . . .    12,707     16,736      11,215
Purchase of equity securities. . . . . . . . . . . . . . . . . . . . . . .   (12,494)   (25,408)     (9,850)
Proceeds from repayment of mortgage loans. . . . . . . . . . . . . . . . .     1,870        120          75
Purchase of property and equipment . . . . . . . . . . . . . . . . . . . .    (1,314)    (1,663)     (6,414)
Net investing activities from discontinued operations. . . . . . . . . . .    (5,306)      (150)     (1,385)
Net proceeds from sales (purchases) of other investments . . . . . . . . .      (217)      (415)     (2,161)
                                                                            ---------  ---------  ----------
Net cash provided by / (used in) investing activities: . . . . . . . . . .    31,574     71,720       2,558
                                                                            ---------  ---------  ----------

Cash flow from financing activities net of assets acquired:
Purchase of affiliate preferred securities . . . . . . . . . . . . . . . .    (2,497)    (2,027)         --
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . .      (630)        --          --
Redemption of share capital. . . . . . . . . . . . . . . . . . . . . . . .        --       (185)         --
Net financing activities from discontinued operations. . . . . . . . . . .       (48)   (16,473)      4,954
Loans from and (repayments to) related parties . . . . . . . . . . . . . .     3,124     (2,608)         80
                                                                            ---------  ---------  ----------
Net cash provided by / (used in ) financing activities:. . . . . . . . . .       (51)   (21,293)      5,034
                                                                            ---------  ---------  ----------

Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . .     8,033      1,015      (8,376)
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . .     3,230      2,215      10,591
                                                                            ---------  ---------  ----------
Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . .    11,263   $  3,230   $   2,215
                                                                            =========  =========  ==========
<FN>
The  accompanying  notes  are  an  integral  part  of  the  consolidated  financial  statements.
</TABLE>

<PAGE>

GORAN  CAPITAL  INC  AND  SUBSIDIARIES
_________________________________________________________________________
---


1.     NATURE  OF  OPERATIONS  AND  SIGNIFICANT  ACCOUNTING  POLICIES:

Goran Capital Inc. ("Goran" or the "Company") is the parent company of the Goran
group  of  companies. The consolidated financial statements include the accounts
of  all  subsidiary  companies  of Goran as described in "BASIS OF PRESENTATION"
below.

The  following  is  a  description  of  the  significant accounting policies and
practices  employed:

A.   BASIS  OF  PRESENTATION:  The  consolidated  financial  statements are
     prepared  in  accordance  with  Canadian  Generally  Accepted  Accounting
     Principles.  In  addition,  the  consolidated financial statements are also
     used  to  satisfy  the  Company's financial filing requirements in the U.S.
     Consequently,  the  consolidated  financial  statements include disclosures
     that  are  not  necessarily  required  under  Canadian  GAAP  and  contain
     references  to  U.S.  GAAP  accounting  pronouncements. Note 20, presents a
     reconciliation  of  Canadian  and  U.S.  GAAP.

     The  consolidated  financial  statements  include  the accounts, after
     intercompany eliminations, of the Company and its wholly-owned subsidiaries
     as  follows:

Symons  International  Group, Inc. ("SIG") is a 73.1% owned subsidiary of Goran.
SIG's  subsidiaries  are  as  follows:

     Superior Insurance Group Management, Inc ("Superior Group Management")
     a holding company for the nonstandard automobile operations which includes:

     Superior Insurance Group, Inc. ("Superior Group") a management company
     for  the  nonstandard  automobile  operations;

     Superior Insurance Company ("Superior") an insurance company domiciled
     in  Florida;

     Superior American Insurance Company ("Superior American") an insurance
     company  domiciled  in  Florida;

     Superior Guaranty Insurance Company ("Superior Guaranty") an insurance
     company  domiciled  in  Florida;

     Pafco  General  Insurance  Company  ("Pafco")  an  insurance  company
     domiciled  in  Indiana;

     IGF  Holdings,  Inc.  ("IGFH")  a  holding  company

     IGF  Insurance  Company  ("IGF")  an  insurance  company  domiciled in
     Indiana  (See  Note  23);

Granite  Reinsurance  Company  Ltd.  ("Granite  Re")  a  finite risk reinsurance
company  domiciled  in  Barbados.

Granite  Insurance  Company  ("Granite") a Canadian federally licensed insurance
company.

Symons  International  Group  (Florida)  Inc.  ("SIGF")  a  Florida  domestic
corporation.

B.   USE  OF  ESTIMATES:  The  preparation of financial statements requires
     management  to  make estimates and assumptions that affect amounts reported
     in  the  financial  statements and accompanying notes. Actual results could
     differ  from  those  estimates.

C.   SIGNIFICANT ESTIMATES: The most significant estimates in the Company's
     balance sheet are the determination of prepaid policy acquisition costs and
     the  reserve  for  insurance  losses  and loss adjustment expenses ("LAE").
     Management's  estimate  of  prepaid  policy  acquisition  costs is based on
     historical  studies  and  assumptions  made  regarding  costs  incurred.
     Management's  estimate  of  insurance  losses and LAE is based on past loss
     experience  and consideration of current claim trends as well as prevailing
     social,  economic  and  legal  conditions. Actual results could differ from
     those  estimates.

D.   PREMIUMS:  Premiums  are recognized as income ratably over the life of
     the  policies  and  are stated net of ceded premiums. Unearned premiums are
     computed  on  the  daily  pro  rata  basis.

E.   INVESTMENTS:  Investments  are  presented  on  the  following  basis:

     Fixed  maturities  and equity securities are carried at amortized cost
     for  fixed  maturities  and  cost  for  equity  securities.

     Real  estate  is  carried at cost, less an allowance for depreciation.

     Mortgage  loans  are  carried  at  outstanding  principal  balance.

     Realized  gains and losses on sales of investments are recorded on the
     trade  date and are recognized in net income on the specific identification
     basis.  Interest  and  dividend  income  are  recognized  as  earned.


F.   CASH  AND  CASH EQUIVALENTS: For presentation in the statement of cash
     flows,  the  Company includes in cash and cash equivalents all cash on hand
     and  demand  deposits  with  original  maturities  of three months or less.

G.   DEFERRED  POLICY  ACQUISITION COSTS: Deferred policy acquisition costs
     are  comprised  of  agents' commissions, premium taxes, certain other costs
     and  investment income which are related directly to the acquisition of new
     and renewal business, net of expense allowances received in connection with
     reinsurance  ceded,  which  have  been  accounted for as a reduction of the
     related  policy  acquisition  costs. These costs are deferred and amortized
     over the terms of the policies to which they relate. Acquisition costs that
     exceed  estimated losses and loss adjustment expenses and maintenance costs
     are  charged  to  expense  in  the  period  in which those excess costs are
     determined.

H.   PROPERTY  AND  EQUIPMENT: Property and equipment are recorded at cost.
     Depreciation  for  buildings is based on the straight-line method over 31.5
     years  and  the  straight-line method for other property and equipment over
     their  estimated  useful  lives ranging from five to seven years. Asset and
     accumulated  depreciation  accounts  are  relieved  for  dispositions, with
     resulting  gains  or  losses  reflected  in  net  income.

I.   INTANGIBLE  ASSETS:  Intangible  assets  consist  primarily  of  debt
     acquisition  costs  and  goodwill,  in  years 2000 and prior. Deferred debt
     acquisition  costs  are amortized over the term of the debt. Prior to 2000,
     goodwill was amortized over a 25-year period on a straight-line basis based
     upon  management's  estimate  of  the  expected  benefit period. See Note 5
     regarding  the  goodwill  impairment  charge  recorded  in  2000.

J.   ASSET  IMPAIRMENT  POLICY:  The Company reviews the carrying values of
     its  long-lived  and identifiable intangible assets for possible impairment
     whenever  events  or  changes  in  circumstances indicate that the carrying
     amount  of  the  assets  may  not  be recoverable. See Note 6 regarding the
     goodwill impairment charge recorded in 2000. Any long-lived assets held for
     disposal  are reported at the lower of carrying amounts or fair value, less
     expected  costs  to  sell.

K.   LOSSES  AND  LOSS  ADJUSTMENT  EXPENSES:  Reserves  for losses and LAE
     include  estimates  for reported unpaid losses and LAE, including a portion
     attributable  to  losses incurred but not reported. These reserves have not
     been  discounted.  Reserves  are  established  using  individual case-basis
     evaluations  and  statistical  analysis  as  claims  are  reported.  Those
     estimates  are  subject  to  the  effects  of  trends  in loss severity and
     frequency.  While  management  believes  the  reserves  make  reasonable
     provisions  for  unpaid  loss  and  LAE  obligations,  those provisions are
     necessarily  based  on estimates and are subject to variability. Changes in
     the  estimated reserves are charged or credited to operations as additional
     information  on  the  estimated  amount of a claim becomes known during the
     course  of its settlement. The gross reserve for losses and LAE is reported
     net  of  anticipated  receipts for salvage and subrogation of approximately
     $5,822,000  and  $6,983,000  at  December  31, 2001 and 2000, respectively.

L.   PREFERRED SECURITIES: Preferred Securities represent company-obligated
     mandatorily  redeemable securities of SIG's trust subsidiary holding solely
     parent  debentures  and  are  reported  at  their  liquidation  value under
     minority  interest.  Distributions  on these securities are charged against
     consolidated  earnings.

M.   INCOME  TAXES: The Company utilizes the liability method of accounting
     for  deferred  income  taxes.  Under  the  liability method, companies will
     establish  a  deferred tax liability or asset for the future tax effects of
     temporary differences between book and taxable income. Valuation allowances
     are  established when necessary to reduce deferred tax assets to the amount
     expected  to  be  realized.  Income  tax  expense  is  the  tax  payable or
     refundable  for  the  period  plus or minus the change during the period in
     deferred  tax  assets  and  liabilities.

N.   REINSURANCE:  Reinsurance  premiums, commissions, and reserves related
     to  reinsured  business  are accounted for on a basis consistent with those
     used  in  accounting  for  the  original  policies  and  the  terms  of the
     reinsurance contracts. Premiums ceded to other companies have been reported
     as  a  reduction  of  premium  income.

O.   EARNINGS  PER  SHARE:  The  Company's  basic  earnings  per  share
     calculations are based upon the weighted average number of shares of common
     stock outstanding during each period. As the Company has reported losses in
     2001,  2000,  and  1999,  common  stock  equivalents  are  anti-dilutive.
     Therefore,  fully  diluted earnings per share is the same as basic earnings
     per  share.

P.   RECLASSIFICATIONS:  Certain  amounts  from  prior  periods  have  been
     reclassified  to  allow  for  comparability  to  the  2001  presentation.

2.   CORPORATE  REORGANIZATION  AND  ACQUISITIONS:

On  August  12,  1997,  the Company purchased the remaining minority interest in
Superior  Group  Management  for  $61  million  in  cash.  The  excess  of  the
acquisition  price over the minority interest liability was assigned to goodwill
as  the  fair market value of assets and liabilities approximated their carrying
value.  See  Note  6  regarding the goodwill impairment charge recorded in 2000.

Effective  on  November 1, 2001, SIGF acquired the assets of a property casualty
insurance  brokerage  located in Boca Raton, Florida.  The purchase price of the
asset  purchase  was  $150,000.


<TABLE>
<CAPTION>

3.   INVESTMENTS:

     Investments  are  summarized  as  follows  (in  thousands):

                                                     Cost or                        Estimated
                                                   Amortized        Unrealized       Market
December 31, 2001 (in thousands)                      Cost        Gain       Loss     Value
                                                    ------    ------         -----   -----
<S>                                                <C>         <C>          <C>       <C>
Fixed Maturities:
U.S. Treasury securities and obligations of U.S.
 Government corporations and agencies . . . . . .  $   29,982  $       609  $  (381)  $ 30,210
Obligations of states and political subdivisions.      17,536        1,949      (47)    19,438
Corporate securities. . . . . . . . . . . . . . .      29,807          501   (1,590)    28,718
                                                   ----------  -----------  --------  --------
Total fixed maturities. . . . . . . . . . . . . .      77,325        3,059   (2,018)    78,366
Equity securities . . . . . . . . . . . . . . . .      21,610          377   (3,664)    18,323
Short-term investments. . . . . . . . . . . . . .      13,266           --       --     13,266
Other invested assets ( including real estate). .       1,594           --       --      1,594
                                                   ----------  -----------  --------  --------
Total Investments . . . . . . . . . . . . . . . .  $  113,795  $     3,436  $(5,682)  $111,549
                                                   ==========  ===========  ========  ========
</TABLE>

<TABLE>
<CAPTION>
                                                    Cost or                          Estimated
                                                   Amortized          Unrealized      Market
December 31, 2000 (in thousands)                      Cost         Gain      Loss     Value
                                                   ----------  ----- ------         --------
<S>                                                <C>         <C>          <C>       <C>
Fixed Maturities:
U.S. Treasury securities and obligations of U.S.
 government corporations and agencies . . . . . .  $   59,389  $       541  $  (188)  $ 59,742
Obligations of states and political subdivisions.         241            1       --        242
Corporate securities. . . . . . . . . . . . . . .      48,197          177   (2,441)    45,933
                                                   ----------  -----------  --------  --------
Total fixed maturities. . . . . . . . . . . . . .     107,827          719   (2,629)   105,917
Equity securities . . . . . . . . . . . . . . . .      20,268        1,754   (3,332)    18,690
Short-term investments. . . . . . . . . . . . . .      17,594           --     (114)    17,480
Mortgage loans. . . . . . . . . . . . . . . . . .       1,870           --       --      1,870
Other invested assets . . . . . . . . . . . . . .       1,331           --       --      1,331
                                                   ----------  -----------  --------  --------
Total Investments . . . . . . . . . . . . . . . .  $  148,890  $     2,473  $(6,075)  $145,288
                                                   ==========  ===========  ========  ========
</TABLE>

At  December  31,  2001,  The  Standard & Poor's Corporation or Moody's Investor
Services,  Inc  considered  approximately  92% of the Company's fixed maturities
investment grade.  Securities with quality ratings, Baa and above are considered
investment  grade  securities.  In  addition, the Company's investments in fixed
maturities  did not contain any significant geographic or industry concentration
of  credit  risk.

The  amortized  cost  and estimated market value of fixed maturities at December
31, 2001, by contractual maturity, are shown in the table that follows. Expected
maturities  will  differ  from contractual maturities because borrowers may have
the  right to call or prepay obligations with or without penalty (in thousands):

<TABLE>
<CAPTION>

                                                         Estimated
                                        Amortized Cost  Market Value
                                        --------------  ------------
<S>                                     <C>             <C>
Maturity:
Due in one year or less. . . . . . . .           7,894         7,998
Due after one year through five years.          26,401        26,343
Due after five years through ten years          20,754        20,554
Due after ten years. . . . . . . . . .           4,776         4,091
Mortgage-backed securities . . . . . .          17,500        19,380
                                        --------------  ------------
TOTAL. . . . . . . . . . . . . . . . .          77,325        78,366
                                        ==============  ============
</TABLE>


<TABLE>
<CAPTION>

Gains and losses realized on sales of investments are as follows (in thousands):

                         2001      2000      1999
                       --------  --------  ---------
<S>                    <C>       <C>       <C>
Proceeds from sales .  $81,682   $94,497   $218,032
Gross gains realized.  $   547   $ 1,361   $  3,351
Gross losses realized  $(1,724)  $(7,331)  $ (3,307)
</TABLE>

<TABLE>
<CAPTION>

Net  investment  income  for  the  years  ended  December  31 are as follows (in
thousands):

                                  2001      2000      1999
                                 -------  --------  --------
<S>                              <C>      <C>       <C>
Fixed maturities. . . . . . . .  $6,202   $ 9,342   $12,150
Equity securities . . . . . . .     174       344       401
Cash and short-term investments     697     1,269     1,232
Mortgage loans. . . . . . . . .      65        --       152
Other . . . . . . . . . . . . .     769     1,318      (173)
                                 -------  --------
Total investment income . . . .   7,907    12,273    13,762
Investment expenses . . . . . .    (909)     (102)     (637)
                                 -------  --------
Net investment income . . . . .  $6,998   $12,171   $13,125
                                 =======  ========  ========
<FN>
Investments  with  a  market  value of approximately $17,115,000 and $16,042,000
(amortized cost of approximately $16,799,000 and $15,993,000) as of December 31,
2001  and  2000,  respectively, were on deposit in the United States and Canada.
The deposits are required by various insurance departments and others to support
licensing  requirements  and  certain  reinsurance  contracts,  respectively.
</TABLE>

4.   DEFERRED  POLICY  ACQUISITION  COSTS:

Policy  acquisition  costs  are  capitalized  and amortized over the life of the
policies.  Policy  acquisition  costs  are  those  costs directly related to the
issuance  of  insurance  policies  including  commissions,  premium  taxes,  and
underwriting  expenses  net  of  reinsurance commission income on such policies.

Policy  acquisition  costs  both  acquired  and  deferred,  and  the  related
amortization  charged  to  income  were  as  follows  (in  thousands):

<TABLE>
<CAPTION>
                              2001       2000       1999
                            ---------  ---------  ---------
<S>                         <C>        <C>        <C>
Balance, beginning of year  $  6,454   $ 13,908   $ 16,332
Costs deferred during year    28,056     29,999     40,241
Amortization during year .   (33,747)   (37,453)   (42,665)
                            ---------  ---------  ---------
Balance, end of year . . .  $    763   $  6,454   $ 13,908
                            =========  =========  =========
</TABLE>


5.   PROPERTY  AND  EQUIPMENT:

Property  and equipment at December 31 are summarized as follows (in thousands):

<TABLE>
<CAPTION>

                                              Accumulated
                                   2001 Cost  Depreciation   2001 Net   2000 Net
                                    ---------  -----------   --------- ---------
<S>                             <C>            <C>        <C>        <C>
Land . . . . . . . . . . . . .       $    100  $     -  $       100  $   100
Buildings. . . . . . . . . . .          4,273      1,618      2,655    2,964
Office furniture and equipment          2,387      1,572        815      939
Automobiles. . . . . . . . . .            102         55         47       64
Computer equipment . . . . . .         14,171      7,881      6,290    8,333
                                -------------  ---------  ---------  -------
Total. . . . . . . . . . . . .       $ 21,033   $ 11,126  $   9,907  $12,400
                                =============  =========  =========  =======
<FN>

Accumulated  depreciation  at  December  31,  2000 was $10,182,000. Depreciation
expense related to property and equipment for the years ended December 31, 2001,
2000  and  1999  were  $3,741,000,  $3,507,000  and  $3,414,000,  respectively.


</TABLE>


6.   INTANGIBLE  ASSETS:

In  accordance  with  SFAS No. 121, "Accounting for the Impairment of Long-lived
Assets",  SIG  determined  in  2000  that  the  carrying  value of goodwill that
resulted  from  the  acquisition  of Superior Group Management exceeded its fair
value.  This  determination  was  made after considering the series of continued
losses  which  the  company  had  experienced,  the  reduction  in the volume of
premiums  written  and  an  evaluation  of  future  cash  flows. Based upon this
assessment,  a  charge of $33,464,000 was recorded in the fourth quarter of 2000
to  write-off  the  remaining  carrying  value  of  the goodwill. This charge is
included  as  amortization  expense in the accompanying financial statements for
2000.

Intangible  assets  at  December  31  are  as  follows  (in  thousands):


<TABLE>
<CAPTION>

                                     Accumulated
                           2001 Cost Amortization 2001 Net 2000 Net
                           --------- ----------  -------- --------
<S>                  <C>            <C>        <C>        <C>
Goodwill. . . . . .  $      39,471  $  39,471  $       -  $1,209
Deferred debt costs          5,132        756      4,376   3,774
                     -------------  ---------  ---------  ------
                     $      44,603  $  40,227  $   4,376  $4,983
                     =============  =========  =========  ======
<FN>
Accumulated  amortization  with impairment at December 31, 2000 was $40,123,000.
Amortization  expense  related to intangible assets for the years ended December
31,  2001,  2000  and  1999  was  $1,380,000,  $34,960,000,  and  $2,194,000
respectively.

</TABLE>

7.   UNPAID  LOSSES  AND  LOSS  ADJUSTMENT  EXPENSES  (IN  THOUSANDS):

Activity in the liability for unpaid losses and LAE is summarized as follows (in
thousands):


<TABLE>
<CAPTION>
                                 2001      2000       1999
                               --------  ---------  --------
<S>                            <C>       <C>        <C>
Balance at January 1. . . . .  $113,149  $157,425   $140,484
Less reinsurance recoverables    19,979     3,411      1,301
                               --------  ---------  --------
Net balance at January 1. . .    93,370   154,014    139,183
                               --------  ---------  --------
Incurred related to:
Current year. . . . . . . . .    94,556   132,781    217,686
Prior years . . . . . . . . .       660   (19,013)    24,722
                               --------  ---------  --------
Total Incurred. . . . . . . .    95,216   113,768    242,408
                               --------  ---------  --------
Paid related to:
Current year. . . . . . . . .    69,917    89,612    126,526
Prior years . . . . . . . . .    62,682    84,800    101,051
                               --------  ---------  --------
Total paid. . . . . . . . . .   132,599   174,412    227,577
                               --------  ---------  --------
Net balance at December 31. .    55,987    93,370    154,014
Plus reinsurance recoverables    28,889    19,779      3,411
                               --------  ---------  --------
Balance at December 31. . . .  $ 84,876  $113,149   $157,425
                               ========  =========  ========
<FN>
Reserve  estimates are regularly adjusted in subsequent reporting periods as new
facts  and  circumstances  emerge  to  indicate that a modification of the prior
estimate  is necessary. The adjustment, referred to as "Reserve development," is
inevitable  given  the  complexities of the reserving process and is recorded in
the  statements  of  operations  in  the period when the need for the adjustment
becomes apparent. The foregoing reconciliation indicates unfavorable development
of  $660,000  on  the  December  31,  2000  reserves. The 2000 deficient reserve
development  resulted  primarily  from  a  higher  than  expected  frequency and
severity  on nonstandard automobile claims. The favorable reserve development of
$19,013,000 during 2000 resulted from a major restructuring and strengthening of
the  nonstandard  automobile claims function effective at the beginning of 2000.
At  that  time  SIG replaced its existing claims management team with new claims
management  that  improved  performance  of  the  claims  staff.


The  anticipated  effect  of  inflation is implicitly considered when estimating
losses  and  LAE liabilities. While anticipated price increases due to inflation
are  considered  in  estimating  the ultimate claims costs, increases in average
claim  severities  is  caused  by  a  number  of  factors. Future severities are
projected  based  on  historical  trends  adjusted  for  implemented  changes in
underwriting  standards,  policy  provisions,  claims  management  practices and
procedures,  and  general  economic  trends.  Anticipated  severity  trends  are
monitored  relative  to  actual  development  and  are  modified  if  necessary.

Liabilities  for  loss and LAE have been established when sufficient information
has  been developed to indicated the involvement of a specific insurance policy.
In addition, reserves have been established to cover additional exposure on both
known  and  unasserted  claims.
</TABLE>

8.   PREFERRED  SECURITIES:

On  August  12,  1997,  SIG's  trust subsidiary issued $135 million in preferred
securities  ("Preferred Securities") bearing interest at an annual rate of 9.5%.
The  principal  assets  of the trust subsidiary are senior subordinated notes of
SIG  in  the principal amount of $135 million with an interest rate and maturity
date  substantially  identical to those of the Preferred Securities. Expenses of
the  issue  aggregated  $5.1  million  and  are  amortized  over the term of the
Preferred  Securities.

The  Preferred  Securities  represent  SIG-obligated  mandatorily  redeemable
securities of SIG's trust subsidiary holding solely parent debentures and have a
term  of  30  years  with  semi-annual interest payments commencing February 15,
1998.  SIG  may  redeem  the  Preferred  Securities in whole or in part after 10
years.  The  annual  Preferred Security obligations of approximately $13 million
per  year  are  funded from SIG's nonstandard automobile management company. The
nonstandard  auto  funds are the result of management and billing fees in excess
of  operating costs. Under the terms of the indenture, SIG is permitted to defer
semi-annual  interest  payments  for  up to five years. SIG elected to defer the
interest payments due in February and August 2000 and 2001 and may continue this
practice  through  2004  (the  payment due in February 2002 was deferred). Given
SIG's  election  to  defer  past  interest  payments and option to continue this
practice  through  2004,  the  Company has reflected the preferred securities as
equity  securities  instead  of  debt.  As  such, gains on the redemption of the
preferred  securities  are  reflected  as  increases  to  contributed  surplus.

The  trust  indenture  for the Preferred Securities contains certain restrictive
covenants.  These  covenants are based upon SIG's consolidated coverage ratio of
earnings  before  interest,  taxes, depreciation and amortization ("EBITDA"). If
SIG's  EBITDA  falls  below  2.5  times consolidated interest expense (including
Preferred  Security  distributions)  for  the  most  recent  four  quarters  the
following  restrictions  become  effective:

-    SIG  may  not  incur  additional  indebtedness  or  guarantee  additional
     indebtedness.
-    SIG  may  not  make  certain  restricted  payments  including loans or
     advances to affiliates, common stock repurchases and dividends in excess of
     a  stated  limitation.
-    SIG  may  not  increase  its  level of non-investment grade securities
     defined  as  equities,  mortgage  loans, real estate, real estate loans and
     non-investment  grade  fixed  income  securities.

These  restrictions  currently  apply,  as SIG's consolidated coverage ratio was
(.90) in 2001 and will continue to apply until SIG's consolidated coverage ratio
is  in compliance with the terms of the trust indenture. SIG complied with these
additional restrictions as of December 31, 2001 and is in compliance as of March
29,  2002.  SIG  discovered it did not comply with the covenant dealing with the
percentage of investment in other than "Permitted Investments" as defined by the
indenture. The indenture allows for no more than 15% of total invested assets to
be  in  non-investment  grade securities as defined above. At December 31, 2001,
approximately  21%  of  SIG's  investment  portfolio  was  invested  in  equity
securities  and  non-investment  grade  bonds.  The  Company cured this covenant
violation  as  of March 29, 2002 via the sale of approximately $8 million of the
non-investment  grade  securities  and  the  reinvestment  of  the  proceeds  in
Permitted  Investments.

During  2001,  Granite  Re  purchased  Preferred  Securities bearing a principal
amount  of  $17,460,000. During 2000, Granite Re and Granite purchased Preferred
Securities  bearing  principal  amounts  of  $18,000,000  and  $5,000,000,
respectively.  As  a result, the Company's balance sheet as of December 31, 2001
presents  a net Preferred Securities balance of $94,540,000. The Company's total
purchases  of Preferred Securities resulted in an increase of $39,690,000 to the
Company's  consolidated  stockholders'  equity  as  of  December  31,  2001.

9.   CAPITAL  STOCK:

The  Company's  authorized  share  capital  consists  of:

(a)  First  Preferred  shares

An  unlimited  number of first preferred shares of which none are outstanding at
December  31,  2001  and  2000.


(b)  Common  Shares

An  unlimited  number  of  common  shares  of which 5,393,698 and 5,776,398 were
outstanding  as of December 31, 2001 and 2000, respectively. The Company did not
issue  any  common  shares  during  either  2001  or 2000. The Company purchased
382,700  of  its common shares for an aggregate consideration of $218,000 during
2001.  The  Company  purchased  100,000  of  its  common shares for an aggregate
consideration  of  $185,000  during  2000.


10.  INCOME  TAXES:

Goran  and  Granite  file  separate  Canadian  income  tax  returns.


SIGF  files  a  separate  U.S.  federal  income  tax  return.




<PAGE>
SIG  files  a  consolidated U.S. federal income tax return with its wholly-owned
subsidiaries.  Intercompany  tax  sharing  agreements  between  SIG  and  its
wholly-owned subsidiaries provide that income taxes will be allocated based upon
separate  return  calculations  in  accordance with the Internal Revenue Code of
1986,  as  amended.



A reconciliation of the differences between federal tax computed by applying the
U.S.  federal statutory rate of 35% to income before income taxes and the income
tax  provision  is  as  follows  (in  thousands):



<TABLE>
<CAPTION>

                                                     2001      2000       1999
                                                   --------  ---------  ---------
<S>                                                <C>       <C>        <C>
Computed income taxes (benefit) at statutory rate  $(7,975)  $(17,981)  $(15,682)
Goodwill. . . . . . . . . . . . . . . . . . . . .       --     12,176        779
Other . . . . . . . . . . . . . . . . . . . . . .    3,377     (4,154)      (619)
Tax Exempt (Income) Loss. . . . . . . . . . . . .     (223)    (3,443)        88
                                                   --------  ---------  ---------
Total . . . . . . . . . . . . . . . . . . . . . .  $(4,821)  $(13,402)  $(15,434)
                                                                        ---------
Valuation allowance . . . . . . . . . . . . . . .    4,821     11,253     21,852
                                                   --------  ---------  ---------
Income tax expense. . . . . . . . . . . . . . . .  $    --   $ (2,149)  $  6,418
                                                   ========  =========  =========
</TABLE>

<TABLE>
<CAPTION>

The  net  deferred  tax  asset at December 31, 2001 and 2000 is comprised of the
following  (in  thousands):


                                              2001      2000
                                            --------  --------
<S>                                         <C>       <C>
Deferred tax assets:
Unpaid losses and loss adjustment expenses  $ 1,358   $ 2,899
Unearned premiums. . . . . . . . . . . . .    1,159     2,633
Allowance for doubtful accounts. . . . . .    2,582     1,302
Unrealized losses on investments . . . . .      926     1,378
Net operating loss carryforwards . . . . .   26,705    25,764
Other. . . . . . . . . . . . . . . . . . .   15,732     8,758
                                            --------  --------
                 Deferred tax assets . . .  $48,462   $42,734
                                            --------  --------
Deferred tax liabilities:
Deferred policy acquisition costs. . . . .  $  (168)  $(2,259)
Other. . . . . . . . . . . . . . . . . . .   (1,157)     (892)
                                            --------  --------
Deferred Tax Liabilities . . . . . . . . .  $(1,325)  $(3,151)
                                            --------  --------
                                            $47,137   $39,583
                 Valuation allowance . . .   47,137    39,583
                                            --------  --------
                 Net deferred tax assets .  $    --   $    --
                                            ========  ========
<FN>

At December 31, 2001 the Company's net deferred tax assets are fully offset by a
valuation  allowance.  The  company  will  continue  to  assess  the  valuation
allowance  and  to  the extent it is determined that such allowance is no longer
required, the tax benefit of the corresponding portion of remaining net deferred
tax  assets  will  be  then  be  recognized.
</TABLE>

<TABLE>
<CAPTION>

As  of  December  31, 2001, the Company has unused net operating loss carryovers
available  as  follows  (in  thousands):


                          Goran &
Year expiring     SIG     Granite    SIGF    Total
                --------  --------  ------  -------
<S>             <C>       <C>       <C>     <C>
2002 . . . . .  $    126       649              775
2003 . . . . .               1,016            1,016
2004 . . . . .                 467              467
2005 . . . . .               1,659            1,659
2006 . . . . .               1,113            1,113
2007 . . . . .                 423              423
2017 . . . . .                      $ 4,368   4,368
2018 . . . . .                        1,295   1,295
2019 . . . . .    35,005        --      861  35,866
2020 . . . . .    17,096        --       47  17,143
2021 . . . . .                          311     311
Capital Losses        --     7,472      --    7,472
                --------  --------  ------  -------
TOTAL. . . . .  $ 52,227  $ 12,799  $6,882  $71,908
                ========  ========  ======  =======
<FN>

Approximately $12 million of SIG's total unused net operating loss carryover was
generated by the discontinued operations. The loss generated by the discontinued
operations  is  available  for  use  by  SIG's continuing operations. SIG's U.S.
Federal  income  tax  filings  for years prior to 2000 have been examined by the
U.S.  Internal  Revenue  Service.

</TABLE>


11.  LEASES:

The  Company  leases  buildings,  furniture,  cars and equipment under operating
leases.  Operating  leases generally include renewal options for periods ranging
from  two  to  seven  years  and  require  the  Company to pay utilities, taxes,
insurance  and  maintenance  expenses.

The  following  is  a schedule of future minimum lease payments under cancelable
and  non-cancelable  operating  leases  for  each  of  the five years succeeding
December  31,  2000  and  thereafter,  excluding renewal options (in thousands):


<TABLE>
<CAPTION>

Year Ending December 31:
<S>                       <C>
2002 . . . . . . . . . .  $1,449
2003 . . . . . . . . . .     499
2004 . . . . . . . . . .     202
2005 . . . . . . . . . .     131
2006 and Thereafter. . .     166
<FN>

Rental  expense  charged  to  operations  in  2001,  2000  and  1999 amounted to
$1,749,000,  $1,848,000,  and  $2,370,000,  respectively, including amounts paid
under  short-term  cancelable  leases.

</TABLE>


12.  REINSURANCE:

The  Company  limits  the  maximum net loss that can arise from a large risk, or
risks  in  concentrated areas of exposure, by reinsuring (ceding) certain levels
of  risks  with other insurers or reinsurers, either on an automatic basis under
general  reinsurance  contracts  known  as  "treaties"  or  by  negotiation  on
substantial  individual  risks. Such reinsurance includes quota share, excess of
loss,  stop-loss  and other forms of reinsurance on essentially all property and
casualty  lines  of  insurance.  The  Company  remains  contingently liable with
respect  to  reinsurance  ceded, which would become an ultimate liability of the
Company  in  the  event  that such reinsuring companies might be unable, at some
later  date,  to  meet  their  obligations  under the reinsurance agreements. In
addition,  the  Company  assumes  reinsurance  on  certain  risk.


The  Company  commuted  the accident year 2000 portion of the reinsurance treaty
with  National  Union Fire Insurance Company. The Company recognized the amounts
received from National as a reduction of losses and LAE paid (thereby increasing
losses  and LAE incurred) to recognize the effect of releasing National from its
obligations  under  the  treaty.  There was no effect on premiums earned, losses
incurred,  LAE  incurred  or commission in the 2001 income statement due to this
commutation.

The  Company  sold  100%  of its 2001 crop year business to Acceptance Insurance
Companies,  Inc.  ("Acceptance")  effective  June  6,  2001.  The agreements are
without  recourse as they relate to the net profit or loss on the 2001 crop year
book  of business. The sale was approved by the Indiana Department of Insurance.


Reinsurance  activity  for  2001, 2000 and 1999, which includes reinsurance with
related  parties,  is  summarized  as  follows  (in  thousands):



<TABLE>
<CAPTION>

                         2001                              Gross        Ceded       Net
                         ----                             -------       -----    ------
<C>   <S>                                            <C>    <C>           <C>          <C>
      Premiums written                                      $193,186  $(106,324)  $ 86,862
      Premiums earned                                        166,312    (58,115)   108,197
      Incurred losses and loss adjustment expenses           135,148    (39,932)    95,216
      Commission expenses (income)                            19,130    (25,716)   (6,586)

                         2000                               Gross . . .  Ceded      Net
                         ----                              -------       -----    ------
      Premiums written                                      $182,099  $ (78,637)  $103,462
      Premiums earned                                        200,278    (54,746)   145,532
      Incurred losses and loss adjustment expenses           154,929    (41,161)   113,768
      Commission expenses (income)                            22,275    (14,043)     8,232

                         1999                               Gross . . . . Ceded     Net
                         ----                               -------       -----    ------
      Premiums written                                       236,401      7,361    243,762
      Premiums earned                                        254,445      7,355    261,800
      Incurred losses and loss adjustment expenses           239,035      3,373    242,408
      Commission expenses (income)                            27,985        435     28,420
<FN>

Amounts  recoverable  from  reinsurers  relating  to  unpaid  losses  and  loss
adjustment expenses were $30,181,000 and $23,252,000 as of December 31, 2001 and
2000,  respectively.  These  amounts  are  reported as assets and are not netted
against  the liability for loss and LAE in the accompanying Consolidated Balance
Sheets.

</TABLE>


13.  RELATED  PARTY  TRANSACTIONS:

The  Company  and  its  subsidiaries have entered into transactions with various
related  parties  including  transactions  with  Symons International Group Ltd.
("SIGL"),  the  Company's  majority  shareholder.

The  following  balances  were  outstanding  at  December  31  (in  thousands):


<TABLE>
<CAPTION>


                                                       2001       2000
                                                     ---------  --------
<S>                                                  <C>        <C>
Gross amounts due from (to) directors and officers.  $  3,772   $ 2,054
Other gross amounts due from (to) related parties .     8,844     9,087
                                                     ---------  --------
Gross receivables (payables). . . . . . . . . . . .  $ 12,616   $11,141
Reserve for uncollectibility. . . . . . . . . . . .   (11,486)   (6,887)
                                                     =========  ========
Net receivables (payables). . . . . . . . . . . . .  $  1,130   $ 4,254
                                                     =========  ========
</TABLE>


<TABLE>
<CAPTION>

The  following  transactions  occurred  with  related parties in the years ended
December  31  (in  thousands):


                                                     2001    2000    1999
                                                    ------  ------  ------
<S>                                                 <C>     <C>     <C>
Consulting fees charged by various related parties  $ 800   $1,895  $3,652
Management fees charged by SIGL. . . . . . . . . .  $(100)  $  900  $  201
</TABLE>

Approximately  23%  and  50% of the amounts due from officers and directors were
non-interest-bearing  on  December  31,  2001  and  2000,  respectively.


SIG  paid  $-0-, $1,846,000 and $3,112,000 in 2001, 2000 and 1999, respectively,
for  consulting  and  other  services to a vendor owned in part by a relative of
certain directors of the Company. The consulting and other services were for the
conversion  of  SIG's  nonstandard  automobile operating system. SIG capitalized
these  costs  as  part  of  its  nonstandard  automobile  operating  system.
Approximately 90% of these payments are for services provided by consultants and
vendors  unrelated  to  the  Company.


In  1989,  the  Company fully reserved a loan owed by a subsidiary of SIGL. SIGL
guaranteed  the loan and pledged shares of Goran ("escrowed shares") as security
for the loan. The outstanding loan balance was $3,340,000 (Canadian dollars) for
the periods ending December 31, 2001 and 2000. This loan balance continues to be
guaranteed  by  SIGL  and is secured with 100,000 shares of Goran owned by SIGL.

The  Company  leases office space in Canada from a relative of certain directors
of  The  Company.  The rent paid was $35,000, $40,000 and $10,000 as of December
31,  2001,  2000  and  1999,  respectively.

In  1999,  Granite  Re  issued  a performance bond in favor of Tritech Financial
Systems  Inc. ("Tritech") in the amount of $328,000. In August 2000 the creditor
called  the  bond.  Tritech  is  owned by a relative of certain directors of the
Company.  The  bond is secured by a guarantee from Tritech, a personal guarantee
from  its president and 50,000 shares of Goran's common stock. Tritech is paying
interest  on the outstanding balance at a rate of 7.5%. Interest received during
the years ended December 31, 2001 and 2000 was $24,600 and $6,150, respectively.


In  December  2001,  Superior  Insurance  Group  obtained  a line of credit from
Granite  Re  in  the  total  amount  of $2.5 million. At December 31, 2001, $1.3
million  was outstanding under the line. This note bears interest at the rate of
prime  plus 5.25% for a total of 10.0% at December 31, 2001. Interest is payable
monthly  until  the  principal  becomes  due  on  December  20,  2004.



14.  REGULATORY  MATTERS:

Pafco  and  IGF  are  domiciled in Indiana and prepare their statutory financial
statements  in  accordance  with accounting practices prescribed or permitted by
the  Indiana  Department  of Insurance ("IDOI"). While neither Pafco nor IGF has
surplus from which to pay dividends, statutory requirements place limitations on
the  amount of funds that can be remitted to SIG from Pafco and IGF. The Indiana
statute  allows 10% of surplus in regard to policyholders or 100% of net income,
whichever is greater, to be paid as dividends only from earned surplus; however,
the  Consent  Orders with the IDOI, described below, prohibit the payment of any
dividends  by  Pafco and IGF. Superior, Superior American and Superior Guaranty,
are  domiciled  in  Florida  and prepare their statutory financial statements in
accordance  with  accounting  practices  prescribed  or permitted by the Florida
Department  of Insurance ("FDOI"). The Florida statute also contains limitations
with regard to the payment of dividends. Superior may pay dividends of up to 10%
of  surplus  or  100%  of net income, whichever is greater, from earned surplus.
Prescribed  statutory  accounting practices include a variety of publications of
the  National  Association of Insurance Commissioners ("NAIC"), as well as state
laws,  regulations,  and  general  administrative  rules.  Permitted  statutory
accounting  practices  encompass  all  accounting  practices  not so prescribed.

On  June  6,  2001  IGF  sold  substantially all of its crop insurance assets to
Acceptance.  On June 24, 2001, following the sale of IGF's crop insurance assets
and  as  a result of losses experienced by IGF in its crop insurance operations,
the  IDOI and IGF entered into a Consent Order (the "Consent Order") relating to
IGF.  IGF has discontinued writing new business and its operations are presently
in  run  off.

The IDOI has continued to monitor the status of IGF. The Consent Order prohibits
IGF  from  taking  any of the following actions without prior written consent of
the  IDOI:

-    Sell  or  encumber any of its assets, property, or business in force,
-    Disburse  funds,  except  to pay direct unaffiliated policyholder
     claims  and  normal  operating  expenses  in  the  ordinary  course of
     business  (which does not include payment to affiliates except for the
     reimbursement  of  costs  for running IGF by SIG, and does not include
     payments  in  excess  of  $10,000),
-    Lend  its funds or make investments, except in specified types of
     investments,
-    Incur  debts  or  obligations,  except  in the ordinary course of
     business  to  unaffiliated  parties,
-    Merge  or  consolidate  with  another  company,
-    Enter  into  new,  or  amend  existing,  reinsurance  agreements,
-    Complete, enter into or amend any transaction or arrangement with
     an  affiliate,  or
-    Disburse  funds  or  assets  to  any  affiliate.

The  Consent Order requires IGF to provide the IDOI with monthly written updates
and  immediate notices of any material change regarding the status of litigation
with  Mutual  Service  Casualty  Insurance Company and with Continental Casualty
Company,  statutory  reserves,  number  of  non-standard  automobile  insurance
policies in-force by state, and reports of all non-claims related disbursements.
IGF's  failure  to  comply  with the Consent Order could cause the IDOI to begin
proceedings  to  have  a rehabilitator or liquidator appointed for IGF to extend
the  provisions  of  the  Consent  Order.

While  IGF  is  prohibited from writing any new business pursuant to the Consent
Order,  the  departments of insurance of Florida, Illinois, Minnesota, Missouri,
Nebraska,  Virginia  and  South  Carolina  have  required  IGF  to cease writing
business  in those states. IGF has also agreed with the departments of insurance
of  Texas  and  Washington  to  note  write  business  in  those states, and IGF
presently  intends  to surrender its certificates of authority in most states in
which  it  operated  prior  to  the  sale  to  Acceptance.

As  a  result  of  the  Consent  Order,  IGF  was  prohibited  from  writing new
non-standard  automobile insurance in Pennsylvania after July 31, 2001. Prior to
July  31,  2001,  the  non-standard  automobile  insurance  policies  written in
Pennsylvania  by  IGF accounted for approximately 10% of the total gross written
premiums  of  SIG. During the third quarter of 2001, the Pennsylvania Department
of  Insurance  determined that it would not permit new business to be written in
that  state  by  Superior or the Company's other insurance company subsidiaries.
Consequently,  total  written  premiums  for  2001  were  less than anticipated.

Pafco  has  been  subject to an agreed to order the IDOI since February 17, 2000
which  requires  Pafco,  among  other  matters,  to:

-    Refrain  from doing any of the following without the IDOI's prior
     written  consent:  (i)  selling  assets  or  business  in  force  or
     transferring property, except in the ordinary course of business; (ii)
     disbursing  funds,  other  than  for  specified purposes or for normal
     operating  expenses and in the ordinary course of business (which does
     not include payments to affiliates, other than under written contracts
     previously  approved  by  the  IDOI,  and does not include payments in
     excess  of  $10,000);  (iii)  lending  funds; (iv) making investments,
     except  in  specified types of investments; (v) incurring debt, except
     in  the  ordinary course of business and to unaffiliated parties; (vi)
     merging  or consolidating with another company; or (vii) entering into
     new,  or  modifying  existing,  reinsurance  contracts.

-    Reduce  its  monthly  auto premium writings, or obtain additional
     statutory  capital  or  surplus,  such that the ratio of gross written
     premium  to surplus and net written premium to surplus does not exceed
     4.0  and  2.4, respectively; and provide the IDOI with regular reports
     demonstrating  compliance  with  these  monthly  writings limitations.

-    Continue  to  comply  with  prior  IDOI  agreements and orders to
     correct  business  practices  under  which  Pafco must provide monthly
     financial  statements  to  the  IDOI,  obtain  prior  IDOI approval of
     reinsurance  arrangements  and  affiliated  party transactions, submit
     business  plans  to  the  IDOI  that address levels of surplus and net
     premiums  written,  and  consult  with  the  IDOI  on a monthly basis.

Pafco's inability or failure to comply with any of the above could result in the
IDOI  requiring  further  reductions in Pafco's permitted premium writings or in
the  IDOI  instituting future proceedings against Pafco. Restrictions on premium
writings  result  in  lower  premium volume. Management fees payable to Superior
Group are based on gross written premium; therefore lower premium volume results
in  reduced  management  fees  paid  by  Pafco.

Pafco  has  agreed  with the Iowa Department of Insurance ("IADOI") that it will
not  write  any  new non-standard business in Iowa, until such time as Pafco has
reduced  its  overall non-standard automobile policy counts in the state or has:
-     Increased  surplus,  or
-     Has  achieved a net written premium to surplus ratio of less than
      three  to  one,  or
-     Has  surplus  reasonable  to  its  risk.
Pafco has continued to service existing policyholders and renew policies in Iowa
and  provide  policy  count  information  on a monthly basis in conformance with
IADOI  requirements.

Superior and Pafco also provide monthly financial information to the departments
of  insurance  in  certain  states  in  which they write business, and Pafco has
agreed  to  obtain IDOI prior approval of any new affiliated party transactions.

The  financial  review  of  Superior for the year ended December 31, 1999 by the
FDOI  has  been completed and the FDOI issued its final report during the fourth
quarter  of  2001. The FDOI's final report recommended additional examination of
compliance  issues  and financial records accuracy for years subsequent to 1999.
The  FDOI  took  no  further  action.

On  July  7, 2000, the FDOI issued a notice of its intent to issue an order (the
"Notice") which principally addressed certain policy and finance fee payments by
Superior to Superior Group. A formal administrative hearing to review the Notice
and  a determination that the order contemplated by the Notice not be issued was
held  in February 2001. The administrative law judge entered a recommended order
on  June  1,  2001  that  was  acceptable  to  SIG. On August 30, 2001, the FDOI
rejected  the  recommended  order  and issued its final order which SIG believes
improperly  characterized  billing  and policy fees paid by Superior to Superior
Group. Superior filed an appeal of the final order to Florida District Court. On
March  4,  2002,  the  FDOI  filed a petition in the Circuit Court of the Second
Judicial  Circuit  in and for Leon County, Florida which seeks court enforcement
of  the  FDOI's final order. Superior filed a motion with the FDOI for a stay of
the  FDOI's final order. Superior also filed a motion with the District Court of
Appeals  that was denied pending a ruling from the FDOI on Superior's motion for
stay.

In  1999,  Superior ceased writing business in Illinois and agreed to obtain the
approval  of  the  Illinois  Department  of  Insurance  prior to writing any new
business  in  Illinois.  In  July  2001,  Superior agreed with the Department of
Insurance  in Texas to obtain its prior approval before writing any new business
in  that state. On October 9, 2001, the State Corporation Commission of Virginia
issued  an order to take notice regarding an order suspending Superior's license
to  write  business  in  that  state, which Superior believes is unwarranted. An
administrative  hearing  for  a  determination  that the suspension order not be
issued  was  held  March  5, 2002. The nonstandard automobile insurance policies
written in Virginia by Superior accounted for approximately 13.1% of SIG's total
gross  written  premiums  in  2001.  A  decision  has not yet been rendered, and
although Superior does not expect an adverse decision, Superior would appeal any
decision  that  prohibits  it  from  writing  business  in  Virginia.

SIG's  operating subsidiaries, their business operations, and their transactions
with  affiliates,  including SIG, are subject to regulation and oversight by the
IDOI,  the  FDOI,  and  the  insurance  regulators  of other states in which the
subsidiaries  write business. SIG is a holding company and all of its operations
are  conducted  by  its  subsidiaries.  Regulation  and  oversight  of insurance
companies and their transactions with affiliates is conducted by state insurance
regulators  primarily  for  the  protection  of  policyholders  and  not for the
protection of other creditors or of shareholders. Failure to resolve issues with
the  IDOI  and  the  FDOI  or  other  state  insurance  regulators in a mutually
satisfactory  manner  could  result  in future regulatory actions or proceedings
that  materially  and  adversely  affect  the  Company.

The  NAIC  adopted  the Codification of Statutory Accounting Principles guidance
("Codification"), which replaces the Accounting Practices and Procedures manual,
as  the  NAIC's  primary  guidance  on statutory accounting effective January 1,
2001.  The  IDOI  and  FDOI  have  adopted  Codification.

The changes in statutory accounting principles resulting from Codification which
impact  the Company's U.S. insurance subsidiaries, among other things, limit the
statutory  carrying  value  of electronic data processing equipment and deferred
tax  assets in determining statutory surplus. The consolidated statutory surplus
of  the  Company's U.S. insurance subsidiaries as of December 31, 2001 was $21.9
million.

15.  COMMITMENTS  AND  CONTINGENCIES:

As  previously  reported,  IGF  had  been  a  party to a number of pending legal
proceedings  and  claims  relating  to  agricultural  production  interruption
insurance  policies (the "AgPI Program") which were sold during 1998. All of the
policies of insurance, which were issued in the AgPI Program, were issued by and
under the name of Mutual Service Casualty Insurance Company ("MSI"), a Minnesota
corporation  with  its  principal  place  of  business  located  in Arden Hills,
Minnesota.  Sales  of this product resulted in large underwriting losses by IGF.

Approximately  $29  million  was paid through December 31, 2001 in settlement of
legal proceedings and claims related to the AgPI Program, with payments totaling
approximately  $359,000  during  2001.  SIG  reduced reserves related to AgPI by
approximately  $7  million  during  2001.  SIG  has  retained  a  reserve  of
approximately  $3  million as a provision for expenses and settlement of ongoing
litigation.

All policyholder claims had been settled during 2000. On January 12, 2001 a case
was  filed  in  the Superior Court of California, County of Fresno, entitled S&W
Seed  Company,  Dudley  Silveira,  Ric  Blanchard and Darrell Silveira v. Mutual
Service  Casualty  Insurance  Company,  IGF  Insurance  Company,  and  Dibuduo &
Defendis Insurance Agency, Inc.; Case No. OICE CG 00137. The case was brought by
four AgPI policyholders who had previously settled their AgPI claims pursuant to
binding  settlement agreements who now seek additional compensation by asserting
through  litigation  that  IGF  and  the  third party carrier paid less than the
policy  limits  they  were promised when they purchased the policy and that each
settling  policyholder was forced to accept the lesser amount due their economic
duress - a legal theory recognized in California if certain elements of economic
duress  can  be  established.  Discovery is proceeding. On January 16, 2002, the
court  entered  an order granting IGF's motion for judgment on the pleadings and
required  plaintiffs  to  show  an  insurable interest. Plaintiffs amended their
complaint  attempting to allege an insurable interest and on March 19, 2002, the
court  granted IGF's demurrer to the amended complaint. In granting the demurrer
the court held that any recovery payable to plaintiffs would be limited to their
actual  economic  losses regardless of how much plaintiffs thought they had been
promised  (i.e. plaintiffs cannot be paid policy limits without regard to actual
losses  incurred).  The  plaintiffs  have  ten (10) days in which to again amend
their  complaint.

IGF  remains  a  defendant/cross-complainant in eight lawsuits pending in Fresno
County,  California,  which  relate  to  the  cross-claims  between  the selling
brokers, MSI and IGF. These lawsuits have been consolidated for all purposes and
discovery  is  proceeding.

IGF  and  MSI  are engaged in arbitration with respect to responsibility for the
AgPI  program  settlements.  The  arbitration commenced in December 2000 and the
parties  had  their  first  meeting  with  the  panel  on Mary 22, 2001. At that
meeting,  MSI  moved  for  an  order  requiring IGF to post pre-hearing security
through  the  issuance  of a letter of credit in the amount of $39 million. Over
IGF's  objection,  in  a  two to one vote, the panel ordered IGF to post the $39
million security by June19, 2001. IGF sought relief from the order in the United
States  District  Court  for  the  District  of New Jersey but was unsuccessful.

On  November  7,  2001,  the arbitration panel considered a petition for default
judgment against IGF based on IGF's failure to post the pre-hearing security. On
November  23,  2001,  the arbitration panel issued an order denying MSI's motion
for default judgment and requiring IGF to place $600,000 in an escrow account to
cover  MSI's  prospective  legal expenses. The panel also continued its original
order  that  required  IGF  to  post the $39 million security. IGF has deposited
$600,000 into an escrow account as required by the arbitration panel but has not
posted  the  $39  million  letter  of credit and is financially unable to do so.

On June 25, 2001, MSI filed a complaint for preliminary and permanent injunctive
relief  and  damages  (the  "MSI Complaint") against SIG, IGF, IGFH, Granite Re,
Goran  and  certain affiliates of those companies, as well as certain members of
the  Symons  family,  and Acceptance in the United States District Court for the
Southern  District  of Indiana, Indianapolis Division. The MSI Complaint alleges
that the June 6, 2001 transfer of IGF's assets to Acceptance and the payments by
Acceptance  to  SIG, Goran and Granite Re violated Indiana law and are voidable.
In addition, the MSI Complaint alleges that Acceptance, SIG, Goran, IGFH and the
Symons  Family  are  liable to MSI for the entire $39 million claim which MSI is
asserting  against  IGF  in  the arbitration proceeding on theories of successor
liability and "piercing the corporate veil." The MSI Complaint seeks preliminary
and  permanent  injunctive  relief  against the defendants, an order voiding the
various  transactions  between and among the defendants and an order determining
that  the defendants are directly responsible to MSI for MSI's $39 million claim
against  IGF.

The  defendants  filed  answers  to  the  MSI  Complaint  denying  the  material
allegations  and  asserting affirmative defenses to the MSI Complaint. A hearing
on  MSI's  Motion for Preliminary Injunctive Relief was held Thursday, August 2,
2001.  On August 3, 2001, the court denied MSI preliminary injunctive relief. On
January  7,  2002,  MSI  filed  an  amended complaint which added Superior Group
Management,  Superior  Group, Superior and Pafco as defendants (the "MSI Amended
Complaint"). The MSI Amended Complaint asserts claims substantively identical to
the  claims  in  the  MSI  Complaint. On February 21, 2002, the defendants filed
answers  to  the  MSI  Amended  Complaint  and  denied  the material allegations
contained  in  the  MSI  Amended  Complaint  and  asserted affirmative defenses.

Should  MSI  be  successful in obtaining permanent injunctive relief against the
Company and/or its affiliates, any such relief would have an adverse impact upon
the  Company  and  its  affiliates  and  their respective assets and operations.
Further,  in  the  event  MSI  is successful in voiding the various transactions
between the defendants or the defendants are determined to be responsible to MSI
for  MSI's  $39  million claim against IGF, those orders and determinations also
could  have  an  adverse  effect  upon  the Company and its affiliates and their
respective  assets  and  operations.

As  previously  reported  in Goran's Form 8-K filed on August 2, 2001, SIG, IGFH
and IGF, are parties to a "Strategic Alliance Agreement" dated February 28, 1998
(the  "SAA")  with  Continental  Casualty Company ("CNA"), pursuant to which IGF
acquired  certain  crop  insurance  operations  of  CNA.  Through  reinsurance
agreements,  CNA  was  to  share  in IGF's profits or losses on IGF's total crop
insurance business. By letter dated January 3, 2001, CNA gave notice pursuant to
the  SAA of its exercise of the "Put Mechanism" under the SAA effective February
19,  2001.  According  to  the  SAA, upon exercise of the Put Mechanism, IGFH is
obligated  to pay CNA an amount equal to 5.85 times "Average Pre-Tax Income", an
amount  based  in  part upon payments made to CNA under the SAA. The SAA further
provided  that  30 days after exercise of the Put, IGF will execute a promissory
note  payable  six  months after the exercise of the Put in the principal amount
equal  to  the amount owed, as specified by the SAA. In a letter dated March 20,
2001,  CNA  also  asserted  a  claim for amounts allegedly due under reinsurance
agreements  for  the  2000  crop  year.

Also,  as  previously  reported in Goran's Form 8-K filed on August 2, 2001, SIG
believes  it  has  claims  against  CNA  and  defenses  to  CNA's claim that may
ultimately  offset  or  reduce  amounts  owed  to  CNA.  SIG  and CNA engaged in
discussions  regarding  possible  alternatives  for  the  resolution  of  their
respective  claims against each other. Those discussions ultimately proved to be
unsuccessful.

Following  the failure of settlement discussions, on June 4, 2001, IGF, IGFH and
SIG  filed  a  complaint  against CNA (the "IGF Complaint") in the United States
District  Court for the Southern District of Indiana, Indianapolis Division. The
IGF  Complaint  asserts  claims  against CNA for fraud and constructive fraud in
connection  with the SAA and breach of contract and seeks relief against CNA for
compensatory  and  punitive  damages.  On  June 27, 2001, CNA filed its "Answer,
Separate  Defenses and Counterclaim", in which CNA generally denied the material
allegations  of the IGF Complaint and asserted various defenses to those claims.

On  June  6, 2001, CNA filed a complaint against IGF, IGFH and SIG in the United
States  District  Court  for  the  Southern  District  of  Indiana, Indianapolis
Division  (the  "CNA  Complaint"), asserting claims based on the SAA and related
agreements  for  approximately  $25  million allegedly owed CNA by virtue of its
exercise  of  the  Put  Mechanism,  $3  million  for amounts allegedly due under
reinsurance  agreements for the 2000 crop year, $1 million for certain "fronting
costs," and $1 million pursuant to a note executed by IGFH to CNA's affiliate in
connection  with  the  acquisition  by IGFH of North American Crop Underwriters,
Inc.  in 1998. CNA also asserted claims to the effect that the June 6, 2001 sale
of  IGF  assets  to  Acceptance  resulted in payments of funds to Goran, SIG and
Granite  Re, which funds allegedly should have been paid to IGF instead. On June
6,  2001,  CNA  asked  the district court to enter a temporary restraining order
preventing  IGF, IGFH and SIG from disposing of the proceeds received by them in
connection  with  the sale of IGF assets to Acceptance. In an emergency hearing,
the  court  denied  CNA  the  relief  it  requested,  without  prejudice  to
reconsideration  of those issues at a future time. CNA has since amended the CNA
Complaint  to  add  Goran  and  Granite  Re as defendants. CNA's counterclaim in
response  to  the  IGF Complaint asserts essentially the same claims against the
same  parties  as  the  amended  CNA  Complaint.

On  September  20,  2001  the court ordered a consolidation of the two cases. On
December 4, 2001, CNA filed an Amended Answer and Counterclaim that added Pafco,
Superior  and  certain  members of the Symons family as counterdefendants. CNA's
Amended  Answer and Counterclaim also alleges that IGF, IGFH, SIG, and the other
counterdefendants  are  alter  egos of each other and are directly liable to CNA
for  its  claims. Discovery in the case is proceeding. Although SIG continues to
believe  that  it  has claims against CNA and defenses to CNA's claims which may
offset  or reduce amounts owing by SIG or its affiliates to CNA, there can be no
assurance that the ultimate resolution of the claims asserted by CNA against SIG
and  its  affiliates  will not have a material adverse effect upon the Company's
and  its  affiliates'  financial  condition  or  results  of  operations.

The  California Department of Insurance ("CDOI") filed a Notice of Noncompliance
against  Superior  on June 29, 2001, which alleged that broker fees were charged
by  independent  brokers in violation of California law. SIG and the CDOI agreed
to  a  resolution  of  the  matters  raised  in the Notice of Noncompliance by a
Stipulation  and  Consent  Order  entered  on December 26, 2001 wherein Superior
agreed  to pay the CDOI a penalty in the amount of $200,000 in settlement of the
action.

The  Company  is a defendant in a case filed on February 23, 2000, in the United
States District Court for the Southern District of Indiana entitled Robert Winn,
et  al. v. Symons International Group, Inc., et al., Cause No. IP 00-0310-C-B/S.
Other  parties  named  as  defendants are SIG, three individuals who were or are
officers  or  directors  of  SIG  or  of  Goran,  PricewaterhouseCoopers LLP and
Schwartz  Levitsky  Feldman, LLP. The case purports to be brought on behalf of a
class consisting of purchasers of SIG's stock or Goran's stock during the period
February  27,  1998, through and including November 18, 1999. Plaintiffs allege,
among  other  things,  that  defendants  misrepresented the reliability of SIG's
reported  financial statements, data processing and financial reporting systems,
internal  controls  and  loss  reserves  in  violation  of  Section 10(b) of the
Securities  Exchange  Act  of  1934  ("1934 Act") and SEC Rule 10b-5 promulgated
thereunder.  The  individual  defendants  are  also  alleged  to  be  liable  as
"controlling  persons" under Sec.20(a) of the 1934 Act. The Company, SIG and the
individual  defendants  filed  a  motion  to  dismiss  the  amended consolidated
complaint  for  failure  to  state  a  claim  and  for  failure  to  plead  with
particularity  as  required  by  Fed. R. Civ. P.9 (b) and the Private Securities
Litigation  Reform  Act  of  1995.  The  accounting  firms also filed motions to
dismiss.  On  February  19,  2002  the  court granted in part and denied in part
defendants'  motion  to  dismiss.  On  March  15,  2002 the Company, SIG and the
individual  defendants  filed a motion for reconsideration of the court's ruling
on  the  motion  to  dismiss,  or  alternatively to certify an order for appeal.

Superior  is  a  defendant  in  a case filed on May 8, 2001 in the United States
District  Court  for  the Southern District of Florida entitled The Chiropractic
Centre,  Inc.  v.  Superior  Insurance  Company  which purports to be brought on
behalf  of a class consisting of healthcare providers improperly paid discounted
rates  on  services  to patients based upon a preferred provider contract with a
third  party.  The  plaintiff  alleges  that  Superior  breached  a  third party
beneficiary  contract,  committed  fraud and engaged in racketeering activity in
violation  of federal and Florida law by obtaining discounted rates offered by a
third  party  with whom the plaintiff contracted directly. On September 28, 2001
the  case  was consolidated with fifteen or more similar actions. On October 29,
2001  Superior  filed  a  motion to dismiss the action for lack of jurisdiction,
which  is  pending.  Superior  intends  to  vigorously defend the claims brought
against  it.

IGF  is  a  defendant in a declaratory action entitled Kevin L. Stevens, Bank of
America,  Conservator  of the Estate of Samuel Jay Ramsey and Gael Ramsey v. IGF
Insurance  Company originally filed on February 21, 2001 in the Circuit Court of
Green  County,  Missouri.  The  action  was  subsequently removed to the Federal
District  Court  for  the Western District of Missouri. On October 11, 2001, the
Federal  District  Court  granted declaratory judgment in favor of the Company's
insured,  Stevens,  and held that IGF was responsible for payment of the premium
attributable  to  a  $15,000,000 appeal bond for Stevens' appeal from a judgment
against  him in a related personal injury action. IGF believes that the District
Court  erred  in  granting declaratory judgement for Stevens and in holding that
IGF  is  responsible for payment of the premium on the bond. IGF has appealed to
the  United  States  Court of Appeals for the Eighth Circuit for relief from the
declaratory judgment. In the event IGF is ultimately required to pay the premium
on  the  appeal bond, it would have a material adverse impact on IGF's financial
position.

Superior  is a defendant in a case filed September 15, 2000 in the Circuit Court
for  Lee  County, Florida entitled Charles L. Fulton, D.C. v. Superior Insurance
Company.  The case is purported to be brought on behalf of a class consisting of
healthcare  providers that rendered treatment to and obtained a valid assignment
of  benefits  from  persons  insured  by  Superior. The court granted Superior's
motions  to  dismiss  the  original and amended complaints but denied Superior's
motion  to  dismiss  the  second  amended  complaint.  The  court  is permitting
plaintiff  to  go  forward  with  class  discovery.  The  plaintiff alleges that
Superior  reduced or denied claims for medical expenses payable to the plaintiff
without  first  obtaining  a  written  report  in  violation of Florida law. The
plaintiff  also  alleges  that  Superior  inappropriately  reduced the amount of
benefits  payable  to  the  plaintiff  in  breach  of  Superior's  contractual
obligations to the plaintiff. Superior believes the allegations of wrongdoing in
violation  of  law are without merit and intends to vigorously defend the claims
brought  against  it.

Superior  is  a  defendant  in  a  case  now entitled Oviedo Family Chiropractic
Center,  P.A. v. Superior Insurance Company originally filed February 4, 2000 in
the Circuit Court for Dade County, Florida and entitled Medical Re-Hab Center v.
Superior  Insurance Company. The court granted Superior's motions to dismiss the
original  and  first  amended  complaints.  The plaintiff has filed a motion for
leave  to file a second amended complaint which is pending. The case purports to
be  brought  on  behalf  of  a class consisting of (i) healthcare providers that
rendered  treatment  to Superior insureds and claimants of Superior insureds and
(ii)  such  insureds  and claimants. The plaintiff alleges that Superior reduced
medical  benefits  payable  and  improperly  calculated interest in violation of
Florida  law.  Superior  believes  the  claim  is  without  merit and intends to
vigorously  defend  the  charges  brought  against  it.

Superior  Guaranty  is  a  defendant  in a case filed on October 8, 1999, in the
Circuit  Court for Manatee County, Florida entitled Patricia Simmons v. Superior
Guaranty Insurance Company. The case purports to be brought on behalf of a class
consisting  of  purchasers  of  insurance  from Superior Guaranty. The plaintiff
alleges  that  the  defendant  charged  interest  in  violation  of Florida law.
Superior  Guaranty believes that the allegations of wrongdoing as alleged in the
complaint  are without merit and intends to vigorously defend the claims brought
against  it.

Superior  Guaranty  is  a defendant in a case filed on November 26, 1996, in the
Circuit  Court  for  Lee County, Florida entitled Raed Awad v. Superior Guaranty
Insurance  Company,  et al. The case purports to be brought on behalf of a class
consisting  of  purchasers  of  insurance from Superior Guaranty. The plaintiffs
allege  that  the defendant charged premium finance service charges in violation
of Florida law. Superior Guaranty believes that the allegations of wrongdoing as
alleged  in the complaint are without merit and intends to vigorously defend the
claims  brought  against  it.

On  July  7,  2000 the FDOI issued a notice of its intent to issue an order (the
"Notice") which principally addressed certain policy and finance fee payments by
Superior to Superior Group. A formal administrative hearing to review the Notice
and  a determination that the order contemplated by the Notice not be issued was
held  in February 2001. The administrative law judge entered a recommended order
on June 1, 2001 that was acceptable to SIG. On August 30, 2001 the FDOI rejected
the  recommended  order and issued its final order which SIG believes improperly
characterizes  billing  and  policy  fees  paid  by  Superior to Superior Group.
Superior  filed  an  appeal of the final order to the Florida District Court. On
March  4,  2002,  the  FDOI  filed a petition in the Circuit Court of the Second
Judicial  Circuit in and for Leon County, Florida which seeks enforcement of the
FDOI's final order. Superior filed a motion with the FDOI for stay of the FDOI's
final  order.  Superior  also  filed a motion with the District Court of Appeals
that  was  denied  pending  a  ruling  from  FDOI on Superior's motion for stay.

See  note  14,  "REGULATORY  MATTERS",  for  additional  legal matters involving
insurance  regulatory  matters.

The  Company's insurance subsidiaries are parties to other litigation arising in
the  ordinary  course  of  business.  The  Company  believes  that  the ultimate
resolution  of  these  lawsuits  will  not have a material adverse effect on its
financial  condition  or  results of operations. The Company, through its claims
reserves,  reserves  for  both  the  amount of estimated damages attributable to
these  lawsuits  and  the  estimate  costs  of  litigation.

The  Company  and  its  subsidiaries  are  named  as defendants in various other
lawsuits  relating to their business. Legal actions arise from claims made under
insurance  policies  issued  by  the  Company's  subsidiaries.  The  Company  in
establishing  its  loss  reserves  has  considered  these  actions.  The Company
believes  that  the  ultimate  disposition of these lawsuits will not materially
affect  the  Company's  operations  or  financial  position.

SIG  is  a  50%  owner in a limited liability corporation ("LLC") established to
provide  business services to the Company and an unrelated third party. The fair
market  value of the LLC's operating assets approximated its outstanding debt at
December  31,  2001.


16.  SUPPLEMENTAL  CASH  FLOW  INFORMATION:

Cash paid/(received) for income taxes and interest are summarized as follows (in
thousands):


<TABLE>
<CAPTION>

                                                               2001     2000      1999
                                                               -----  --------  ---------
<S>                                                            <C>    <C>       <C>
Cash paid/(received) for federal income taxes, net of refunds  $  --  $(6,134)  $(17,952)
Cash paid for interest on trust preferred . . . . . . . . . .  $  --  $    --   $ 12,825
</TABLE>


17.  DISCLOSURES  ABOUT  FAIR  VALUES  OF  FINANCIAL  INSTRUMENTS:

The  following  discussion  outlines  the  methodologies and assumptions used to
determine  the  estimated  fair  value  of  the Company's financial instruments.
Considerable judgment is required to develop these fair values and, accordingly,
the  estimates shown are not necessarily indicative of the amounts that would be
realized  in  a  one-time,  current  market  exchange  of  all  of the Company's
financial  instruments.


a)        FIXED  MATURITY,  EQUITY  SECURITIES, AND OTHER INVESTMENTS: Fair
          values  for  fixed  maturity and equity securities are based on quoted
          market  prices.
b)        SHORT-TERM  INVESTMENTS,  AND  CASH  AND  CASH  EQUIVALENTS:  The
          carrying  value  for  assets classified as short-term investments, and
          cash  and  cash  equivalents  in the accompanying Consolidated Balance
          Sheets  approximates  their  fair  value.

c)        SHORT-TERM  DEBT:  The  carrying  value  for  short-term  debt
          approximates  fair  value.

d)        PREFERRED  SECURITIES:  There  is  not  an  active market for the
          Preferred  Securities;  however,  the  estimated  market  value of the
          entire  issue  as  of  December  31,  2001  was  $9,000,000.

18.  STOCK  OPTION  PLANS:

In  June  1986, Goran adopted the Goran Capital Inc. 1986 Stock Option Plan (the
"Goran  Stock  Option  Plan").  The  Goran  Stock Option Plan provides Goran the
authority  to  grant  nonqualified  stock options and incentive stock options to
officers  and key employees of Goran and its subsidiaries and nonqualified stock
options  to  non-employee  directors  of  Goran. Options have been granted at an
exercise  price  equal  to  the  fair market value of the Goran stock at date of
grant.  The  outstanding  stock  options  vest and become exercisable at varying
terms  ranging  from  immediate vesting to equal installments over terms up to 5
years.  On  June  15,  1999,  all  Goran options granted at an exercise price in
excess  of  CDN$14.70,  were  repriced  to CDN$14.70 per share. In 2000, certain
officers  and  non-employee  directors  of  Goran surrendered a total of 515,771
stock  options.


<PAGE>
Information  regarding  the  Goran  Stock  Option  Plan  is summarized below (in
Canadian  dollars):



<TABLE>
<CAPTION>

                                        2001              2000             1999
                                        Weighted          Weighted        Weighted
                                        Average           Average         Average
                                        Exercise          Exercise        Exercise

                               Shares   Price    Shares    Price    Shares   Price
                               -------  ------  ---------  ------  --------  ------
<S>                            <C>      <C>     <C>        <C>     <C>       <C>
Outstanding at the beginning
 of the year. . . . . . . . .  195,937  $ 8.36   660,708   $14.17  695,572   $29.92
Granted . . . . . . . . . . .  633,750  $ 0.90   100,000   $ 2.35       --       --
Exercised . . . . . . . . . .       --      --        --       --       --       --
Forfeited/Surrendered . . . .   38,500  $14.16  (564,771)  $14.15  (34,864)  $14.69
                               -------          ---------          --------
Outstanding at the end of the
 Year . . . . . . . . . . . .  791,187  $ 2.09   195,937   $ 8.36  660,708   $14.17
                               =======          =========          ========
Options exercisable at year
 End. . . . . . . . . . . . .  682,520  $ 2.29    88,605   $14.62  619,035   $14.18
Available for future grant. .   79,813      --   675,063       --  210,292       --
</TABLE>


On November 1, 1996, SIG adopted the Symons International Group, Inc. 1996 Stock
Option  Plan  (the  "SIG Stock Option Plan"). The SIG Stock Option Plan provides
SIG  the  authority  to  grant  nonqualified  stock  options and incentive stock
options  to  officers  and  key  employees  of  SIG  and  its  subsidiaries  and
nonqualified  stock  options  to nonemployee directors of SIG and Goran. Options
have  been  granted  at  an exercise price equal to the fair market value of the
SIG's  stock  at  date  of  grant. All of the outstanding stock options vest and
become  exercisable  in  three equal installments on the first, second and third
anniversaries  of  the  date of grant. On October 14, 1998, all SIG options were
repriced  to  $6.3125  per  share.  In  November  1999,  certain  officers  and
non-employee  directors  of  SIG surrendered a total of 1,153,600 stock options.


Information  regarding  the  SIG  Stock  Option  Plan  is  summarized  below:


<TABLE>
<CAPTION>

                                         2001                2000                  1999
                                         Weighted            Weighted              Weighted
                                         Average             Average               Average
                                         Exercise            Exercise              Exercise

                               Shares     Price     Shares     Price     Shares     Price
                             ----------  -------  ----------  -------  -----------  -------
<S>                          <C>         <C>      <C>         <C>      <C>          <C>
Outstanding at the
Beginning of the year . . .  1,344,833   $0.9400    213,033   $6.3125   1,457,833   $6.3125
Granted . . . . . . . . . .         --        --  1,287,000   $0.5436          --   $6.3125
Exercised . . . . . . . . .         --        --         --        --      (1,667)  $6.3125
Forfeited/Surrendered . . .    (73,500)  $2.8474   (155,200)  $5.0391  (1,243,133)  $6.3125
                             ----------           ----------           -----------
Outstanding at the end of
 the year . . . . . . . . .  1,271,333   $0.8283  1,344,833   $0.9400     213,033   $6.3125
                             ==========           ==========           ===========
Options exercisable at year
 End. . . . . . . . . . . .    465,333   $1.3180     73,500   $6.3125     120,366   $6.3125
Available for future grant.    228,667        --    155,167        --   1,286,967        --
</TABLE>

<TABLE>
<CAPTION>

                                                        Options                 Options
                                                       Outstanding             Exercisable
                                            Weighted    weighted                Weighted
                                            Average     Average                 Average
                             Number        Remaining    Exercise    Number      Exercise
Range of Exercise Prices   Outstanding  Life (in years)  Price    Exercisable    Price
-------------------------  -----------  --------------- ------     -----------   ------
<S>                            <C>      <C>     <C>      <C>     <C>      <C>
0.50 - $0.8750             1,209,000         8.2         $0.5448     403,000     $0.5455
6.3125                      62,333           5.5         $6.3125     62,333      $6.3125
                           -----------                              -----------
                           1,271,333         8.0                     465,333
                         =============                            ===============
</TABLE>


The  Board  of Directors of Superior Group Management adopted the GGS Management
Holdings,  Inc.  Stock  Option Plan (the "Superior Group Management Stock Option
Plan"),  effective  April  30,  1996. The Superior Group Management Stock Option
Plan authorizes the granting of nonqualified and incentive stock options to such
officers  and other key employees as may be designated by the Board of Directors
of  Superior  Group  Management.  Options  granted  under  the  Superior  Group
Management  Stock Option Plan have a term of ten years and vest at a rate of 20%
per  year  for the five years after the date of the grant. The exercise price of
any  options  granted  under  the Superior Group Management Stock Option Plan is
subject  to  the  following  formula:  50%  of  each  grant of options having an
exercise price determined by the Board of Directors of Superior Group Management
at  its discretion, with the remaining 50% of each grant of options subject to a
compound  annual increase in the exercise price of 10%, with a limitation on the
exercise  price  escalation  as  such  options  vest.


Information  regarding  the  Superior  Group  Management  Stock  Option  Plan is
summarized  below:

<TABLE>
<CAPTION>

                                        2001             2000           1999
                                        Weighted         Weighted       Weighted
                                        Average          Average        Average
                                        Exercise         Exercise       Exercise

                               Shares   Price   Shares   Price   Shares   Price
                               -------  ------  -------  ------  -------  ------
<S>                            <C>      <C>     <C>      <C>     <C>      <C>
Outstanding at the beginning
 of the year. . . . . . . . .  83,432   $54.42  92,232   $51.75  94,732   $51.75
Granted . . . . . . . . . . .      --       --      --       --      --       --
Forfeited . . . . . . . . . .    (100)  $57.65  (8,800)  $51.48  (2,500)  $51.75
                               -------          -------          -------
Outstanding at the end of the
 year . . . . . . . . . . . .  83,332   $57.65  83,432   $54.42  92,232   $51.75
                               =======          =======          =======
Options exercisable at year
 end. . . . . . . . . . . . .  83,332       --  66,726       --  42,448       --
Available for future grant. .  27,779       --  27,679       --  18,879       --
</TABLE>



<TABLE>
<CAPTION>


                                                          Options               Options
                                                         Outstanding          Exercisable
                                           Weighted       Weighted              Weighted
                                           Average        Average               Average
                             Number        Remaining      Exercise   Number     Exercise
Range of Exercise Prices   Outstanding  Life (in years)    Price    Exercisable    Price
-------------------------  -----------  ---------------    -----    -----------    -----
<S>                        <C>          <C>              <C>        <C>          <C>
44.17. . . . . . . . . .       41,667            4.1    $   44.17     41,667    $  44.17
71.14. . . . . . . . . .       41,665            4.1    $   71.14     41,665    $  71.14
</TABLE>

The Company applies U.S. Accounting Principles Board Opinion No. 25, "Accounting
for  Stock Issued to Employees" and related interpretation in accounting for its
stock  option  plans.  Accordingly, no compensation cost has been recognized for
such  plans.  Had  compensation cost been determined, based on fair value at the
grant  dates  for  options  granted  under the Company stock option plan as well
under  both the SIG Stock Option Plan and the GGS Stock Option Plan during 2001,
2000  and  1999 consistent with the method of U.S. SFAS No. 123, "Accounting for
Stock-Based  Compensation",  the  Company's pro-forma net earnings and pro-forma
earnings  per  share  for the years ended December 31, 2001, 2000 and 1999 would
have  been  as  follows:



<TABLE>
<CAPTION>

                                2001       2001        2000       2000       1999       1999
                                 As         Pro-        As         Pro-        As        Pro-
                               Reported    Forma     Reported     Forma     Reported    Forma
                              ----------  ---------  ----------  ---------  ----------  ---------
<S>                           <C>         <C>        <C>         <C>        <C>         <C>
Earnings (loss) from
continuing operations. . . .  $ (31,937)  $(32,643)  $ (63,224)  $(63,676)  $ (47,000)  $(50,596)
Basic and fully diluted EPS
from continuing operations .  $   (5.61)  $  (5.73)  $  (10.86)  $ (10.94)  $   (8.00)  $  (8.61)
Net earnings (loss). . . . .  $ (34,093)  $(34,799)  $ (80,265)  $(80,717)  $ (62,373)  $(65,969)
Basic and fully diluted EPS.  $   (5.99)  $  (6.11)  $  (13.79)  $ (13.86)  $  (10.61)  $ (11.23)
</TABLE>

The  fair  value  of  each  option  grant  used  for  purposes of estimating the
pro-forma  amounts  summarized  above  is  estimated on the grant date using the
Black-Scholes  option-pricing  model  with  the weighted average assumptions for
2001  and  2000  shown  on  the  following  table:


<TABLE>
<CAPTION>

                                          SIG       Goran        SIG          Goran
                                          2001      2001         2000         2000
                                         Grants     Grants       Grants       Grants
                                       ------  -----------  -----------  -----------
<S>                                       <C>           <C>        <C>            <C>
Risk-free interest rates                  ---        2.34%        5.00%       5.00%
Dividend yields                           ---         ---          ---          ---
Volatility factors                        ---         156%         106%        106%
Weighted average expected life            ---   2.6 years    4.0 years    5.0 years
Weighted average fair value per share     ---  $     0.68   $     0.40   $     1.31
<FN>
The  Goran  stock  options  are granted and denominated in Canadian dollars. The
pro-forma  stock  based  compensation  for  these  options are translated at the
average  rate  for  the  year.  The  weighted  average  fair  value per share is
translated  at  the  year  end  rate.
</TABLE>


<TABLE>
<CAPTION>

19.     QUARTERLY  FINANCIAL  INFORMATION  (UNAUDITED):

Quarterly  financial  information  is  as  follows  (in  thousands):

                                                  First     Second     Third     Fourth      Total
                                                 --------  --------  ---------  ---------  ---------
<S>                                              <C>       <C>       <C>        <C>        <C>
                      2001
Gross written premiums. . . . . . . . . . . . .  $48,338   $49,950   $ 27,348   $ 67,550   $193,186
Net premiums written. . . . . . . . . . . . . .   16,945    27,702     14,684     27,531     86,862
Net premiums earned . . . . . . . . . . . . . .   18,844    26,411     22,943     39,999    108,197
Total revenues. . . . . . . . . . . . . . . . .   22,912    31,444     29,671     44,166    128,193
Net operating earnings (loss) from continuing
 operations (1) . . . . . . . . . . . . . . . .   (5,803)   (1,338)    (6,677)    (5,943)   (20,761)
Net loss from continuing operations . . . . . .   (9,547)   (3,940)    (9,041)    (9,409)   (31,937)
Basic operating earnings (loss) per share from
 continuing operations (1). . . . . . . . . . .    (1.00)     (.28)     (1.29)     (1.08)     (3.65)
Net loss from continuing operations per share
 - basic and diluted. . . . . . . . . . . . . .    (1.65)     (.68)     (1.57)     (1.71)     (5.61)

                       2000
Gross written premiums. . . . . . . . . . . . .  $59,859   $30,032   $ 45,852   $ 46,356   $182,099
Net premiums written. . . . . . . . . . . . . .   31,859    20,163     32,180     19,260    103,462
Net premiums earned . . . . . . . . . . . . . .   44,467    38,483     34,176     28,406    145,532
Total revenues. . . . . . . . . . . . . . . . .   51,903    43,153     37,524     33,392    165,972
Net operating earnings (loss) from continuing
 operations (1) . . . . . . . . . . . . . . . .   (3,544)   (3,320)    (7,573)     2,020    (12,417)
Net loss from continuing operations . . . . . .   (7,422)   (8,473)   (13,523)   (33,806)   (63,224)
Basic operating earnings (loss) per share from
 continuing operations (1). . . . . . . . . . .    (0.60)    (0.56)     (1.31)      0.34      (2.13)
Net loss from continuing operations per share
 - basic and diluted. . . . . . . . . . . . . .    (1.26)    (1.45)     (2.35)     (5.80)    (10.86)
<FN>

(1)     Operating  earnings (loss) and per share amounts exclude amortization, interest,
        taxes, deferred income, realized capital gains and losses, minority interest and
        any  extraordinary  items.
(2)     In the fourth quarter of 2000, the Company recorded an impairment charge related
        to  goodwill  of  $33.5  million.
</TABLE>


20.  RECONCILIATION  OF CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
     PRINCIPLES  ("GAAP")  AND  ADDITIONAL  INFORMATION

The  consolidated  financial statements are prepared in accordance with Canadian
GAAP.  Material  differences between Canadian and U.S. GAAP are described below.
There were no material difference in net earnings or earnings per share in 2001,
2000  and  1999.


(a)     Receivables  from  sale  of  capital  stock

        The SEC Staff Accounting Bulletins require that accounts or notes
        receivable  arising  from  transactions  involving  capital  stock  be
        presented  as  deductions from stockholders' equity and not as assets.
        Accordingly,  in  order  to comply with U.S. GAAP stockholders' equity
        would  be  reduced  by  $1,258,000  at  December 31, 2001 and 2000, to
        reflect  the  loans  due from certain stockholders which relate to the
        purchase  of  common  shares  of  the  Company.


(b)     Unrealized  gain  (loss)  on  investments

        U.S. GAAP requires that unrealized gains and losses on investment
        portfolios  be  included  as  a component in determining stockholders'
        equity.  In  addition, SFAS No. 115 permits prospective recognition of
        unrealized  gains  (losses)  on  investment  portfolio  for  year-ends
        commencing  after December 15, 1993. As a result, stockholders' equity
        would  be  decreased  by $2,246,000 and $3,602,000 for the years ended
        December  31,  2001  and  2000,  respectively.

(c)     Discontinued  operations

        U.S.  GAAP  requires the netting of all assets and liabilities of
        discontinued  operations and the presentation of those net assets as a
        single  line  item  in the consolidated balance sheets for all periods
        presented.  There  is  no  impact  on  stockholders'  equity.

(d)     Changes  in  stockholder's  equity

        A  reconciliation of stockholders' equity (deficit) from Canadian
        GAAP  to  U.S.  GAAP  is  as  follows  (in  thousands):

<TABLE>
<CAPTION>


                                                           2001       2000
                                                         ---------  ---------
<S>                                                      <C>        <C>
Stockholders' equity in accordance with Canadian GAAP .  $(89,146)  $(72,668)
Add (deduct) effect of difference in account for:
    Receivables from sale of capital stock (see note a)    (1,258)    (1,258)
    Unrealized gain (loss) on investments (see note b).    (2,246)    (3,602)
                                                         ---------  ---------
Stockholders' equity in accordance with U.S. GAAP . . .  $(92,650)  $(77,528)
                                                         =========  =========
</TABLE>

(e)     Comprehensive  Income

        U.S.  GAAP  requires  the  presentation  of  a  statement  of
        comprehensive  income.  Canadian  GAAP  does  not  require  a  similar
        disclosure.  The  Company's  comprehensive  income  is  as follows (in
        thousands):

<TABLE>
<CAPTION>


                                                  2001       2000
                                                ---------  ---------
<S>                                             <C>        <C>
Net Income (Loss) per Statement of Operations.  $(34,093)  $(80,265)
Purchase of Preferred Securities . . . . . . .    20,973     18,717
Change in cumulative translation adjustment. .      (472)      (304)
Unrealized gain (loss) on investments. . . . .    (2,246)    (3,602)
                                                ---------  ---------
Comprehensive Income (Loss). . . . . . . . . .  $(15,838)  $(65,454)
                                                =========  ---------
</TABLE>


21.     SUBSEQUENT  EVENTS

In  March  2002,  Granite  Re purchased Preferred Securities bearing a principal
amount  of  $26.5  million  at  a  cost  of  $2.39 million. After the March 2002
purchases,  the  Company  holds  Preferred  Securities bearing a total principal
amount  of  $66.96  million.

22.     MANAGEMENT'S  PLANS

The  financial  statements  have  been  prepared  on a going concern basis which
assumes  the  realization  of assets and settlement of liabilities in the normal
course  of  operations.  The  Company's  subsidiary, SIG, which accounts for the
majority  of  the  assets,  liabilities  and  results  of  operations  of  the
consolidated  entity  has experienced significant losses from operations and net
capital deficiency which raise substantial doubt as to SIG's ability to continue
as  a going concern. The financial statements do not give effect to adjustments,
if  any,  that  would  be  necessary should SIG be unable to continue as a going
concern  and  be  required  to  realize its assets and liquidate its liabilities
other  than  in  the  normal  course  of  operations.

The Company reported net losses of $34.1 million and $80.3 million for the years
2001  and 2000, respectively and is a party to a number of legal proceedings and
claims.  While  the  stockholders'  equity  at December 31, 2001 is a deficit of
approximately  $89.1  million,  SIG  has  offsetting  thirty-year  mandatorily
redeemable  trust  preferred  stock outstanding of $135 million that are not due
for  redemption  until  2027.  SIG's insurance subsidiaries, excluding IGF, have
statutory  surplus  of  approximately  $21.9  million.  Management has initiated
substantial  changes  in  operational  procedures  in an effort to return SIG to
profitable  levels  and  to  improve  its  financial  condition.  SIG has and is
continuing to raise its rates in a market environment where increasing rates and
withdrawal from the market by other companies show positive trends for improving
profitability  of  nonstandard  automobile  insurance  underwriters.

Beginning  in  the fourth quarter of 2001 and continuing in January and February
2002,  SIG sustained adverse loss experience on a substantial portion of its new
business  written in certain markets. In late February and early March 2002, SIG
commenced  further  analysis of loss ratios by individual agency and a review of
claim  settlement  procedures.  Based on this and other analysis, SIG has, as of
the  filing  of  this  document,  taken  the  following  actions  to improve the
financial  position  and  operating  results  of  SIG:

-       Eliminated  reinstatements  in  all  markets  (i.e.,  upon policy
        cancellation, the insured must obtain a new policy at prevailing rates
        and  underwriting  guidelines),
-       Terminated  or  placed  on new business moratorium several hundred
        agents  whose  loss  ratios  were abnormally high when compared to the
        average  for  the  remaining  agents  (these  agents  accounted  for
        approximately  16%  of  SIG's  total  gross  written premium in 2001),
-       Increased underwriting requirements in certain markets including:
        higher  down  payments, new policy fees, and shorter policy terms, and
-       Hired  a  consultant  with  significant auto claims experience to
        review  processes  and  suggest  modifications to the claims function.

The Company expects the above actions to result in a decline of approximately 10
to  15%  in  SIG's  gross written premiums from 2001 levels with a corresponding
decrease  in  management fees payable to Superior Group, offset by reductions in
operating  expenses  due  to  process  changes  and  efficiencies.


Management  believes  that  despite  the  recent losses and the deterioration in
shareholders  equity  and  statutory  surplus,  it has developed a business plan
that,  if  successfully  implemented,  can  improve  SIG's operating results and
financial  condition  in  2002.

23.     DISCONTINUED  OPERATIONS

As previously announced, IGF sold its crop insurance operations to Acceptance on
June  6,  2001.  This  business  was  predominantly  written  through  IGF.  The
divestiture  of the crop insurance segment transferred ownership of certain crop
insurance  accounts,  effective  with  the  2001  crop  cycle.

Management  does  not  expect  any remaining crop business to be material to the
consolidated  financial  statements  and  accordingly has discontinued reporting
crop  insurance as a business segment. The results of the crop insurance segment
have  been  reflected  as  "Discontinued  Operations"  in  the  accompanying
consolidated  financial  statements.


<PAGE>
Summarized  results  of  operations  and  financial  position  for  discontinued
operations  were  as  follows:


<TABLE>
<CAPTION>

STATEMENTS  OF  OPERATIONS
(in  thousands)


                                                                               Year Ended December 31,
<S>                                                        <C>                        <C>        <C>
                                                                               2001       2000       1999
                                                           -------------------------  ---------  ---------

Gross premiums written. . . . . . . . . . . . . . . . . .  $                256,722   $241,748   $237,286
                                                           =========================  =========  =========
Net premiums written. . . . . . . . . . . . . . . . . . .  $                   (308)  $ 26,466   $ 12,737
                                                           =========================  =========  =========

       Net premiums earned. . . . . . . . . . . . . . . .  $                   (308)  $ 26,531   $ 14,240
       Net investment and fee income. . . . . . . . . . .                     1,657      1,229        749
       Net realized capital gain. . . . . . . . . . . . .                       799         10         21
                                                           -------------------------  ---------  ---------
Total revenues. . . . . . . . . . . . . . . . . . . . . .                     2,148     27,770     15,010
                                                           -------------------------  ---------  ---------

       Loss and loss adjustment expenses. . . . . . . . .                     3,559     40,690     34,225
       Policy acquisition and general and administrative
       expenses . . . . . . . . . . . . . . . . . . . . . .                     654      2,059        215
       Interest and amortization expense. . . . . . . . .                        91      1,162      1,113
                                                           -------------------------  ---------  ---------
Total expenses. . . . . . . . . . . . . . . . . . . . . .                     4,304     43,911     35,553
                                                           -------------------------  ---------  ---------

Loss before income taxes. . . . . . . . . . . . . . . . .                    (2,156)   (16,141)   (20,543)

Income taxes:
        Current income tax (benefit). . . . . . . . . . .                         -          -     (5,852)
        Deferred income tax expense . . . . . . . . . . .                         -          -        682
                                                           -------------------------  ---------  ---------
Total income tax expense (benefit). . . . . . . . . . . .                         -          -     (5,170)
                                                           -------------------------  ---------  ---------

Loss from operations of discontinued segment. . . . . . .                         -    (16,141)   (15,373)
Loss on disposal of discontinued segment. . . . . . . . .                    (2,156)      (900)         -
                                                           -------------------------  ---------  ---------
Net loss from discontinued operations . . . . . . . . . .  $                 (2,156)  $(17,041)  $(15,373)
                                                           =========================  =========  =========
</TABLE>
<PAGE>

-------------------------------------------------------------------------------
MANAGEMENT  RESPONSIBILITY
-------------------------------------------------------------------------------

Management recognizes its responsibility for conducting the Company's affairs in
the  best  interests  of  all  its  shareholders.  The  consolidated  financial
statements  and related information in this Annual Report are the responsibility
of  management.  The  consolidated  financial  statements  have been prepared in
accordance  with generally accepted accounting principles, which involve the use
of judgement and estimates in applying the accounting principles selected. Other
financial  information  in  this  Annual  Report  is consistent with that in the
consolidated  financial  statements.

The  Company  maintains  a  system  of  internal  controls, which is designed to
provide  reasonable  assurance  that  accounting  records  are  reliable  and to
safeguard  the Company's assets. The independent accounting firm of BDO Seidman,
LLP  has audited and reported on the Company's consolidated financial statements
for  2001  and  2000.  Their  opinion  is based upon audits conducted by them in
accordance  with  generally accepted auditing standards to obtain assurance that
the  consolidated  financial  statements  are  free  of  material misstatements.

The  Audit  Committee  of  the  Board of Directors, the members of which include
outside  directors,  meets with the independent external auditors and management
representatives  to  review  the  internal accounting controls, the consolidated
financial  statements  and  other  financial  reporting  matters. In addition to
having  unrestricted  access  to  the  books  and  records  of  the Company, the
independent  external  auditors  also  have  unrestricted  access  to  the Audit
Committee. The Audit Committee reports its findings and makes recommendations to
the  Board  of  Directors.



/s/  Alan  G.  Symons
Chief  Executive  Officer
March  29,  2002
<PAGE>
BOARD  OF  DIRECTORS  AND  STOCKHOLDERS  OF  GORAN  CAPITAL  INC.


Goran  Capital  inc.
Toronto,  Canada

We  have  audited  the accompanying consolidated balance sheets of Goran Capital
Inc.  and subsidiaries (the "Company") as of December 31, 2001 and 2000, and the
related  consolidated  statements  of  earnings (loss), changes in shareholders'
equity  (deficit)  and  cash  flows  for  the  years then ended. These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and Canada. Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial  statements  are free of material misstatement. An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  consolidated  financial statements. An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as  well as evaluating the overall consolidated financial statement
presentation.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the consolidated financial position of Goran
Capital  Inc. and subsidiaries at December 31, 2001 and 2000, and the results of
their  operations  and  their  cash flows for the years then ended in conformity
with  accounting  principles  generally  accepted  in  Canada.

The  consolidated  financial statements as at December 31, 1999 and for the year
then  ended,  prior  to the reclassifications made to reflect the Company's crop
insurance segment as discontinued operations, were audited by other auditors who
expressed  an  opinion  without  reservation on those statements in their report
dated March 14, 2000, except for Note 23, which is as of March 23, 2000. We have
audited the reclassifications to the 1999 consolidated financial statements and,
in  our  opinion,  such  reclassifications,  in  all  material  respects,  are
appropriate  and  have  been  properly  applied.





/s/  BDO  SEIDMAN,  LLP
Grand  Rapids,  Michigan
March  29,  2002




COMMENTS  BY  AUDITOR  FOR  U.S.  READERS ON CANADA - U.S. REPORTING DIFFERENCES

In  the  United States, reporting standards for auditors require the addition of
an  explanatory  paragraph  (following the opinion paragraph) when the financial
statements  are affected by conditions and events that cast substantial doubt on
the company's ability to continue as a going concern, such as those described in
Note  22  to  the  financial  statements.   Our report to the shareholders dated
March  29,  2002  is  expressed  in accordance with Canadian reporting standards
which  do  not permit a reference to such events and conditions in the auditors'
report  when  these  are  adequately  disclosed  in  the  financial  statements.





/s/  BDO  SEIDMAN,  LLP
Grand  Rapids,  Michigan
March  29,  2002

<PAGE>
STOCKHOLDER  INFORMATION

Registrar  and  Transfer  Agent            IndependentPublic  Accountants
CIBC  Mellon  Trust  Company               BDO  Seidman  LLP
Toronto,  Ontario                          Grand  Rapids,  Michigan

Annual  Meeting  of  Stockholders
2  Eva  Road,  Suite  200
Toronto,  Ontario  Canada  M9C  2A8
May  31,  2002
10:00  A.M.

ANNUAL  REPORT  ON  FORM  10-K
A  copy  of  the  Annual Report on Form 10-K for Goran Capital Inc. for the year
ended  December 31, 2001, filed with the Securities and Exchange Commission, may
be  obtained,  without  charge, upon request to the individual and address noted
under  Shareholder  Inquiries.

MARKET  AND  DIVIDEND  INFORMATION

As  of  July  1, 2000 Goran Capital Inc.'s common stock began trading on the OTC
Bulletin  Board  under  the  symbol  GNCNF.OB.  Prior to this date Goran Capital
Inc.'s  stock  was  traded  on  the  NASDAQ Stock Market's National Market.  The
shares  also  trade  on  the  Toronto  Stock  Exchange.

As  of  December  31,  2001  there were approximately 100 common stockholders of
record,  including  many brokers holding shares for the individual clients.  The
number  of  individual  stockholders  on  the  same  date  is estimated at 1000.

The number of commons shares outstanding on December 31, 2001 totaled 5,393,698.
Information relating to the common shares is available through the Toronto Stock
Exchange  and  the  U.S. OTC Bulletin Board.  The following table sets forth the
high and low closing sale prices for the common shares for each quarter of 2001,
2000  and  1999.


<TABLE>
<CAPTION>

                                                   TORONTO STOCK EXCHANGE
                                               2001         2000          1999
<S>            <C>   <C>  <C>   <C>  <C>   <C>    <C>    <C>    <C>    <C>     <C>
Quarter Ended                              High   Low    High   Low    High    Low
-------------                              ----   ---    ----   ---    ----  -----
March 31                                   $2.70  $0.90  $4.15  $1.50  $12.37  $7.73
June 30                                    $1.75  $0.80  $3.50  $1.75  $ 9.75  $7.06
September 30                               $1.15  $0.53  $2.84  $1.95  $12.78  $7.40
December 31                                $1.25  $0.60  $2.25  $ .50  $ 8.74  $1.95
</TABLE>


<TABLE>
<CAPTION>

                                         U.S. OTC BULLETIN BOARD TRADING PRICES
                                               2001         2000          1999
<S>            <C>   <C>  <C>   <C>  <C>   <C>    <C>    <C>    <C>    <C>     <C>
Quarter Ended                              High   Low    High    Low   High    Low
-------------                              ----   ---    ----    ---   ----   -----
March 31                                   $1.88  $0.75  $2.88  $1.05  $10.73  $8.38
June 30                                    $1.14  $0.58  $2.44  $1.16  $10.19  $7.31
September 30                               $0.80  $0.35  $1.95  $1.25  $13.25  $7.75
December 31                                $0.81  $0.41  $1.38  $0.34  $ 8.38  $2.00
</TABLE>


                                       52
U.S.  OTC  Bulletin  Board quotations reflect inter-dealer prices without retail
markdown or commission and may not represent actual transactions.  Goran Capital
Inc.  did not declare or pay cash dividends on its common stock during the years
ended December 31, 2001, 2000 and 1999.  Goran Capital Inc. does not plan to pay
cash  dividends  on  its  common  stock  in  the  foreseeable  future.

SHAREHOLDER  INQUIRIES

Inquiries  should  be  directed  to:
ALAN  G.  SYMONS
Chief  Executive  Officer
Goran  Capital  Inc.
Tel:  (317)  259-6302
E-mail:  asymons@sigins.com

BOARD  OF  DIRECTORS

G.  GORDON  SYMONS
Chairman  of  the  Board
Goran  Capital  Inc.
Symons  International  Group,  Inc.

ALAN  G.  SYMONS
President,  Chief  Executive  Officer
Goran  Capital  Inc.

DOUGLAS  H.  SYMONS
Vice  President,  Chief  Operating  Officer
Goran  Capital  Inc.
President,  Chief  Executive  Officer  and  Secretary
Symons  International  Group,  Inc.

J.  ROSS  SCHOFIELD
President,  Schofield  Insurance  Brokers

DAVID  B.  SHAPIRA
President,  Medbers  Limited

JOHN  K.  MCKEATING
Former  Partner,  Vision  2120,  Inc.

RON  FOXCROFT
President,  Fluke  Transportation  Group


EXECUTIVE  OFFICERS

ALAN  G.  SYMONS
President,  Chief  Executive  Officer
Goran  Capital  Inc.

DOUGLAS  H.  SYMONS
Vice  President,  Chief  Operating  Officer  and  Secretary
Goran  Capital  Inc.
President,  Chief  Executive  Officer  and  Secretary
Symons  International  Group,  Inc.

JOHN  G.  PENDL
Vice  President,  Chief  Financial  Officer  and  Treasurer
Goran  Capital  Inc.

<PAGE>

COMPANY,  SIG  AND  SUBSIDIARY  OFFICES


<PAGE>
HEAD  OFFICE  -  CANADA
GORAN  CAPITAL  INC.
2  Eva  Road,  Suite  200
Toronto,  Ontario  Canada  M9C  2A8
Tel:  416-622-0660
Fax:  416-622-8809

US  OFFICE
GORAN  CAPITAL  INC.
4720  Kingsway  Drive
Indianapolis,  Indiana  46205
Tel:  317-259-6400
Fax:  317-259-6395
Website:  www.gorancapital.com
          --------------------

<PAGE>

SIG  CORPORATE  OFFICE
Symons  International  Group,  Inc.
4720  Kingsway  Drive
Indianapolis,  Indiana  46205
Tel:  317-259-6300
Fax:  317-259-6395
Website:  www.sigins.com
          --------------

OTHER  SUBSIDIARY  OFFICES


<PAGE>
Superior  Insurance  Group,  Inc.
4720  Kingsway  Drive
Indianapolis,  Indiana  46205
Tel:  317-259-6300
Fax:  317-259-6395
Website:  www.sigauto.com
          ---------------

Pafco  General  Insurance  Company
4720  Kingsway  Drive
Indianapolis,  Indiana  46205
Tel:  317-259-6300
Fax:  317-259-6395

Superior  Insurance  Company
280  Interstate  North  Circle,  N.W.,  Suite  500
Atlanta,  Georgia  30339
Tel:  770-952-4885
Fax:  770-988-8583

IGF  Insurance  Company
4720  Kingsway  Drive
Indianapolis,  Indiana  46205
Tel:  317-259-6300
Fax:  317-259-6395

Superior  Insurance  Company  -  Claims  Office
1745  West  Orangewood  Road,  Suite  210
Orange,  California  92826
Tel:  714-978-6811
Fax:  714-978-0353

Superior  Insurance  Company  -  Claims  Office
6303  Little  River  Turnpike,  Suite  220
Alexandria,  Virginia  22312
Tel:  703-916-8001
Fax:  703-916-1783


Superior  Insurance  Company  -  Claims  Office
700N  Central  Avenue,  Suite  570
Glendale,  California  91203
Tel:  818-956-3077
Fax:  818-956-3069


Superior  Insurance  Company  -  Claims  Office
5503  W  Waters  Avenue,  Suite  500
Tampa,  Florida  33634
Tel:  813-887-4878
Fax:  813-243-0268

Superior  Insurance  Company  -  Claims  Office
141  Union  Boulevard,  Suite  130
Lakewood,  Colorado  80228
Tel:  303-984-7000
Fax:  303-985-1253

Superior  Insurance  Company-  Claims  Office
4500  PGA  Boulevard,  Suite  304A
Palm  Beach  Gardens,  Florida  33418
Tel:  561-622-7831
Fax:  561-622-9741

Superior  Insurance  Company-  Claims  Office
7775  Baymeadows  Way,  Suite  107
Jacksonville,  Florida  32256
Tel:  Pending
Fax:  Pending

Superior  Insurance  Company-  Claims  Office
5700  Cleveland  Street,  Suite  336
Virginia  Beach,  Virginia  23462
Tel:  757-499-0500
Fax:  757-499-0560