September 10, 1997


                                     BY-LAWS

                                       OF

                                  NYMAGIC, INC.

                                    ARTICLE I

                                      SEAL

     The board of directors  shall provide a suitable seal for the  corporation,
which shall remain in the custody of the  secretary.  It shall be affixed to all
certificates of the  corporation's  stock and to other  instruments  requiring a
seal.  If deemed  advisable by the board of directors,  a duplicate  seal may be
kept and used by any other officer of the corporation.

                                   ARTICLE II
                                      STOCK

Section l.  Certificates

     Certificates  evidencing  the  ownership  of the shares of the  corporation
shall be issued to those entitled to them by transfer and otherwise.  Each stock
certificate shall bear a distinguishing number, the signature of the chairman of
the board or of the  president or a vice  president  and of the  secretary or an
assistant secretary or of the treasurer or an assistant  treasurer,  the seal of
the  corporation,  and such recitals as may be required by law. The certificates
for the stock shall be issued in numerical order, and a full record of the issue
of each certificate  shall be made in the books usually kept for that purpose or
required by law. Certificates for stock shall be of such tenor and design as the
board of directors  may adopt,  and the tenor and design  thereof may be changed
from time to time by the board.

Section 2.  Transfers

     The  shares  of  stock  may be  transferred  on  the  proper  books  of the
corporation  by the registered  holders  thereof or by their  attorneys  legally
constituted  or their legal  representatives,  by surrender of the  certificates
therefor  for  cancellation  and a written  assignment  of the shares  evidenced
thereby.  The board of directors  may from time to time  appoint  such  transfer
agents and  registrars  of stock as it may deem  advisable  and may define their
powers and duties.

Section 3.  Lost Certificates

     The board of directors may order a new certificate or certificates of stock
to be issued in place of any  certificate or  certificates  alleged to have been
lost or  destroyed,  but in every  such case the owner of the lost or  destroyed
certificate or  certificates  shall first cause to be given to the corporation a
bond, with surety or sureties satisfactory to the corporation in such sum as the
board may in its discretion deem  sufficient,  as indemnity  against any loss or
liability  that the  corporation  may  incur by  reason of the issue of such new
certificates;  but the board of directors may in its discretion  refuse to issue
such new certificates  save upon the order of some court having  jurisdiction in
such matter.

Section 4.  Closing of Transfer Books

     The stock transfer books of the  corporation  may be closed by order of the
board of directors for a period not  exceeding  thirty days prior to any meeting
of the  stockholders,  and for a period  not  exceeding  ten  days  prior to the
payment of any dividend. The times during which the books may be so closed shall
from time to time be fixed by the board of directors.


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Section 5.  Dividends, Surplus, etc.

     The board of directors may consistently with the law declare dividends from
the divisible surplus of the corporation,  whenever,  and in such amounts as, in
its opinion,  the  condition of the affairs of the  corporation  shall render it
advisable.  The board of  directors  in its  discretion  may set aside from such
divisible surplus such sum or sums as it, in its absolute discretion,  may think
proper, as a reserve fund to meet contingencies, or for equalizing dividends, or
for the purpose of  maintaining  or  increasing  the property or business of the
corporation,  or for any  other  purpose  it may  think  conducive  to the  best
interest of the corporation. All such divisible surplus, until actually declared
in dividends, or used and applied as aforesaid,  shall be deemed to have been so
set aside by the board of directors for one or more of said purposes.

                                   ARTICLE III
                             STOCKHOLDERS' MEETINGS


Section l.  Annual Meeting

     The Annual Meeting of the stockholders of the corporation  shall be held at
the offices of the corporation or at some other convenient place in the State of
New York on the second  Tuesday in May of each year for the  purpose of electing
directors  and for the  transaction  of such  other  business  as may be brought
before the meeting.  Should the day designated fall on a legal holiday,  the the
meeting shall be held on the next business day immediately following.

Section 2.  Special Meetings

     Special  meetings of the  stockholders  shall be called by the secretary or
assistant  secretary  upon  written  request of the chairman of the board or the
president or of three  directors.  No business  other than that specified in the
call therefor shall be considered at any special meeting.

Section 3.  Notice

     Notice of the annual meeting shall be delivered  personally,  or mailed not
less than twenty (20) nor more than fifty (50) days before the meeting,  to each
person who appears on the books of the corporation as a stockholder.  If mailed,
it shall be  directed  to a  stockholder  at his  address  as it appears on such
books.  No failure to give notice by mail or  irregularity  in such notice shall
affect the validity of the proceedings taken at such meeting.

     Notice of each special meeting stating the purpose thereof, shall be mailed
not less than  twenty  (20) days nor more than fifty (50) days prior to the date
thereof to each  stockholder  of record at his last known post office address as
the same appears upon the records of the corporation.

Section 4.  Quorum

     A majority in amount of the stock issued and outstanding represented by the
holders of record  thereof in person or by proxy shall be requisite to consitute
a quorum at any meeting of  stockholders,  except as otherwise  provided by law;
but less than such  majority may adjourn the meeting  from time to time,  and at
any such adjourned  meeting any business may be transacted which might have been
transacted if the meeting had been held as originally called.

Section 5.  Proxies

     Any stockholder  entitled to a vote at a meeting of the stockholders may be
represented  and vote thereat by proxy,  appointed by an  instrument  in writing
subscribed by such stockholder or by his duly authorized attorney, and submitted
to the secretary or assistant secretary at or before such meeting.

Section 6.  Election of Directors

     The  election of the  directors  shall be conducted  by two  inspectors  of
election  appointed  by the  chairman  of the  board or  president.  The vote in
elections of directors,  and, upon demand of a stockholder  present in person or
by proxy, th vote on any question, shall be a stock vote and by ballot.

Section 7.  Record Date


<PAGE>


     For the purpose of determining the stockholders entitled to notice of or to
vote at any meeting of stockholders or any  adjournment  thereof,  or to express
consent to or dissent from any proposal without a meeting, or for the purpose of
determining  stockholders  entitled  to receive  payment of any  dividend or the
allotment of any rights,  or for the purpose of any other  action,  the board of
directors  may  fix,  in  advance,  a date  as the  record  date  for  any  such
determination of  shareholders.  Such date shall not be more than sixty (60) nor
less than ten (l0) days  before  the date of such  meeting,  nor more than fifty
(50) days prior to any other action.

     When a determination  of stockholders of record entitled to notice of or to
vote at any meeting of shareholders has been made as provided in this Section 7,
such determination shall apply to any adjournment  thereof,  unless the board of
directors fixes a new record date for the adjourned meetings.


                                   ARTICLE IV
                                    DIRECTORS

Section l.  Number of Directors

     The number of directors  shall be not less than thirteen (l3) nor more than
nineteen (l9).  The exact number thereof may be established by the  stockholders
at each annual meeting,  or at a special meeting called for such purpose,  or by
the directors at any regular  meeting  thereof,  or any special  meeting thereof
called  for such  purpose.  The term of  office  of  directors  shall be, in all
respects, as set forth in the declaration and charter of the corporation.

Section 2.  Election of Officers

     At the first  meeting  of the board of  directors  in each year (at which a
quorum shall be present) held next after the annual meeting of the stockholders,
the board of directors  shall elect officers of the  corporation,  designate the
members of the executive  committee,  audit committee and finance  committee (if
any such committee  shall be constituted as hereinafter  provided),  and appoint
such  subordinate  officers and  employees as it shall  determine.  The board of
directors  may elect  officers  to fill any  vacancies  at any  regular  meeting
thereof, or at a special meeting thereof called for such purpose.

Section 3.  Regular Meetings

     Regular  meetings of the board of directors shall be held at such intervals
and on such dates as the board may designate.

Section 4.  Special Meetings

     Special meetings of the board of directors shall be called by the secretary
or assistant  secretary  pursuant to the request of the chairman of the board or
president.  Special  meetings of the board of directors  shall also be called by
the  secretary or assistant  secretary in the event that any five members of the
board of directors request a special meeting.

Section 5.  Notice of Meetings

     The secretary or assistant  secretary  shall give notice of each meeting of
the board of directors, whether regular or special, to each member of the board,
by mail or telegraph to his last known post office address. Such notice shall be
given by mailing the same at least twenty days before the meeting or by telegram
or cable sent at least ten days before the  meeting.  No failure to give notice,
or  irregularity  in such notice,  shall affect the validity of the  proceedings
taken at any regular meeting of the board of directors.

Section 6.  Quorum

     A quorum  of any  meeting  of the board of  directors  shall  consist  of a
majority of the total number of members of the board.  A majority of such quorum
shall decide any questions  that may come before the meeting,  unless  otherwise
expressly provided by law or by-law duly adopted. Less than a quorum may adjourn
from time to time.

Section 7.  Place of Meeting

     The board of directors may hold its meetings at such place or places within
or without the State of New York as the board may from time to time determine.


<PAGE>


     Members of the board of directors may participate in a meeting of the board
or  any  committee   thereof  by  means  of  conference   telephone  or  similar
communications  equipment  by means of which all persons  participating  in such
meeting can hear each other,  and  participating  in a meeting  pursuant to this
paragraph shall constitute presence in person at such meeting.

Section 8.  Compensation

     The  compensation  of directors  shall be regulated  and  determined by the
directors; provided that nothing herein contained shall be construed to preclude
any director from serving the  corporation  in any other  capacity and receiving
compensation or commissions therefore.


Section 9.  Resignation and Removal of Directors

     Any  director may resign his office at any time and the  acceptance  of his
resignation  shall not be required to make the same valid.  Any director elected
or  appointed  by the  stockholders  may be removed at any time,  either with or
without cause, by a vote of the stockholders holding a majority of the stock, at
any special meeting called for such purpose.

                                    ARTICLE V
                               EXECUTIVE COMMITTEE
                                   Section l.

     The board of  directors  may, by a majority of the whole  board,  designate
three or more of their  number to  constitute  an executive  committee,  to hold
office for one year and until their  respective  successors shall be designated,
which committee shall, between sessions of the board, have all the powers of the
board  of  directors  in the  management  of the  business  and  affairs  of the
corporation,  except as prohibited by law, and shall have power to authorize the
seal of the  corporation  to be affixed to all papers  which may require it. The
taking of any action by the executive  committee  shall be  conclusive  evidence
that the board of directors  was not at the time of such action in session.  The
executive  committee  shall  appoint its  chairman.  The  secretary or assistant
secretary  or a member of the  executive  committee  shall  keep  minutes of its
proceedings, and all such proceedings shall be from time to time reported to the
board of directors.  A majority of the  executive  committee  shall  consitute a
quorum at any meeting. The executive committee may take action without a meeting
on the  written  approval  of such  action by all  members of the  committee.  A
majority of the directors may fill  vacancies in the  executive  committee.  The
executive committee may, from time to time, subject to the approval of the board
of directors,  prescribe  rules and  regulations  for the calling and conduct of
meetings of the committee,  and other matters relating to its procedures and the
exercise of its powers.

     Meetings of the  executive  committee  shall be called by the  secretary or
assistant  secretary of the corporation,  from time to time, at the direction of
the chairman of the board,  the  president  or any two members of the  executive
committee;  the notice of any such  meeting  shall in each  instance be given to
each  member of the  committee  at his last  known  business  address,  at least
twenty-four  hours before the  meeting,  either  orally or in writing  delivered
personally or by mail, telegraph or telephone.

Section 2.  Audit Committee

     The board of  directors  may,  by a  majority  vote at the  first  board of
directors meeting next following the Annual Shareholders  Meeting,  designate at
least three  directors to constitute  an audit  committee to hold office for one
year and until their respective successors shall be designated.

     The  duties  of  the  committee  shall  include  review  of  the  financial
statements of the Company and the adequacy of the systems of internal accounting
controls and procedures;  to meet with the Company's internal auditors,  if any,
and with its  independent  public  accountants  to  review  their  report on the
examination of the Company's  accounts,  their comments on the internal controls
and auditing  procedures of the Company and the action taken by management  with
regard to such  comments;  to meet with outside or internal  financial and legal
personnel in connection with the committee reviews; and to recommend annually to
the board of directors  the  appointment  of the  Company's  independent  public
accountants.  The meetings with auditing,  financial and legal  personnel may be
with or without management  representatives  being present.  The committee shall
also perform such other duties as may be assigned to it from time to time by the
board of directors.


<PAGE>




Section 3.  Finance Committee

     The board of  directors  may,  by a  majority  vote at the  first  board of
directors meeting next following the Annual Shareholders  Meeting,  designate at
least three directors to constitute a finance committee,  to hold office for one
year and until their respective successors shall be designated.

     The  duties of the  committee  shall  include  meeting  quarterly,  with or
without  outside  investment  counsel  in  attendance;   to  review  and  ratify
investment  transactions  for the  quarter;  to  review  the  schedule  of funds
available for  investment  and to determine  appropriate  investment  thereof in
accordance with the Investment  Program  guidelines;  to investigate  investment
opportunities;   to  report  their  findings  and  recommendations  and  propose
resolutions  to the  board of  directors  for  consideration;  and to  recommend
annually to the board of directors the  appointment of the Company's  investment
counsel.  The committee  shall also perform such other duties as may be assigned
to it from time to time by the board of directors.

Section 4.    Other Committees.

     The Board of  Directors  may,  by  resolution  adopted by a majority of the
entire Board of Directors,  designate at least three directors to constitute one
ore more other committees to hold office for one year and until their respective
successors shall be designated.

     The  duties,  power and  authority  and any  committee  designated  by this
Section 4 shall be set forth in the  resolution or  resolutions  of the Board of
Directors  designating  such committee and, to the extent  provided  therein and
permissible  under the Business  Corporation  Law and Insurance Law of New York,
shall  have and may  exercise  all the  powers  and  authority  of the  Board of
Directors in the management of the business and affairs of the Corporation.

                                   ARTICLE VI
                                    OFFICERS

Section l.  Officers

     The  officers  of  this  corporation  shall  be a  chairman  of the  board,
president, one or more vice presidents, one or more secretaries,  and such other
officers,  if any, including,  a vice chairman of the board, a treasurer and one
or more assistant  secretaries and assistant  treasurers as may be designated by
the board of  directors.  Any two or more offices may be held by the same person
except that no individual may hold the office of secretary concurrently with the
office of chairman of the board or president.  The president shall be a director
of the  corporation.  The vice  president or vice  presidents,  the secretary or
assistant secretaries, the treasurer or assistant treasurers and other officers,
if any, may, but need not be directors.

Section 2.  Chairman of the Board

     The chairman of the board shall preside at all meetings of the stockholders
unless the  stockholders  shall, at least l0 days in advance of the stockholders
meeting,  designate a chairman in writing addressed to the chairman of the board
of the  corporation;  and shall preside as chairman of the board at all meetings
of the directors including meetings of the executive committee of the directors.
The  chairman of the board shall have such powers and perform such duties as may
be assigned to him from time to time by the board. He shall always be designated
a member of the executive committee.

Section 3.  Vice Chairman of the Board

     The vice  chairman of the board  shall have such  powers and  perform  such
duties as may be assigned to him from time to time by the board.

Section 4.  President

     The president  shall perform the duties of the chairman of the board in his
absence or during his inability to act. Any action taken by the president in the
performance  of the  duties of the  chairman  of the board  shall be  conclusive
evidence of the absence or  inability to act of the chairman of the board at the
time such action was taken. The president shall exercise, subject to the control
of the  board of  directors,  the  duties  of  chief  executive  officer  of the
corporation  and shall  perform such other duties as may be assigned to him from
time to time by the  board.  He shall  always  be  designated  a  member  of the
executive committee.


<PAGE>


     Upon any vacancy in the office of the chairman of the board caused by death
or incapacity or for any reason  deemed  sufficient by the board,  the president
shall succeed to the office of chairman of the board,  unless otherwise  ordered
by the board.

Section 5.  Vice President

     The vice  president  or vice  presidents  shall  perform  the duties of the
president in his absence or during his inability to act. Any action taken by the
vice  president  in the  performance  of the  duties of the  president  shall be
conclusive  evidence of the absence or inability to act of the  president at the
time such action was taken.  The vice presidents  shall also have such other and
further  powers  and  shall  perform  such  other and  further  duties as may be
assigned to them respectively by the board of directors.

     Upon  any  vacancy  in the  office  of the  president  caused  by  death or
incapacity or for any reason deemed sufficient by the board, the vice presidents
in the order of their seniority shall succeed to the office of president, unless
otherwise ordered by the board.

Section 6.  Secretary

     The  secretary  shall  keep the  minutes  of all  meetings  of the board of
directors, and of the stockholders,  unless another person be appointed for that
purpose by the  stockholders,  and also,  unless another person be appointed for
that purpose by the executive committee, the minutes of the executive committee,
in books  provided  for that  purpose.  He shall  give or cause to be given  all
notices required by these by-laws or by resolution of the board of directors. He
shall have charge of the stock certificate books, stock transfer books and stock
ledgers,  all of which shall at all reasonable  hours be open to the examination
of any director;  he shall have custody of the seal of the  corporation;  and he
shall in  general  perform  all the  duties  usually  incident  to the office of
secretary,  subject to the control of the board of  directors.  The secretary or
any assistant  secretary  shall also certify all  resolutions and proceedings of
the stockholders,directors, and executive committee.

Section 7.  Treasurer

     The treasurer shall keep and maintain open to inspection by any director at
all  reasonable  times,  adequate  and correct  accounts of the  properties  and
business  transactions  of the  corporation,  which  shall  include  all matters
required by law and which shall be in form as required by law. He shall have the
care and custody of the funds and valuables of the  corporation and deposit same
in the name of and to the credit of the  corporation  with such  depositaries as
the board of directors  may  designate,  and he shall  disburse the funds of the
corporation as he may be ordered by the board,  taking proper  vouchers for such
disbursements.  The  treasurer  shall  render to the  chairman  of the board and
president and  secretary or to the board of directors  whenever they may require
it,  but in no  event  less  than  quarter  annually,  an  account  of  all  his
transactions  as treasurer,  and a financial  statement in form  satisfactory to
them, showing the condition of the corporation.  He shall have such other powers
and perform such other duties as may be prescribed by the board of directors.

Section 8.  Powers and Duties of Other Officers

     The other officers of the corporation shall perform such duties as shall be
assigned  to  them  from  time  to  time by the  board  of  directors  or by the
president.


                                   ARTICLE VII
                     SIGNATURE, CARE OF FUNDS AND SECURITIES


Section l.  Care of Funds and Securities

     It shall be the duty of the board of directors,  the executive committee or
the finance committee,  when the board is not in session,  to take charge of the
cash funds of the corporation,  and to invest and loan the same agreeably to the
provisions  of the law, and when  loaned,  to call in and reloan the same as the
interest of the corporation may require;  also to consent to the substitution of
new or  other  security  for  loans  in  place  of  those  already  held  by the
corporation when, in its judgment, the interests of the corporation require such
substitution.

     All sales and  transfers of  securities  shall be made by an officer of the
corporation  acting  under  authority  granted by a  resolution  of the board of
directors, the finance committee or the executive committee.


<PAGE>



     All moneys received by the corporation  shall be deposited to its credit in
such bank or banks as the  board of  directors,  the  finance  committee  or the
executive  committee  may direct,  subject to the order of any person or persons
thereunto  authorized  by the board of directors,  the finance  committee or the
executive committee.

Section 2.  Signatures

     All checks,  drafts, notes or other obligations of the corporation shall be
signed by any person or persons thereunto  authorized by the board of directors,
the finance committee or the executive committee.

Section 3.  Proxies

     The finance  committee,  the executive  committee or the board of directors
may authorize  from time to time the signature and issue of proxies to vote upon
shares of stock of other  corporations owned by and standing in the name of this
corporation.  All such proxies shall be signed in the name of the corporation by
the  chairman of the board,  president,  a vice  president  or the  secretary or
assistant secretary.

                                  ARTICLE VIII
                                   FISCAL YEAR

     The  fiscal  year of the  corporation  shall  commence  on the first day of
January and end on the  thirty-first  day of December in each year and all books
and accounts of the corporation shall be balanced as of that day.

                                   ARTICLE IX
                                   AMENDMENTS

     All by-laws of the  corporation  shall be subject to  alteration or repeal,
and new by-laws may be made, either by the affirmative vote of holders of record
of a majority of the outstanding  stock of the  corporation,  given at an annual
meeting or at any special meeting, provided notice of the proposed alteration or
repeal or of the  proposed new by-laws be included in the notice of such special
meeting,  or by the  affirmative  vote of a majority  of the board of  directors
given at a regular  meeting  or a  special  meeting  of the board of  directors,
provided  notice of the  proposed  alteration  or repeal or of the  proposed new
by-laws be  included  in the notice of such  special  meeting.  By-laws  made or
altered by the board of directors  shall be subject to  alteration  or repeal by
the stockholders.

                                    ARTICLE X
                                WAIVER OF NOTICE

     Whenever,  under  the  provisions  of  these  by-laws  or of any  law,  the
stockholders,  directors or committees  are authorized to hold any meeting after
notice, or after the lapse of any prescribed period of time, such meeting may be
held without  notice,  or without such lapse of time,  by the written  waiver of
such notice signed by every person entitled to notice.

                                   ARTICLE XI
                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The corporation will indemnify to the fullest extent then permissible under
the Business Corporation Law and Insurance Law of New York each person who shall
serve at any time as director or officer of the corporation.