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                              AUTOMATIC COINSURANCE
                              REINSURANCE AGREEMENT


                      THE OHIO STATE LIFE INSURANCE COMPANY
                                 Columbus, Ohio


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                   AUTOMATIC COINSURANCE REINSURANCE AGREEMENT

                                    Schedule

1.   Reinsured:            The Ohio State Life Insurance Company

2.   Address:              Columbus, Ohio

3.   Effective date:       The date the stock of the Reinsured is purchased
                           by the Retrocessionaire.

4.   Policies:

     (a)      All individual insurance policies written by the Reinsured.

     (b)      All group insurance policies written by the Reinsured.

     (c)      All annuity plans (whether group or individual) written by the
              Reinsured.

     (d)      All riders issued with or added later to the above described
              contracts.

     (e)      All of the above  described  business  written by other  insurers
              and assumed  by the  Reinsured  (whether  through  reinsurance
              or direct assumption).

5.   Reinsurance:       100%

6.   Initial consideration (all values as of effective date of this agreement)
     computed as follows:

     (a)      The Reinsured's policy reserves from Annual Statement Exhibits 8,
              9, and 10; plus

     (b)      the claim liabilities pertaining to the policies; plus

     (c)      the advance premiums applicable to the policies; minus

     (d)      the net due and deferred premiums applicable to the policies; plus

     (e)      the miscellaneous reserves and liabilities applicable to the
              policies; and less

     (f)      the policy loans; and less


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     (g)      the miscellaneous assets applicable to the policies.

7.   Ceding commission:  $133,000,000, minus the ceding commission pertaining
     to the Investors Guaranty Treaty.

8.   Expense commission: The amount indicated by Exhibit A, attached to and
     made a part of this agreement.

The agreement of which this  Schedule is a part is hereby  executed in duplicate
by the parties hereto.

THE OHIO STATE LIFE                                 EMPLOYERS REASSURANCE
INSURANCE COMPANY                                        CORPORATION

By:                                    By: /s/ James D. Maughn
   -------------------------------        -------------------------------------

Title:                                 Title: /s/ Ex. Vice Pres. and Actuary
      ----------------------------           ----------------------------------


Date:                                  Date: /s/ January 21, 1997
     -----------------------------          -----------------------------------

By:                                    By: /s/ Robert D. Parmley
   -------------------------------        -------------------------------------

Title:                                 Title: /s/ Ass't Gen Counsel
      ----------------------------           ----------------------------------

Date:                                  Date: /s/ January 21, 1997
     -----------------------------          -----------------------------------



                                      3


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                  AUTOMATIC COINSURANCE REINSURANCE AGREEMENT

                        Employers Reassurance Corporation
                                       of
                              Overland Park, Kansas
                      (hereinafter called the Corporation)

agrees  with  the  Reinsured  named  in the  Schedule  made a  part  hereof,  in
consideration of the mutual covenants hereinafter contained, as follows:


                                    ARTICLE I

APPLICATION OF AGREEMENT.  This  agreement  applies to loss which is retained by
the Reinsured  pertaining to the insurance policies and riders described in Item
4 of the Schedule becoming  effective before, on and after the effective date of
this agreement  (hereinafter called policies or policy) and which is paid by the
Reinsured on or after the effective date of this agreement.


                                   ARTICLE II

ENTIRE  AGREEMENT.  This agreement shall constitute the entire agreement between
the parties with respect to the business being reinsured hereunder. There are no
other  understandings  between  the  parties  other  than as  expressed  in this
agreement.  Any change or  modification to this agreement shall be null and void
unless made by amendment to this agreement and signed by both parties.


                                   ARTICLE III

REINSURANCE.  The Corporation will indemnify the Reinsured against the
percentage specified in Schedule Item 5 of loss to which this agreement applies.


                                   ARTICLE IV

RECAPTURE.  The Reinsured does not have any rights to recapture the policies.


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                                    ARTICLE V

PRODUCER COMMISSION.  The Corporation is obligated to the Reinsured for the
commissions paid by the Reinsured to its producers of the policies.


                                   ARTICLE VI

DEFINITIONS.  The word  "policies"  means the insurance  forms  described in the
Schedule and includes  conditional  receipts pertaining thereto and conversions,
reinstatements and exchanges thereof.

The word  "loss"  shall  mean  only such  amounts  as are  actually  paid by the
Reinsured for benefits afforded under the policies,  in settlement of claims for
benefits under the policies,  or in satisfaction of judgments for benefits under
the policies;  provided  that, in the event of the  insolvency of the Reinsured,
"loss" shall mean the amount of policy benefits which the Reinsured has incurred
or is  liable  for,  and  payment  by  the  Corporation  shall  be  made  to the
liquidator, receiver or other statutory successor of the Reinsured in accordance
with the provisions of the Insolvency Clause attached to and made a part of this
agreement.  The word "loss" shall  include life  insurance  proceeds  payable by
reason of death  which  remain  unpaid  because of the nature of the  settlement
option  selected.  The word "loss"  includes  cash values paid by the  Reinsured
because of policy surrenders. The word "loss" shall not include:

(1)      claim expenses;

(2)      salaries paid to employees of the Reinsured;

(3)      any  amount  paid  by  the  Reinsured   for   punitive,   exemplary  or
         compensatory damages arising out of the conduct of the Reinsured in the
         investigation,  trial or  settlement  of any claim or failure to pay or
         delay in payment of any benefits under any policy;  provided that, this
         subparagraph  (3) shall not apply if the Corporation has, in advance of
         any such conduct by the  Reinsured,  counseled  with the  Reinsured and
         concurred in the Reinsured's course of conduct;

(4)      any statutory penalty imposed upon the Reinsured on account of any
         unfair trade practice or any unfair claim practice;

(5)      amounts collected under other reinsurance.

The term "claim  expenses"  shall mean statutory  interest  payable on insurance
proceeds,  court costs,  interest upon judgments,  and allocated  investigation,
adjustment

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and legal expenses,  but the term "claim  expenses"  shall not include  salaries
paid to employees of the Reinsured.

Claims shall be deemed to be "incurred" on the date when:

(a)      the death occurs as respects life coverage;

(b)      the disability commences, as respects waiver of premium coverage;

(c)      the accident takes place, as respects accidental death coverage.

The word  "exchange"  means that an insurance  contract  reinsured  hereunder is
traded for another plan of equal or smaller face amount, without requirement for
full evidence of insurability.

The term "other reinsurance" means those contracts entered into by the Reinsured
with  insurance  or  reinsurance  companies  other  than the  Corporation  which
reinsure the policies.

"Miscellaneous reserves and liabilities" means the sum of the following:

(a)      due or accrued agent commissions;

(b)      premiums due or accrued on other reinsurance;

(d)      premium suspense.

"Miscellaneous assets" means the amounts recoverable under other reinsurance.

The term "Investors Guaranty Treaty" means the Automatic Coinsurance Reinsurance
Agreement,  which has the same  effective  date as this  agreement,  between the
Corporation and Investors Guaranty Life Insurance Company.

The term "Escrow  Account" means the funds  pertaining to this agreement and the
Investors  Guaranty  Treaty  received and held by COMMERCE BANK,  N.A. of Kansas
City,  Missouri  ("Commerce  Bank")  pursuant  to  its  Escrow  Agreement  (Ohio
State/Investors    Guaranty    Business)   with   the    Corporation   and   the
Retrocessionaire).

The word  "Retrocessionaire"  means Great Southern Life Insurance Company, which
is the Corporation's reinsurer for the policies.



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                                   ARTICLE VII

INITIAL  CONSIDERATION.  On the effective date of this agreement,  the Reinsured
shall deposit to Commerce Bank assets equal to the the  Reinsured's  estimate of
the initial consideration indicated in Item 6 of the Schedule,  minus the ceding
commission indicated in Item 7 of the Schedule.  Thirty days after the effective
date of this agreement, the Reinsured shall pay to the Corporation the amount by
which  the  estimate  is  less  than  actual,  with  interest  thereon,  or  the
Corporation  shall pay to the Reinsured the amount by which the estimate is more
than actual, with interest thereon.


                                  ARTICLE VIII

REINSURANCE  PREMIUM.  The Reinsured  shall pay to the Corporation a reinsurance
premium equal to the insurance  premium  collected by the Reinsured on and after
the effective  date of this  agreement  pertaining  to the  policies,  minus the
reinsurance  premium paid to other  carriers,  and minus the expense  commission
indicated in Item 8 of the Schedule.


                                   ARTICLE IX

POLICY LOANS. The Corporation shall be obligated to the Reinsured for the policy
loan increases,  minus the amount of uncapitalized policy loan interest (the net
result  of which is  hereinafter  referred  to as  policy  loan  increase).  The
Reinsured  shall be obligated to the  Corporation for the policy loan decreases,
plus the amount of  uncapitalized  policy loan interest (the net result of which
is hereinafter referred to as policy loan decrease).


                                    ARTICLE X

INVESTMENTS.  The Escrow Account assets shall be invested in accordance with the
investment  guidelines  contained  in Exhibit B,  attached to and made a part of
this agreement.


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                                   ARTICLE XI

INTEREST.  Interest  rates  credited by the  Reinsured on the policies  shall be
determined in accordance with the procedures contained in Exhibit C, attached to
and made a part of this agreement.


                                   ARTICLE XII

REPORTING,  ACCOUNTING  AND  SETTLEMENTS.  Within 25 days  after the end of each
calendar  quarter,  the  Reinsured  or its  administrator  shall  furnish to the
Corporation a report (in a form  satisfactory  to the  Corporation)  showing the
following information:

(a)      Amounts owed Corporation:

         (1)      Reinsurance premium applicable to insurance premium collected
                  during quarter;

         (2)      Policy loan decrease during quarter;

         (3)      Increase during quarter in miscellaneous reserves and
                  liabilities;

         (4)      Decrease during quarter in miscellaneous assets;

(b)      Amounts owed Reinsured:

         (1)      loss paid under the policies during the quarter;

         (2)      expense commission;

         (3)      policy loan increase during quarter;

         (4)      producer commission for the quarter;

         (5)      Decrease during quarter in miscellaneous reserves and
                  liabilities;

         (6)      Increase during quarter in miscellaneous assets;

(c)      Balance due Corporation or Reinsured.

Any balance due the Corporation  shall be deposited to the Escrow Account within
30 days after the end of the  calendar  quarter  involved.  Any  balance due the
Reinsured  shall be paid by the  Corporation  to an  account  designated  by the
Reinsured within 30 days after the end of the calendar quarter involved.

The  Reinsured  and the  Corporation  each agree to pay interest to the other on
amounts  not  paid  within  the  time  periods  required  within  this  article,
calculated using the one month LIBOR rate.


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The  Reinsured's  report for the third  calendar  quarter of each  calendar year
shall include:

(1)      a summary listing showing all policies in force;

(2)      the detailed information required with respect to the policies by the
         Exhibit of Life Insurance in the Corporation's Annual Statement;

(3)      the aggregate reserve information required with respect to the policies
         by the Corporation's actuarial opinion and by the other exhibits of the
         Corporation's Annual Statement.

                                  ARTICLE XIII

CLAIMS.  The Reinsured  agrees that it will cause to be  investigated  and paid,
settled or defended all claims  arising under the  policies.  Except as respects
damages to which this agreement may apply by virtue of  subparagraph  (3) of the
definition  of  loss,   the  claim   decisions  of  the  Reinsured  (or  of  its
administrator) shall be binding upon the Corporation.

The Corporation shall have the right, at its own expense, to participate jointly
with the Reinsured (or its  administrator) in the  investigation,  adjustment or
defense of any claim.

The  Corporation  has no  obligation  to indemnify  the  Reinsured for any claim
expenses paid by the Reinsured with respect to the policies.



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                                   ARTICLE XIV

ADMINISTRATION OF INSURANCE.  The Corporation shall have no authority or
responsibility to administer the insurance provided by the policies.


                                   ARTICLE XV

INSPECTION OF RECORDS.  The Corporation may inspect the records of the
Reinsured pertaining to the policies at any time during the normal business
hours of the Reinsured.


                                   ARTICLE XVI

OFFSET.  The Reinsured or the Corporation may offset any balance due from one
party to the other under this agreement.


                                  ARTICLE XVII

INSOLVENCY CLAUSE.  The attached Insolvency Clause is hereby made a part of
this agreement.


                                  ARTICLE XVIII

ASSIGNMENTS AND CHANGES OF INTEREST.  No assignment or change of the Reinsured's
interest  hereunder,  whether  voluntary or involuntary and whether by merger or
reinsurance of its entire business with another  company or otherwise,  shall be
binding upon the Corporation, provided that, this article does not apply to:

(a)      The  Corporation's  assignment of its interests and  liabilities as the
         reinsurer  to the  Retrocessionaire,  but only  with  respect  to those
         policies  on which  the  Retrocessionaire  is not  named as the  direct
         insurer;

(b)      The  Reinsured's  assignment  of its  rights  and  duties as the ceding
         company  to the  Retrocessionaire,  but  only  with  respect  to  those
         policies on which the Retrocessionaire is named as the direct insurer.


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                                   ARTICLE XIX

ENFORCEABILITY.  This agreement has been duly executed by each of the parties
hereto and constitutes a binding and enforceable agreement of each such party.


                                   ARTICLE XX

TERMINATION.  This  agreement  shall remain in force until  terminated by mutual
consent  or by either  party  giving  to the  other  party not less than 90 days
advance notice,  by registered  mail or express  delivery  service,  stating the
termination date.

This agreement  does not apply with respect to policies  issued by the Reinsured
to become effective on or after the termination date of this agreement.


The reinsurance  afforded by this agreement  applicable to each policy issued by
the Reinsured to become  effective prior to or during the term of this agreement
shall continue to apply thereto until the policy naturally expires.

IN WITNESS  WHEREOF,  the  parties  hereto have  signed  this  agreement  on the
Schedule Page.

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                                INSOLVENCY CLAUSE

         The ceding  insurer and the  reinsurer  agree that, in the event of the
insolvency of the ceding insurer, as to all reinsurance made, ceded,  renewed or
otherwise  becoming  effective after the effective date of this  agreement,  the
reinsurance  shall be  payable  by the  reinsurer  on the basis of the amount of
liability  of the ceding  insurer  under the  contract or  contracts  reinsured,
without diminution because of the insolvency of the ceding insurer; furthermore,
that such amount shall be paid directly to the ceding insurer or its liquidator,
receiver or other statutory successor.

         It is  understood  and agreed,  however,  that the  obligations  of the
ceding  company  as set  forth in the  reinsurance  contract,  including,  among
others,  the duty to  investigate,  settle and defend all claims  arising  under
policies with respect to which reinsurance is afforded by this agreement,  shall
remain  unimpaired  and  unaffected by the  insolvency of the ceding insurer and
shall be assumed by the  liquidator,  receiver  or  statutory  successor  of the
ceding  insurer in the  liquidation  or  receivership  proceeding  and that such
liquidator,  receiver or statutory  successor  shall give written  notice to the
reinsurer  of the pendency of a claim  against the ceding  insurer on the policy
reinsured  within a reasonable  time after such claim is filed in the insolvency
proceeding  and that  during  the  pendency  of such  claim  the  reinsurer  may
investigate  such claim and  interpose,  at its own expense,  in the  proceeding
where such claim is to be adjudicated, any defense or defenses which it may deem
available  to  the  ceding  insurer,  its  liquidator,   receiver  or  statutory
successor.  The expense  thus  incurred by the  reinsurer  shall be  chargeable,
subject to court approval,  against the insolvent  ceding insurer as part of the
expense of  liquidation  to the extent of a  proportionate  share of the benefit
which may  accrue to the  ceding  insurer  solely as the  result of the  defense
undertaken or asserted by the reinsurer.

         Where  two or more  reinsurers  are  involved  in the same  claim and a
majority in  interest  elect to  interpose a defense to such claim,  the expense
shall be apportioned in accordance with the terms of this reinsurance  agreement
as though such expense had been incurred by the ceding insurer.

         Nothing  hereinabove  set  forth  in this  insolvency  clause  shall in
anywise change the relationship or status of the parties hereto, to wit, that of
ceding  insurer and  reinsurer,  nor enlarge the  obligations of either party to
each other,  except as  specifically  hereinabove  provided,  to wit, to pay the
statutory  successor  on the basis of the  amount  of  liability  of the  ceding
insurer under the contract or contracts  reinsured,  rather than on the basis of
the  actual  amount of loss  (dividends)  paid by the  liquidator,  receiver  or
statutory successor to allowed claimants,  nor shall anything in this insolvency
clause 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
reinsurance contract.


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                                  EXHIBIT A
                             EXPENSE COMMISSION


OHIO STATE
                                                                   Percent of
                                     Per Policy                      Premium

Deferred Annuities               $8.75 per quarter                      --
ManuLife Annuities              $17.50 per quarter                      --
Universal Life                  $12.50 per quarter                     2.5%
Traditional Life
       - Premium Paying          $8.75 per quarter                     2.5%
       - Paid Up                 $5.00 per quarter                      --
Deposit Funds                           --                              --


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                                                                EXHIBIT B


INVESTMENT OBJECTIVES

The primary objectives are:

1)      Preservation of principal (capital).

2)      Maximize the potential value of the portfolio with a focus on
        maintaining and increasing future investment income streams.


INVESTMENT CONSTRAINTS

1)      Conservative and stable investment philosophy with primary emphasis on
        balancing credit and interest rate risk.

2.)     Focus on well-structured securities (non-callable corporates, CMO's
        with stable average lives, current or discount coupon pass-throughs) to
        reduce reinvestment risk and improve price performance.  Investment in
        high risk or volatile derivative securities (e.g. inverse floaters) are
        not considered part of the overall investment strategy.

3)      Investments are made with the intent of being held long term.  The
        portfolio will not be actively/aggressively managed based on anticipated
        interest rate and/or spread changes.  Any restructuring of the portfolio
        will be performed in conjunction with the overall asset/liability
        management process.

4)      The portfolio will be structured with the goal of matching the assets
        with the expected liability cash flows.  The structure of the assets
        will be regularly monitored considering interest rate and expected
        prepayment rate changes.  Asset/liability studies are completed at least
        annually, or more frequently if warranted.  The results of these studies
        play an integral role in the durational aspects of securities purchased.

5)      Maintain a high quality/liquid investment portfolio to satisfy both
        existing and prospective cash flow needs.

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INVESTMENT GUIDELINES AND LIMITATIONS

The following guidelines will be utilized in developing and managing the
portfolio:

1)      MATURITY STRUCTURE:

        The targeted average life for the       The maturity distribution of the
        portfolio is a range of 6-13 years.     portfolio will be a function of
                                                expected liability cash flows,
                                                and the term structure of
                                                interest rates.

2)      SECTOR ALLOCATION:

                                                              Target
                                            Expected         Percentage
            Sector                            Range          Allocation
            ------                          --------         ----------

         U.S. Governments:                    0-25%              --%
         Corporate Bonds:                    45-85               55
         Asset-Backed Securities (ABS):       5-20               20
         Mortgage-Backed Securities (MBS):   15-45               25
                                                                 --
         Total                                                  100%


3)      RATINGS GUIDELINES:

        a) Corporate Bonds:

                                                              Expected
                                    Expected                 Percentage
            Rating Category          Range                  of Corporates
            --------------          --------                -------------

             AAA & AA                 5-25%                     10%
                 A                   40-75                      65
                BBB                  15-25                      25
                                                                --
                                                               100%
                                                               ===

For any corporate bonds rated both Baa-3/BBB by Moody's and Standard & Poor's
respectively, Employer's Re will be notified prior to their purchase.
Subsequent to the transaction, written approval will be obtained from
Employer's Re for all Baa-3/BBB- bonds acquired.

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        b)      Mortgage-Backed Securities:

                MBS holdings will generally involve government agency or
                government sponsored agency (FNMA and FHLMC) collateral, or AAA
                rated collateral.  No more than 20% of the total portfolio will
                be backed by non-agency collateral.

        c)      Below Investment Grade Securities (BIG):

                BIG bonds are not considered part of the overall investment
                strategy. However, any bond purchased as an investment grade
                security which is subsequently downgraded to a BIG rating will
                be reevaluated at that time.  If the risk of default is
                considered low, the bond may be retained.  Any BIG bonds
                retained will be regularly monitored and reevaluated.  The total
                amount of BIG bonds to be retained cannot exceed 5% of total
                investments.

        d)      Asset-Backed Securities:

                ABS investments should be rated AA or AAA by one of the major
                rating agencies.  No more than 20% of ABS holdings can be rated
                AA.

                                        Expected          Target
                                         Range          Allocation
                                         -----          ----------
                AAA                     80-100%           100%
                AA                       0-20              --

4)      HOLDING LIMITATIONS:

        a)      Industry Concentration:

                Corporate bond holdings are limited to no more than 20% in any
                one industry.

        b)      Company Concentration:

                The maximum amount to be invested in any one company or
                organization is as follows:

                                       16
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                                                Maximum Amount
                                                   Invested
                            Rating Category      (In Million)
                            ---------------      ------------
                                AAA                 $15
                                AA                   15
                                A                    12
                                BBB                   8

        c)      Individual MBS concentration.

                The maximum amount to be invested in any one agency collateral
                security is $25 million.  For a non-agency collateral security,
                the maximum amount is $10 million (rated AAA).

        d)      Individual ABS Concentration:

                The maximum amount to be invested in any one ABS security is as
                follows:

                                                Maximum Amount
                                                   Invested
                            Rating Category      (In Millions)
                            ---------------      -------------

                                AAA                   $10
                                AA                      5

5.      Any security which is outside the scope of these guidelines can
        be invested in, if mutually agreed upon by both organizations.

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                                                                      Exhibit C

                         Interest Rate Crediting Process

1.       Objective.  The objective of this process is to assure that credited
         rates are established so as to meet required spread targets.

2.       Expected  Gross  Interest  Rate. The expected gross interest rate for a
         block of  business is  determined  by  blending  current  yields on the
         investment  portfolio  of  assets  underlying  the  block  of  business
         together with expected new money for minimal new and reinvestment  cash
         flow.  The  blending  will be based on cash flow for the  period  under
         review and will take into consideration  funds due for reinvestment and
         interest income.

         Current yields should include the effect of realized  statutory capital
         gains and losses. New money assumptions shall consider these investment
         guidelines in respect of quality, duration and type of assets.

         An example is shown in the following Table 1:

          Table 1
          Expected Gross Interest Rate

                                    Volume            Rate
          Investment Portfolio      800               8.5%
          Reinvestment Portfolio    100               8.0%
          New Money                 100               8.0%

          Average                   1,000             8.4%

3.       Expected Net Interest Rate.  The expected net interest rate for a block
         of business is determined by subtracting from the gross rate charges
         for investment expenses and risks.

         Charges for investment  expenses cover the cost of investment  expenses
         (including  transaction costs) per the Services Agreement  described in
         Numbered Paragraph 3 of this agreement.

         Charges for risk should take into  consideration the default and option
         risks (as agreed upon) relating to the portfolio assets  underlying the
         block of business.

         An example is shown in the following Table 2:


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                  Table 2
                  Expected Net Interest Rate

                  Expected Gross Rate             8.4%
                  Less: Investment Expenses       0.25%
                  And less: Investment Risks      0.2%

                  Expected Net Rate               7.95%

4.       Target Credited Rate.  To determine the target credited rate, the
         required spread must be subtracted from the expected net investment
         rate.  The required spread varies by plan and by duration within plan.

         The target credited rate may be modified for marketing reasons provided
         that  adjustments  are  offsetting in the aggregate.  Antiselection  in
         favor of artificially high rates will be considered in this process.

         An example is shown in the following Table 3:

                  Table 3
                  Target Credited Rate
                                             Life                      Annuity
                  Expected Net Rate          7.95%                     7.95%
                  Less: Required Spread      1.5%                      1.75%

                  Calculated Credited Rate   6.45%                      6.20%
                  Marketing Adjustments      0.4%                      -0.10%
                  (Assuming 80% annuities)

                  Target Credited Rate       6.85%                     6.10%

5.       Working Range.  If currently credited interest rates are outside of the
         defined working range of plus or minus 25 basis points of target rates,
         then no action is required (but action may be taken) until the
         cumulative shortfall exceeds $750,000.

6.       Actions.  If currently credited interest rates are outside the defined
         working range of target rates, then action is required.  Three courses
         of action are possible:

         a.       Adjust credited rates;

         b.       Adjust reinsurance and retrocession allowances;


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         c.       Do nothing, which is not acceptable after cumulative shortfall
                  exceeds $750,000.

Considerations in this decision are:

         1.       The objective stated above;

         2.       Competition and marketing issues;

         3.       Previous deficiencies and sufficiencies in credited rates
                  (relative to target rates);

         4.       Expected trends in future credited rates;

         5.       The magnitude of the contemplated adjustments.




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