CHARTWELL REINSURANCE COMPANY
                                UNDERWRITING YEAR
                            AGGREGATE EXCESS OF LOSS
                               REINSURANCE TREATY
                            EFFECTIVE JANUARY 1, 1998

ARTICLE           SUMMARY                                                  PAGE

   1                       Business Covered                                 2
   2                       Term and Territory                               3
   3                       Basis of Coverage                                3
   4                       Exclusions                                       3
   5                       Coverage and Aggregate Lim                       4
   6                       Definitions                                      4
   7                       Net Retained Lines                               7
   8                       Base Premium, Additional Premium and
                            Reinsurers' Expense                             7

   9                       Ceding Commission                                8
  10                       Profit Sharing, Funds Held Account and
                              Interest Credit                               8

  11                       Currency                                         9
  12                       Taxes                                            9
  13                       Accounts, Remittances and Loss Settlements      10
  14                       Loss Reserve Funding                            10
  15                       Excess of Policy Limits                         11
  16                       Extra Contractual Obligation                    11
  17                       Offset and Security                             12
  18                       Commutation                                     12
  19                       Errors and Omissions                            13
  20                       Access to Records                               13
  21                       No Assignment                                   14
  22                       Insolvency                                      14
  23                       Arbitration                                     15
  24                       Service of Suit                                 15
  25                       Intermediary                                    16


<PAGE>

                                UNDERWRITING YEAR
                            AGGREGATE EXCESS OF LOSS
                               REINSURANCE TREATY

                      (hereinafter referred to as "Treaty")

                                     between

                          CHARTWELL REINSURANCE COMPANY
                              Stamford, Connecticut
                                       and
                       DAKOTA SPECIALTY INSURANCE COMPANY
                              Stamford, Connecticut
                                       and
                      THE INSURANCE CORPORATION OF NEW YORK
                                Jericho, New York
                                       and
                             DRAYTON COMPANY LIMITED
                                Hamilton, Bermuda
                                       and
                        CHARTWELL RE HOLDINGS CORPORATION
                              Stamford, Connecticut

           (hereinafter referred to collectively as "Ceding Company")

                                       and

              THE REINSURERS SUBSCRIBING THEIR RESPECTIVE INTERESTS
                   AND LIABILITIES AGREEMENTS ATTACHED HERETO

                    (hereinafter referred to as "Reinsurers")



                           Article 1: Business Covered
                           ---------------------------

The Reinsurers agree to indemnif the Ceding Company with respect to the Ultimate
Net Losses  which may accrue to the Ceding  Company in respect of all  policies,
contracts,  binders of insurance and reinsurance (all hereinafter referred to as
"Contracts").  Business  Covered is defined to include all Contracts,  including
Contracts underwritten by the Ceding Company's Lloyds corporate capital vehicles
including but not limited to Oak Dedicated  Limited and Archer Dedicated Limited
as  respects  all classes of business  assumed  and  underwritten  by the Ceding
Company,  prior to the Term and in force  including  both  Contracts  with prior
written  premiums,  which are unearned at January 1, 1998, and Contracts written
prior to the Term which have written and earned  premiums to be recorded  during
the Term as of the January 1, 1998  effective  date and  Contracts  underwritten
during the Term, all subject to the terms and conditions of this Treaty.

                          Article 2: Term and Territory
                          -----------------------------

This Treaty Term shall  January 1, 1998 through  December  31,  1998,  both days
inclusive.  Coverage  will  extend  beyond  December  31,  1998  in  respect  of
underlying Contracts in force as of December 31, 1998 until natural expiration.

This  Treaty  applies to losses  occurring  worldwide  with  respect to Business
Covered.


                          Article 3: Basis of Coverage
                          ----------------------------

As respects Business Covered  pertaining to Contracts  underwritten prior to the
Term and in force,  Reinsurers  shall indemnify the Ceding Company in respect of
Loss Occurrences or claims made or losses discovered as per underlying  coverage
form of the Ceding  Company's  Contracts  during the period for which Reinsurers
received their respective share of underlying earned premiums.

As respects  Business Covered  pertaining to Contracts  underwritten  during the
Term,  Reinsurers shall indemnify the Ceding Company in respect of all Contracts
underwritten  during the Term regardless of when the Loss  Occurrences or claims
made or losses discovered occur. Coverage for Loss Occurrences or claims made or
losses discovered shall in all cases follow the underlying  coverage form of the
Ceding Company's Contracts.


                              Article 4: Exclusions
                              ---------------------

This Treaty shall not apply to and specifically excludes:

A.     Nuclear  Incident,  in accordance  with the following  clauses attached
       hereto: Liability;


          1. Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance-
             U.S.A. - NMA 1119;


          2. Nuclear  Incident  Exclusion Clause - Physical Damage and Liability
             (Boiler and Machinery Policies) - Reinsurance - U.S.A. - NMA 1166;

          3. Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance
             - Canada - NMA 1980;

          4. Nuclear Incident Exclusion Clause - Physical  Damage and  Liability
             (Boiler and Machinery Policies) Reinsurance - Canada - NMA 1251;

          5. Nuclear Incident Exclusion Clause - Liability - Reinsurance - U.S.A
             - NMA 1590;

          6. Nuclear Incident  Exclusion  Clause  -  Liability  -  Reinsurance -
             Canada - NMA 1979;

          7. Nuclear  Energy  Risks  Exclusion   Clause   (Reinsurance)   (1984)
             Worldwide Excluding U.S.A. and Canada - NMA 1975.

B.     War risks, in accordance  with the War  Risks  Exclusion  clause attached
       hereto;

C.     Insolvency funds, in accordance with the Insolvency Exclusion Clause
       attached hereto;

D.     Assessments of any kind, from any source, and whether voluntary or
       involuntary;

E.     Unallocated  Loss  Adjustment  Expenses  (unless  covered  by the  Ceding
       Company per the underlying treaties and facultative business);

F.     Business classified as assumed Finite or Non-traditional Reinsurance
       Agreements;

G.     State income and excise taxes, if any, reported hereunder;

H.     Financial  guaranty and  Insolvency.  This  exclusion  shall not apply to
       residual value insurance.


                     Article 5: Coverage and Aggregate Limit
                     ---------------------------------------

A.       Coverage  -  Should  the  Ceding  Company's  Ultimate  Net  Loss  Ratio
         hereunder  exceed the  Retention,  as defined in Article 6, Section H.,
         the  Reinsurers  shall be liable for 100% (one hundred  percent) of the
         amount by which the paid  portion of  Ultimate  Net  Losses  exceed the
         Retention, subject to a maximum limit of liability to the Reinsurers of
         100% (one  hundred  percent) of 28.55%  (twenty  eight point fifty five
         percent) of SNWPI.

B.       Aggregate Limit - The Reinsurers'  maximum liability shall in all cases
         be the lesser of 28.55%  (twenty  eight  point  fifty five  percent) of
         SNWPI or  $143,200,000  (one hundred forty three  million,  two hundred
         thousand dollars) in the aggregate for this Treaty.


                             Article 6: Definitions
                             ----------------------

A.       "Subject Net Written Premium Income (SNWPI)" shall be comprised of
         three components of Business Covered:

         1.       Earned  premium  during  the  Term  in  respect  of  Contracts
                  underwritten  prior to the Term on written premium  previously
                  accounted  for and unearned as reported by the Ceding  Company
                  as of January 1, 1998 as respects  Business Covered less ceded
                  earned premiums in respect of all other inuring  reinsurances;
                  plus

         2.       Written  premium as  recorded by the Ceding  Company  which is
                  earned  during the Term in respect of  Contracts  underwritten
                  prior to the Term as  respects  Business  Covered  less  ceded
                  written premium in respect of all other inuring  reinsurances;
                  plus

         3.       Written  premium in respect of Contracts  underwritten  during
                  the Term as  respects  Business  Covered  less  ceded  written
                  premiums in respect of all other inuring reinsurances.

         Retrospective  premium  adjustments  related  to  swing-rated  business
         written prior to 1997 and nonstandard  automobile  assumed  reinsurance
         business with The Insurance  Corporation  of New York shall be excluded
         from Business Covered SNWPI.

         Notwithstanding  the  above,  all  property  catastrophe  reinstatement
         premium, if any, in respect of both assumed and ceded business shall be
         excluded from SNWPI.

B.       "Subject Net Earned Premium  Income  (SNEPI)" for any inception to date
         period  applicable  to this  Treaty  shall mean the SNWPI of the Ceding
         Company's  Business  Covered,  net of  business  excluded by the Ceding
         Company,  during the inception to date period less the  respective  Net
         Premium Income Unearned as of the end of the calculation period.

C.       "Net Premium Income Unearned" shall be determined by the Ceding Company
         following  its  standard  practices  and  calculations  as respects the
         subject Business Covered.

D.        "Loss Occurrence" shall mean any one  disaster or casualty or accident
          or loss or series of  disasters or  casualties  or accidents or losses
          arising  out of or caused by one  event.  All  losses  having a common
          origin or traceable to the same act, omission,  mistake, occurrence or
          causative  incident  shall  be  considered  one  accident,   disaster,
          casualty or occurrence. For the purposes of establishing the date when
          a  loss  has  occurred,  the  following  will  apply:  on  reinsurance
          contracts  that attach on a losses  occurring  during basis,  the Loss
          Occurrence   date(s)   applicable  shall  apply;  and  on  reinsurance
          contracts that attach on a claims made basis,  the claims made date(s)
          applicable shall apply; and on reinsurance  contracts that attach on a
          losses sustained and/or losses discovered basis, the date(s) a loss is
          sustained  or  discovered   shall  apply.  The  Ceding  Company  shall
          establish the proper  allocation  of  reinsurance  contracts  that are
          written on a risks attaching basis to the appropriate  Loss Occurrence
          periods.  The Reinsurers  shall accept such Loss  Occurrence  Accident
          Year allocations as determined by the Ceding Company.


E.       "Ultimate Net Losses" shall mean the sum of losses (including  loss in
          Excess of Policy Limits in accordance with Article 15:Excess of Policy
          Limits and Extra  Contractual  Obligations in accordance  with Article
          16: Extra  Contractual  Obligations)  and  Allocated  Loss  Adjustment
          Expenses   arising  out  of  Business  Covered   hereunder.   Property
          catastrophe  losses shall be limited to  $20,000,000  (twenty  million
          dollars) of Ultimate  Net Losses of the Ceding  Company not  including
          the Lloyd's  corporate  capital  vehicles and $10,000,000 (ten million
          dollars) of  Ultimate  Net Losses for the  Lloyd's  corporate  capital
          vehicles including but not limited to Oak Dedicated Limited and Archer
          Dedicated Limited.  Total property catastrophe losses shall be limited
          to a combined maximum of $25,000,000  (twenty five million dollars) of
          Ultimate Net Losses in the aggregate. All such amounts shall be net of
          all  recoveries,  salvages,  subrogations  and all  claims on  inuring
          reinsurance whether collectible or not; provided, however, that in the
          event  of  the  Insolvency  of  the  Ceding  Company,  payment  by the
          Reinsurers  shall be made in  accordance  with the  provisions  of the
          Insolvency  article.  Nothing  herein  shall be construed to mean that
          losses  under  this  Treaty  are  not  recoverable  until  the  Ceding
          Company's Ultimate Net Losses have been ascertained.



<PAGE>


         Said  Ultimate Net Losses may be paid,  outstanding,  or  incurred,  as
         referenced  in this Treaty.  In the event the  reference is to Ultimate
         Net Losses  outstanding,  the Term shall  include the Ceding  Company's
         loss reserves for reported losses, losses incurred but not reported and
         reserves for Allocated Loss Adjustment Expense for both reported losses
         and losses incurred but not reported as of the calculation date; in the
         event the reference is to Ultimate Net Losses incurred,  the term shall
         comprise  the sum of Ultimate  Net Losses paid and  Ultimate Net Losses
         outstanding.

         Ultimate  Net Loss shall also  include all net  commissions,  brokerage
         expenses and premium related  expenses of the Ceding  Company.  All net
         commissions,  brokerage  expenses,  and premium related expenses of the
         Ceding  Company  shall be subject to a maximum of 27.0%  (twenty  seven
         point zero  percent) of SNWPI.  Ultimate Net Losses shall  exclude both
         unallocated  loss adjustment  expenses and all other general  operating
         expenses  (overhead)  of the  Ceding  Company,  but shall  include  any
         unallocated loss adjustment  expenses where the underlying treaties and
         facultative  business with the Ceding Company client's provide for such
         coverage.  The Ceding  Company  shall  determine  net  commissions  and
         brokerage based on the overall  commissions and brokerage ratio for the
         underwriting  year of the  underlying  Contracts.  For  purposes of the
         Lloyds  corporate  capital  vehicles,  a flat ceding  commission of 20%
         (twenty  percent)  will apply to gross up the premium,  which will also
         determine SNWPI. In all cases,  Ceding Company definitions of premiums,
         net commissions  and brokerage in respect of Business  Covered shall be
         used for all purposes hereon.

F.       "Allocated  Loss  Adjustment  Expense" shall mean the Ceding  Company's
         share of costs and  expenses  allocable  to specific  claims  which are
         incurred  by  the  Ceding  Company  in  the  investigation,  appraisal,
         adjustment,  settlement,  litigation,  defense  or appeal  of  specific
         claims,  including  court  costs and costs of  supersedeas  and  appeal
         bonds, and including:

                           a)       pre-judgment interest, unless included as
                           part of the award or judgment;

                           b)       post-judgment interest; and

                           c) legal  expenses and costs  incurred in  connection
                           with coverage  questions and legal actions  connected
                           thereto (including declaratory judgment expense).

         Allocated Loss  Adjustment  Expense does not include  Unallocated  Loss
         Adjustment  Expense  unless  covered  by the  Ceding  Company  per  the
         underlying   treaties  and  facultative   business.   Unallocated  Loss
         Adjustment  Expense  includes,  but is not  limited  to,  salaries  and
         expenses of employees,  and office and other  overhead  expenses of the
         Ceding Company.

G.       "Ultimate  Net Loss Ratio"  shall mean the ratio of Ultimate Net Losses
         incurred divided by SNEPI as of the date of calculation.

H.       "Retention" shall equal 79.4%(seventy nine point four percent)of SNEPI.


<PAGE>

I.       "Reinsurers' Expense" shall equal 6.5% (six point five percent) of Base
         Premium less Ceding  Commissions plus 4.0% (four percent) of Additional
         Premium,  if  any.  Reinsurers'  Expense  amounts  in  respect  of Base
         Premiums  less  Ceding  Commissions  shall be  subject  to a minimum of
         $2,275,000 (two million, two hundred seventy five thousand dollars).

J.       "Finite  or  Non-traditional  Reinsurance  Agreements"  shall  mean any
         assumed  reinsurance  agreement which allows for Profit Sharing (or any
         other form of  contractual  adjustment)  exceeding  75%  (seventy  five
         percent) of initial reinsurance premium paid.
K.       "Contracts"  shall mean any and all original  policies,  contracts  and
         binders of insurance or reinsurance  underwritten by the Ceding Company
         whether facultative or treaty.

                          Article 7: Net Retained Lines
                          -----------------------------

This Treaty  applies only to that portion of any policy which the Ceding Company
retains  net for its own  account,  and in  calculating  the  amount of any loss
hereunder  and also in computing  the amount and amounts in excess of which this
Treaty  attaches,  only loss or losses in respect of that  portion of any policy
which the Ceding Company retains net for its own account shall be included.

The  amount of the  Reinsurers'  liability  hereunder  in respect of any loss or
losses shall not be increased by reason of the  inability of the Ceding  Company
to collect from any other reinsurer,  whether  specific or general,  any amounts
which may have become due from such  reinsurer,  whether such  inability  arises
from the insolvency of such other reinsurer or otherwise.


       Article 8: Base Premium, Additional Premium and Reinsurers' Expense
      --------------------------------------------------------------------

A.        Base Premium - The Ceding  Company shall pay to the Reinsurers
          Base  Premium of  10.548%  (ten  point  five four  eight  percent)  of
          Business  Covered  SNWPI  within 60 (sixty)  days from the end of each
          calendar  quarter.  Base Premiums  shall be credited to the Funds Held
          Account  as  of  each  respective  calendar  quarter  that  applicable
          Business  Covered  SNWPI is recorded by the Ceding  Company.  The Base
          Premiums shall not be less than $41,400,000  (forty one million,  four
          hundred  thousand  dollars) and shall not be greater than  $52,900,000
          (fifty two million,  nine hundred thousand  dollars).  For purposes of
          reporting and payment timing, SNWPI shall be based upon the respective
          calendar  quarter  wherein  written  premium is recorded by the Ceding
          Company. In accordance with Article 6: Definitions,  Section A. SNWPI,
          Component 1. shall be deemed recorded in the first calendar quarter of
          1998.


B.       Additional  Premium  - Within  60 days  from  the end of each  calendar
         quarter,  the Ceding  Company  shall pay to the  Reinsurers  Additional
         Premium equal to 73.5%  (seventy  three point five percent) of Ultimate
         Net Losses ceded in excess of 212.86%  (two hundred  twelve point eight
         six percent) of the net result of Base Premium less Ceding  Commission.
         Additional  Premium  shall be the lesser of 8.01% (eight point zero one
         percent) of SNWPI or $40,200,000  (forty million,  two hundred thousand
         dollars) in the  aggregate.  Net  Additional  Premium  (additions  less
         deductions)  shall be deemed credited 100% (one hundred percent) to the
         Funds Held  Account as of  January 1, 1998 for all  purposes  including
         Interest Credit.

C.       Reinsurers'  Expense - The  Reinsurers'  Expense  amounts shall be paid
         within 60 (sixty) days in arrears of each respective  calendar quarter.
         Reinsurers' Expense amounts in respect of Additional Premiums,  if any,
         shall  be  paid  within  75  (seventy  five)  days  in  arrears  of the
         respective  calendar  quarter end for which such  calculation  is being
         made. Such amounts shall be deducted from the Funds Held Account.


                          Article 9: Ceding Commission
                          ----------------------------

A.       The Reinsurers shall pay the Ceding Company Ceding  Commission equal to
         23.91%  (twenty three point nine one percent) of Base  Premiums.  There
         shall be no Ceding Commission in respect of Additional Premium.

B.       Ceding  Commissions are payable by the Reinsurers to the Ceding Company
         at the time final settlement of all Ultimate Net Losses hereunder or at
         commutation, whichever occurs first. Payment shall be made by deduction
         from the Funds Held Account  until and unless  depleted.  If exhausted,
         payment shall be made out of other funds of the Reinsurers.


                 Article 10: Profit Sharing, Funds Held Account
                               and Interest Credit
                 ----------------------------------------------

A.       Profit Sharing

         Upon finalization of the payment of all Ultimate Net Losses recoverable
         hereon and/or Commutation, the Reinsurers will relinquish to the Ceding
         Company 100% (one hundred  percent) of the remaining Funds Held Account
         balance,  if any.  Payment of Profit  Sharing in  accordance  with this
         Article  shall  release  the  Reinsurers  from all  current  and future
         liability under this Treaty.

B.       Funds Held Account

         For  purposes of this  Article,  the Ceding  Company  shall  maintain a
         cumulative Funds Held Account comprised of the following:

         1.       The Funds Held Account at December 31, 1997 shall be equal to
                  zero;

         2.       The Funds Held Account at each subsequent calendar quarter end
                  shall be equal to:

                           a.  The Funds Held Account at the end of the prior
                               calendar quarter; plus

                           b.  Base Premiums and  Additional  Premiums,  if any;
                               less

                           c.  Ceding Commissions paid by Reinsurers; less

                           d.  Reinsurers' Expense; plus

                           e.  Interest Credit; less

                           f.  Ultimate Net Losses due from the  Reinsurers  for
                               the prior  calendar  quarter in  accordance  with
                               Article  5:   Coverage   and   Aggregate   Limit,
                               (including Commutation payments).

         The Ceding Company shall report balances quarterly to the Reinsurers as
         soon as practicable but no later than 75 (seventy five) days in arrears
         of each calendar quarter end.

         The  Reinsurers  shall not  transfer  or assign its rights to the Funds
         Held Account hereon unless this Treaty is surrendered  and a new Treaty
         is issued.  Under any and all  circumstances,  the Ceding  Company must
         make a book  entry  of a  transfer  or  assignment  in  order  for such
         transfer or assignment to be valid.

C.       Interest Credit

         As of the end of each calendar quarter, the Ceding Company shall credit
         the  Funds  Held  Account  with  an  Interest   Credit   determined  by
         multiplying  the  balance of the Funds  Held  Account at the end of the
         respective  calendar quarter by 1.8481% (one point eight four eight one
         percent) to achieve an  effective  annual rate of 7.6% (seven point six
         percent).

         Interest  Credit  shall  continue  even  in the  event  of  the  Ceding
         Company's Insolvency.


                              Article 11: Currency
                              --------------------

All of the provisions of this Treaty  involving  dollar amounts are expressed in
terms  of  United  States  of  America  Dollars  and all  Premiums  and loss and
Allocated  Loss  Adjustment  Expense  payments shall be made in United States of
America Dollars.


                                Article 12: Taxes
                                -----------------

A.       In  consideration  of the terms under which this Treaty is issued,  the
         Ceding  Company  undertakes  not to claim any  deduction of the Premium
         hereon  when  making  Canadian  tax  returns or when making tax returns
         other than  income or profit tax returns to any state or  territory  of
         the United States or to the District of Columbia.

B.       The Ceding  Company is solely  liable for any Federal  Excise Tax (FET)
         applicable  to this Treaty.  Any FET payable  shall be paid directly by
         the Ceding  Company to the taxing  authorities  and is in  addition  to
         premiums. No deduction shall be made from the Funds Held Account.



<PAGE>

             Article 13: Accounts, Remittances and Loss Settlements
             ------------------------------------------------------

A.       Within 60 (sixty) days following the end of each calendar quarter,  the
         Ceding Company shall report to the Reinsurers the amount of:

         1.       Cumulative Business Covered SNWPI and Retention;

         2.       Cumulative Ultimate Net Losses paid;

         3.       Ultimate Net Losses outstanding;

         4.       Ceded  Ultimate  Net Losses paid and  outstanding  under this
                  Treaty,  in  accordance  with Article 5:  Coverage and 
                  Aggregate Limit;

         5.       Base Premium and  Additional  Premium,  if any, in  accordance
                  with  Article  8:  Base   Premium,   Additional   Premium  and
                  Reinsurers' Expense.

         The  reports  outlined  in this  section  shall  continue  until  final
         settlement of all losses  hereunder or Commutation  in accordance  with
         Article 18: Commutation.

B.       Remittance of premium amounts due shall be in the manner outlined under
         Article 8: Base Premium, Additional Premium and Reinsurers' Expense.

C.       Settlement of Ultimate Net Losses paid in excess of the Retention shall
         be made by the  Reinsurers to the Ceding  Company  quarterly  within 15
         (fifteen)  days  of  receipt  of the  report  by the  Reinsurers  or 75
         (seventy  five) days after the end of the quarter,  whichever is later.
         Ultimate  Net Losses due from  Reinsurers  shall be  deducted  from the
         Funds Held Account until depleted. Thereafter, the Reinsurers shall pay
         Ultimate Net Losses due from other funds of the Reinsurers.  Reinsurers
         payment of Ultimate Net Losses shall be subject to the Aggregate  Limit
         hereunder  as  detailed in Article 5:  Coverage  and  Aggregate  Limit,
         Section B.


                        Article 14: Loss Reserve Funding
                        --------------------------------

The Reinsurers will maintain  appropriate  reserves with respect to its share of
the loss  reserves  ceded and required  under the terms of this Treaty which are
reported by the Ceding Company on the Business Covered of this Treaty.

The Reinsurers agrees to provide a clean,  irrevocable and unconditional  Letter
of Credit in favor of the  Ceding  Company  issued by a bank  acceptable  to the
Ceding  Company  adjusted  to at all  times  be equal  to the  ceded  cumulative
Ultimate Net Losses outstanding hereunder less the Funds Held Account balance at
such dates.  Such  Letter of Credit  shall be in the form,  amount,  and with an
acceptable NAIC bank required to allow the Ceding Company to take full statutory
credit for amounts recoverable under this Treaty.


<PAGE>

The Ceding Company shall reimburse the Reinsurers for the actual annual security
cost  subject to a maximum of .45%  (point  four five  percent) of the amount of
Letter of Credit  issued or  maintained  hereon as of each  December  31st.  The
Reinsurers shall request such  reimbursement  whereupon the Ceding Company shall
make payment by direct wire transfer to the  Reinsurers.  All such amounts shall
not be deducted from the Funds Held Account.


                       Article 15: Excess of Policy Limits
                       -----------------------------------

A.       This Treaty shall protect the Ceding Company, within the limits hereof,
         for 100% (one  hundred  percent)  of loss in  Excess  of Policy  Limits
         emanating from underlying  treaties of the Ceding Company's clients and
         for 80% (eighty percent) of loss in excess of the limit of its original
         treaties, such loss in excess of the limit having been incurred because
         of  failure by it to settle  within  the  Treaty  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.

         However,  this Article shall not apply where the loss has been incurred
         due to fraud by a member  of the  Board  of  Directors  or a  corporate
         officer of the Ceding Company acting individually or collectively or in
         collusion with any individual or corporation or any other  organization
         or party  involved in the  presentation,  defense or  settlement of any
         claim covered hereunder.

         For the purpose of this Article,  the word"loss" shall mean any amounts
         for which the Ceding  Company would have been  contractually  liable to
         pay had it not been for the limit of the original policy.


                    Article 16: Extra Contractual Obligations
                    -----------------------------------------

A.        This Treaty shall protect the Ceding Company for 100% (one hundred

          percent) of Extra  Contractual  Obligations  emanating from underlying
          treaties of the Ceding  Company's  clients and for 80% (eighty) of any
          Extra  Contractual  Obligations  within  the limits  hereof.  The term
          "Extra  Contractual  Obligations" is defined as those  liabilities not
          covered  under any other  provision of the Ceding  Company's  original
          treaties  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 Ceding  Company to settle
          within the treaty 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
          Ceding Company shall be deemed, in all  circumstances,  to be the date
          of the original disaster and/or casualty.



<PAGE>

         However,  this Article shall not apply where the loss has been incurred
         due to fraud by a member  of the  Board  of  Directors  or a  corporate
         officer of the Ceding Company acting individually or collectively or in
         collusion with any individual or corporation or any other  organization
         or party  involved in the  presentation,  defense or  settlement of any
         claim covered hereunder.


                         Article 17: Offset and Security
                         -------------------------------

A.       The Ceding  Company or the Reinsurers  shall have and may exercise,  at
         any time and from  time to time,  the right to offset  any  balance  or
         balances  whether  on  account  of Base  Premium,  Additional  Premium,
         Interest  Credit,  or on account of ceded  Ultimate  Net Losses paid or
         otherwise, due from one party to the other party hereto under the terms
         of this Treaty.

B.       Each party  hereby  assigns  and pledges to the other party (or to each
         other party,  if more than one), all of its rights under this Treaty to
         receive  Premiums  or loss  payments  at any time from such other party
         ("Collateral",  as further  defined in C. below) to secure its Premiums
         or loss  obligations  to such other party at any time under this Treaty
         ("Secured Obligations"). If at any time a party is in default under any
         Secured   Obligation   or  shall  be   subject   to  any   liquidation,
         rehabilitation,  reorganization or conservation proceeding,  each other
         party shall be entitled in its discretion,  to apply or to withhold for
         the  purpose of applying in due course,  any  Collateral  assigned  and
         pledged to it by the former  party and  otherwise  to realize upon such
         Collateral as security for such Secured Obligations.

C.       The security  interest  described  herein,  and the term  "Collateral",
         shall apply to all payments and other proceeds in respect of the rights
         assigned and pledged.  A party's security  interest in Collateral shall
         be deemed evidenced only by the counterpart of this Treaty delivered to
         such party.

D.       Each right  under this  Article is a separate  and  independent  right,
         exercisable,  without  notice or demand,  alone or together  with other
         rights ,in the sole  election  of the party  entitled  thereto,  and no
         waiver,  delay, or failure to exercise,  in respect of any right, shall
         constitute a waiver of any right.  The provisions of this Article shall
         survive any cancellation or other termination of this Treaty.


                             Article 18: Commutation
                             -----------------------

A.       The  Ceding  Company  shall  have the  sole  option,  effective  at any
         calendar  quarter  ending on or after  December 31, 1998 to commute all
         ceded  Ultimate  Net Losses  outstanding  hereunder.  The date that the
         Ceding Company elects to commute shall be deemed the Commutation  date.
         At  Commutation,  the  Reinsurers  shall pay to the Ceding  Company the
         lesser of:



<PAGE>


         1.       The present value  (calculated at the Interest  Credit rate as
                  per  Article  10:  Profit  Sharing,  Funds  Held  Account  and
                  Interest  Credit) of ceded Ultimate Net Losses  outstanding as
                  of the  Commutation  date as determined by the Ceding Company,
                  subject to the  Reinsurers'  agreement.  Should the Reinsurers
                  fail to agree,  a present value  analysis will be conducted by
                  an independent  actuarial  firm  acceptable to both the Ceding
                  Company and the  Reinsurers,  with the Ceding Company  bearing
                  the costs of such analysis; or

         2.       The existing value of the Funds Held Account (as defined in
                  Article 10:  Profit  Sharing,  Funds Held Account and Interest
                  Credit) as of the Commutation date.

         Said  payments  shall  constitute,  together  with any  Profit  Sharing
         payment,  a full and final settlement of all terms of this Treaty;  the
         Ceding  Company will execute a hold  harmless  agreement so stating and
         the  Reinsurers  will be thereby  released  from all current and future
         liability under this Treaty.

B.       Commutation  payments in accordance  with this Article shall be treated
         as Ultimate Net Losses paid under this Treaty for  determination of the
         Funds Held Account.


                        Article 19: Errors and Omissions
                        --------------------------------

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


                          Article 20: Access to Records
                          -----------------------------

The  Ceding  Company  shall  place  at the  disposal  of the  Reinsurers  at all
reasonable  times, and the Reinsurers  shall have the right to inspect,  through
its  authorized  representatives,  all books,  records  and papers of the Ceding
Company in  connection  with any  reinsurance  hereunder or claims in connection
herewith.

The  Reinsurers  agrees that it will not disclose any  confidential  information
obtained by it hereunder to parties not subject to this Treaty  except under the
following circumstances and then only as necessary.

A.       When disclosure of such information is required in the normal course of
         Reinsurers' business; or

B.       With the prior written consent of the Ceding Company; or

C.       When  Reinsurers  is  required by a subpoena or court order to disclose
         such  information.  The  Reinsurers  shall  promptly  notify the Ceding
         Company  of any  attempt  by a third  party to obtain  from it any such
         confidential information.

The Reinsurers will provide the Ceding Company or its designated  representative
with  such  information  as the  Reinsurers  and  Ceding  Company  may  agree is
necessary to the Ceding Company's handling of business reinsured herein.

The  obligation  contained in the provision  shall survive  termination  of this
Treaty.


                            Article 21: No Assignment
                            -------------------------

The Ceding Company and the Reinsurers hereby agree that neither party shall have
the right to assign its  respective  interests  and  liabilities,  including the
Funds Held Account,  under this Treaty.  Notwithstanding the above, this Article
shall  not  restrict  the  Ceding  Company  from  making  investments  it  deems
appropriate.

                             Article 22: Insolvency
                             ----------------------

A.       In the event of the Insolvency of the Ceding Company, reinsurance under
         this  Treaty  shall be payable by the  Reinsurers  (on the basis of the
         liability of the Ceding Company under the policy or policies  reinsured
         without  diminution because of the Insolvency of the Ceding Company) to
         the  Ceding  Company  or  to  its  liquidator,  receiver  or  statutory
         successor,  except  as  provided  by  Section  4118a  of the  New  York
         Insurance Law or except:

         1.       Where the Treaty  specifically  provides another payee of such
                  reinsurance  in the  event  of the  Insolvency  of the  Ceding
                  Company.

         2.       Where the  Reinsurers,  with the consent of the direct insured
                  or insureds, has assumed such policy obligations of the Ceding
                  Company as direct  obligations of the Reinsurers to the payees
                  under such policies and in substitution for the obligations of
                  the Ceding Company to such payees.

B.        It is agreed,  however,  that the  liquidator  or  receiver or
          statutory successor of the insolvent Ceding Company shall give written
          notice  to the  Reinsurers  of the  pendency  of a claim  against  the
          insolvent Ceding Company on the policy or policies  reinsured within a
          reasonable time after such claim is filed in the Insolvency proceeding
          and 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  which they may deem  available to the Ceding  Company or its
          liquidator  or  receiver or  statutory  successor.  The  expense  thus
          incurred  by the  Reinsurers  shall be  chargeable,  subject  to court
          approval,  against the insolvent Ceding Company as part of the expense
          of liquidation to the extent or a  proportionate  share of the benefit
          which  may  accrue  to the  Ceding  Company  solely as a result of the
          defense undertaken by the Reinsurers.

C.       Should the Ceding  Company go into  liquidation or should a receiver be
         appointed,  the  Reinsurers  shall be  entitled to deduct from any sums
         which may be or may become due to the Ceding  Company under this Treaty
         any sums which are due to the  Reinsurers  by the Ceding  Company under
         this Treaty and which are payable at a fixed or stated date, as well as
         any other  sums due the  Reinsurers  which are  permitted  to be offset
         under applicable law.


<PAGE>

                             Article 23: Arbitration
                             -----------------------

A.        As a condition precedent to any right of action hereunder,  if
          any dispute shall arise between the Ceding  Company and the Reinsurers
          with  reference to the  interpretation  of this Treaty or their rights
          with respect to any transaction involved,  whether such dispute arises
          before or after  termination  of this Treaty,  such dispute,  upon the
          written request of either the Ceding Company or the Reinsurers,  shall
          be  submitted  to three  arbitrators,  one to be chosen by the  Ceding
          Company, one to be chosen by the Reinsurers,  and the third by the two
          arbitrators so chosen.  If either the Ceding Company or the Reinsurers
          refuse or neglect to appoint an  arbitrator  within 30  (thirty)  days
          after the receipt of written notice from the other party requesting it
          do so, the requesting  party may appoint two  arbitrators.  If the two
          arbitrators  fail to  agree  on the  selection  of a third  arbitrator
          within 30 (thirty) days of their appointment,  each of them shall name
          two, of whom each shall decline one and the decision  shall be made by
          the American Arbitration Association.  All arbitrators shall be active
          or  retired   disinterested   officers  of  insurance  or  reinsurance
          companies  not under the  management  or  control of any party to this
          Treaty.


B.       The  arbitrators  are  relieved  of all  judicial  formalities  and may
         abstain from  following  the strict rules of law; they shall make their
         award with a view to  effecting  the general  purpose of this Treaty in
         accordance with a literal  interpretation of the language.  Each of the
         Ceding  Company  and  the  Reinsurers  shall  submit  its  case  to its
         arbitrator  within 30  (thirty)  days of the  appointment  of the third
         arbitrator.

C.       The  decision  in writing of any two  arbitrators,  when filed with the
         parties  hereto,  shall be final and  binding  on all  parties  to this
         Treaty.  Judgment  may  be  entered  upon  the  final  decision  of the
         arbitrators  in any  court  having  jurisdiction.  Each  of the  Ceding
         Company and the Reinsurers  shall bear the expense of their  respective
         chosen  arbitrator  and shall  jointly and equally  bear with the other
         party the expense of the third arbitrator and of the arbitration.  Said
         arbitration  shall take place in  Stamford,  Connecticut,  unless  some
         other  place is  mutually  agreed  upon by the Ceding  Company  and the
         Reinsurers.


                           Article 24: Service of Suit
                           ---------------------------

It is agreed  that in the event of the failure of the  Reinsurers  hereon to pay
any amount claimed to be due to the Ceding Company hereunder, the Reinsurers, at
the request of the Ceding Company, will submit to the jurisdiction of a court of
competent  jurisdiction  within  the  United  States.  The  foregoing  shall not
constitute a waiver of the right of the  Reinsurers  to commence any suit in, or
to  remove,  remand  or  transfer  any  suit to any  other  court  of  competent
jurisdiction in accordance  with the applicable  statutes of the state or United
States  thereto.  It is further agreed that this Treaty shall be governed by the
laws of the State of Connecticut.

It is further agreed that service of process in such suit may be made upon Kroll
& Tract, Fifth Floor, 520 Madison Avenue, New York, New York, 10022-4235, United
States of America and that in any suit  instituted  against any one of them upon
this Treaty,  the  Reinsurers  will abide by the final decision of such Court 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  Reinsurers  in any
suit and/or upon request of the Ceding Company to give a written  undertaking to
the  Ceding  Company  that  they  will  enter  a  general  appearance  upon  the
Reinsurers' behalf in the event such a suit shall be instituted.

Further,  pursuant  to any  statute of any state,  territory  or District of the
United States which makes provision  therefor,  the Reinsurers hereby designates
the  Superintendent,  Commissioner  or Director of  Insurance  or other  officer
specified  for that purpose in the  statute,  or his  successor or  successors n
office,  as its 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
Ceding  Company or any  beneficiary  hereunder  arising out of this Treaty,  and
hereby  designate  the  above  named  as the  person  to whom  said  officer  is
authorized to mail such process or a true copy thereof.


                            Article 25: Intermediary
                            ------------------------

Pegasus  Advisors,  Inc., 35 Tower Lane, Avon, CT 06001, is hereby recognized as
the Intermediary  negotiating this Treaty for all business hereunder and through
whom all  communications,  in respect of London  Life and  Casualty  Reinsurance
Corporation  only,  relating  hereto  (including  but not  limited  to  notices,
statements and reports) shall be transmitted to both parties.  It is understood,
as regards  remittances due either party  hereunder,  that payment by the Ceding
Company to the  Intermediary  shall  constitute  payment to the  Reinsurers  but
payment by the Reinsurers to the Intermediary  shall only constitute  payment to
the Ceding  Company to the extent such  payments  are  actually  received by the
Ceding Company.  Notwithstanding  the foregoing,  it is agreed that all payments
will be direct from the  Reinsurers  to the Ceding  Company,  or from the Ceding
Company to the Reinsurers, as appropriate.


<PAGE>
                        NUCLEAR INCIDENT EXCLUSION CLAUSE
                       PHYSICAL DAMAGE - REINSURANCE - USA
                       -----------------------------------

         1. This Contract  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  Reinsurers  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 Contract 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 propert
                  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   or  "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 Contract  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 the Reassured does not have knowledge of such nuclea
                  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  Contract  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. The 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.

<PAGE>


                       NUCLEAR INCIDENT EXCLUSION CLAUSE -
                          PHYSICAL DAMAGE AND LIABILITY
               (BOILER AND MACHINERY POLICIES) - REINSURANCE - USA


1. This Contract does not cover any loss or liability  accruing to the Reassured
as a member of, or  subscriber  to, any  association  of insurers or  reinsurers
formed  for the  purpose  of  covering  nuclear  energy  risks or as a direct or
indirect reinsurer of any such member, subscriber or association.

2. Without in any way restricting the operation of paragraph (1) of this Clause,
it is understood  and agreed that for all purposes of this Contract all original
Boiler and Machinery  Insurance or Reinsurance  contracts of the Reassured shall
be deemed to include the following provisions of this paragraph:

         This Policy does not apply to "loss", whether it be direct or indirect,
 proximate or remote

         (a)      from an  Accident  caused  directly or  indirectly  by nuclear
                  reaction, nuclear radiation or radioactive contamination,  all
                  whether controlled or uncontrolled; or

         (b)      from  nuclear  reaction,   nuclear  radiation  or  radioactive
                  contamination, all whether controlled or uncontrolled,  caused
                  directly or indirectly by,  contributed to or aggravated by an
                  Accident.

3.  However,  it is  agreed  that  loss  arising  out of the use of  Radioactive
Isotopes in any form is not hereby excluded from reinsurance protection.

4. Without in any way restricting  the operation of paragraph (a) hereof,  it is
understood and agreed that

         (a)      all policies  issued by the  Reassured  effective on or before
                  30th April  1958,  shall be free from the  application  of the
                  other  provisions  of this  Clause  until  expiry date or 30th
                  April,  1961,  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,  effective on or before 30th June,  1958, shall
                  be free from the  application of the other  provisions of this
                  Clause until expiry date or 30th June,  1961,  whichever first
                  occurs,  whereupon  all the  provisions  of this Clause  shall
                  apply.



<PAGE>


                        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 Insureres  or  Reinsurers  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 prescribed  substances,
                  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  provisions  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 "prescribed  substances"  shall have the meaning given to it by
the Atomic Energy Control Act R.S.C. 1974 or by any law amendatory thereof.

     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 by any nuclear incident as defined in The Nuclear  Liability Act, nuclear
explosion or 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, 1984.




<PAGE>


                       NUCLEAR INCIDENT EXCLUSION CLAUSE -
                          PHYSICAL DAMAGE AND LIABILITY
             (BOILER AND MACHINERY POLICIES) - REINSURANCE - CANADA


     1.  This  Contract  does not cover any loss or  liability  accruing  to the
Reassured  as a member of, or  subscriber  to, any  association  of  insurers or
reinsurers  formed for the  purpose of  covering  nuclear  energy  risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

     2. Without in any way  restricting  the  operation of paragraph (1) of this
Clause,  it is understood  and agreed that for all purposes of this Contract all
original  Boiler  and  Machinery  Insurance  or  Reinsurance  contracts  of  the
Reassured shall be deemed to include the following provisions of this paragraph:

     This  policy  does not apply to loss,  whether  it be  direct or  indirect,
proximate or remote

     (a)          from an  Accident  caused  directly or  indirectly  by nuclear
                  reaction, nuclear radiation or radioactive contamination,  all
                  whether controlled or uncontrolled; or

     (b)          from  nuclear  reaction,   nuclear  radiation  or  radioactive
                  contamination, all whether controlled or uncontrolled,  caused
                  directly or indirectly by,  contributed to or aggravated by an
                  Accident.

     3.  However,  it is agreed that loss arising out of the use of  Radioactive
Isotopes in any form is not hereby excluded from reinsurance protection.

     4. Without in any way restricting the operation of paragraph (1) hereof, it
is understood and agreed that policies  issued by the Reassured  effective 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,  1961,  whichever
first occurs, whereupon all the provisions of this Clause shall apply.



<PAGE>

                        NUCLEAR INCIDENT EXCLUSION CLAUSE
                        LIABILITY - REINSURANCE - U.S.A.
                        ---------------------------------

     1. This  Agreement  does not cover any loss or  liability  accruing  to the
Cedent as a member  of,  or  subscriber  to,  any  association  of  insurers  or
reinsurers  formed for the  purpose of  covering  nuclear  energy  risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

     2. Without in any way  restricting  the  operation of paragraph (1) of this
Clause it is understood  and agreed that for all purposes of this  Agreement all
the  original  policies  of the Cedent  (new,  renewal and  replacement)  of the
classes  specified in Clause II of this paragraph (2) from the time specified in
Clause  III of this  paragraph  (2)  shall be deemed to  include  the  following
provision (specified as the Limited Exclusion Provision):

Limited Exclusion Provision

        I.        It is  agreed  that  the  policy  does  not  apply  under  any
                  liability coverage, to (injury,  (sickness,  disease, death or
                  destruction  (bodily injury or property damage with respect to
                  which an insured  under the policy is also an insured  under a
                  nuclear  energy  liability  policy  issued by  Nuclear  Energy
                  Liability   Insurance   Association,   Mutual   Atomic  Energy
                  Liability  Underwriters  or Nuclear  Insurance  Association of
                  Canada,  or would be an insured  under any such policy but for
                  its termination upon exhaustion of its limits of liability.

        II.       Family   Automobile   Policies   (liability   only),   Special
                  Automobile Policies (private passenger automobiles,  liability
                  only),  Farmers  Comprehensive   Personal  Liability  Policies
                  (liability only),  Comprehensive  Personal  Liability Policies
                  (liability  only) or  policies  of a similar  nature;  and the
                  liability  portion of  combination  forms  related to the four
                  classes of policies  stated  above,  such a the  Comprehensive
                  Dwelling  Policy  and  the  applicable   types  of  Homeowners
                  Policies.

        III.      The inception dates and thereafter of all original policies as
                  described in II above,  whether new,  renewal or  replacement,
                  being policies which either

                 (a)       become effective on or after 1st May, 1960, or

                 (b)       become  effective  before  that date and  contain the
                           Limited Exclusion  provision set out above;  provided
                           this  paragraph (2) shall not be applicable to Family
                           Automobile Policies,  Special Automobile Policies, or
                           policies or combination policies of a similar nature,
                           issued by the Cedent on New York risks, until 90 days
                           following approval of the Limited Exclusion Provision
                           by the  Governmental  Authority  having  jurisdiction
                           thereof.

     3. Except for those classes of policies specified in Clause II of paragraph
(2) and without in any way  restricting  the  operation of paragraph (1) of this
Clause,  it is understood and agreed that for all purposes of this Agreement the
original  liability  policies  of the  Cedent  (new,  renewal  and  replacement)
affording the following coverages:

         Owners,   landlords  and  Tenants  Liability,   Contractual  Liability,
         Elevator  Liability,   Owners  or  Contractors   (including  railroad),
         Protective  Liability,  Manufacturers and Contractors Liability Product
         Liability,   Professional  and  Malpractice   Liability,   Storekeepers
         Liability,   Garage   Liability,    Automobile   Liability   (including
         Massachusetts Motor Vehicle or Garage Liability)

shall be  deemed to  include,  with  respect  to such  coverages,  from the time
specified in Clause V of this paragraph (3), the following provision  (specified
as the Broad Exclusion Provision):

Broad Exclusion Provision

It is agreed that the policy does not apply:

I.       Under an Liability Coverage, to
        (injury, sickness, disease, death or destruction
        (bodily injury or property damage

        (a)                with respect to which an insured  under the policy is
                           also an  insured  under a  nuclear  energy  liability
                           policy issued by Nuclear Energy  Liability  Insurance
                           Association,    Mutual   Atomic   Energy    Liability
                           Underwriters  or  Nuclear  Insurance  Association  of
                           Canada,  or would be an insured under any such policy
                           but for its termination  upon exhaustion of its limit
                           or liability; or

        (b)                resulting  from the  hazardous  properties of nuclear
                           material  and with respect to which (1) any person or
                           organization   is  required  to  maintain   financial
                           protection pursuant to the Atomic Energy Act of 1954,
                           or any law amendatory thereof, or (2) the insured is,
                           or had this policy not been issued would be, entitled
                           to indemnity  from the United  States of America,  or
                           any agency thereof,  under any agreement entered into
                           by the  United  States  of  America,  or  any  agency
                           thereof, with any person or organization.

II.     Under any Medical Payments Coverage, or under any Supplementary Payment
        Provision relating to
        (immediate medical or surgical relief,  (first aid, to expenses incurred
        with  respect  to (bodily  injury,  sickness,  disease or death  (bodily
        injury
        resulting from the hazardous  properties of nuclear material and arising
        out  of  the   operation  of  a  nuclear   facility  by  any  person  or
        organization.

III.    Under any Liability Coverage, to
        (injury,  sickness,  disease,  death or  destruction  (bodily  injury or
        property  damage  resulting  from the  hazardous  properties  of nuclear
        material if

        (a)                the nuclear  material (1) is at any nuclear  facility
                           owned by, or  operated by or on behalf of, an insured
                           or (2) has been discharged or dispersed therefrom;

        (b)                the nuclear  material is  contained  in spent fuel or
                           waste  at  any   time   possessed,   handled,   used,
                           processed,  stored,  transported or disposed or by or
                           on behalf of an insured; or

        (c)                (the injury, sickness,  disease, death or destruction
                           (the bodily injury or property damage
                           arises  out  of  the  furnishing  by  an  insured  of
                           services, materials, parts or equipment in connection
                           with   the   planning,   construction,   maintenance,
                           operation or use of any nuclear facility, but if such
                           facility  is  located  within  the  United  States of
                           America,  its territories,  or possessions or Canada,
                           this  exclusion  (c)  applies  only to  (injury to or
                           destruction  of  property at such  nuclear  facility.
                           (property  damage to such  nuclear  facility  and any
                           property thereat.

IV. As used in this endorsement:

     "hazardous properties" include radioactive,  toxic or explosive properties;
     "nuclear  material"  means source  material,  special  nuclear  material or
     by-product  material;  "source  material",  "special nuclear  material" and
     "by-product  material" have the meanings given to them in the Atomic Energy
     Act of 1954 or in any law amendatory  thereof;  "spent fuel" means any fuel
     element or fuel component,  solid or liquid, which has been used or exposed
     to radiation in a nuclear  reactor;  "waste"  means any waste  material (1)
     containing  by-product material and (2) resulting from the operation by any
     person  or  organization  of  any  nuclear  facility  included  within  the
     definition of nuclear facility under paragraph (a) or (b) thereof; "nuclear
     facility" means

     (a)      any nuclear reactor,

     (b)      any equipment or device  designed or used for (1)  separating  the
              isotopes of uranium or  plutonium,  (2)  processing  or  utilizing
              spent fuel, or (3) handling, processing or packaging waste,

     (c)      any equipment or device used for the  processing,  fabricating  or
              alloying  of  special  nuclear  material  if at any time the total
              amount of such  material  in the  custody  of the  Insured  at the
              premises where such equipment or device is located  consists of or
              contains more than 25 grams of uranium 235,

     (d)      any structure,  basin,  excavation,  premises or place prepared or
              used for the storage or disposal of waste

     and  includes  the site on  which  any of the  foregoing  is  located,  all
     operations   conducted  on  such  site  and  all  premises  used  for  such
     operations;  "nuclear  reactor"  means any  apparatus  designed  or used to
     sustain nuclear fission in a self-supporting chain reaction or to contain a
     critical  mass of  fissionable  material;  (with  respect  to  injury to or
     destruction  of property,  the word  "injury" or  "destruction"  ("property
     damage"  includes  all  forms of  radioactive  contamination  of  property.
     (includes all forms of radioactive contamination of property.

V.   The  inception  dates and  thereafter  of all original  policies  affording
     coverages  specified  in  this  paragraph  (3),  whether  new,  renewal  or
     replacement,  being  policies  which become  effective on or after 1st May,
     1960, provided this paragraph (3) shall not be applicable to

     (i)      Garage and Automobile Policies issued by the Cedent on New York 
              risks, or

     (ii)      statutory  liability insurance required under Chapter 90, General
               laws of  Massachusetts,  until 90 days following  approval of the
               Broad Exclusion  Provision by the  Governmental  Authority having
               jurisdiction thereof.

4.       Without in any way  restricting  the operation of paragraph (1) of this
         Clause,  it is understood and agreed that  paragraphs (2) and (3) above
         are not  applicable  to  original  liability  policies of the Cedent in
         Canada and that with  respect of such  policies  this  Clause  shall be
         deemed to include the Nuclear  Energy  Liability  Exclusion  provisions
         adopted by the Canadian  Underwriters'  Association or the  Independent
         Insurance Conference of Canada.

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

Note:    The words printed in italics in the Limited Exclusion  provision and in
         the Broad Exclusion  Provision shall apply only in relation to original
         liability  policies  which include a Limited  Exclusion  Provision or a
         Broad Exclusion provision containing those words.



<PAGE>


                        NUCLEAR INCIDENT EXCLUSION CLAUSE
                        LIABILITY - REINSURANCE - CANADA
                        ---------------------------------

     1.  This  Contract  does not cover any loss or  liability  accruing  to the
Company as a member  of, or  subscriber  to,  any  association  of  insurers  or
reinsurers  formed for the  purpose of  covering  nuclear  energy  risks or as a
direct or indirect reinsurer of any such member, subscriber, or association.

     2.  Without in any way  restricting  the  operation  of paragraph 1 of this
Clause,  it is agreed that for all  purposes of this  Contract  all the original
liability contracts of the Company, whether new, renewal or replacement,  of the
following classes, namely,

                  Personal Liability
                  Farmers Liability
                  Storekeepers Liability

which  become  effective  on or after  31st  December  1984,  shall be deemed to
include, from their inception dates and thereafter, the following provision:

                  Limited Exclusion Provision

        This  Policy  does not apply to bodily  injury or  property  damage with
        respect to which the Insured is also insured under a contract of nuclear
        energy  liability  insurance  (whether  the  Insured  is  named  in such
        contract  or not and  whether  or not it is legally  enforceable  by the
        Insured)  issued by the Nuclear  Insurance  Association of Canada or any
        other group or pool of  insurers  or would be an Insured  under any such
        policy but for its termination upon exhaustion of its limit of liability

        With respect to property,  loss of use of such property  shall be deemed
        to be property damage.

     3.  Without in any way  restricting  the  operation  of paragraph 1 of this
Clause,  it is agreed that for all  purposes of this  Contract  all the original
liability contracts of the Company, whether new, renewal or replacement,  of any
class whatsoever (other than Personal Liability, Farmers Liability, Storekeepers
Liability or Automobile Liability contracts), which become effective on or after
31st December 1984,  shall be deemed to include,  from their inception dates and
thereafter, the following provision:

         Broad Exclusion Provision

         It is agreed that this Policy does not apply:

          (a)  to  liability  imposed by or arising  under the  Nuclear
               Liability Act; or

          (b)  to bodily  injury or  property  damage  with  respect to
               which an  Insured  under  this  Policy  is also  insured  under a
               contract  of nuclear  energy  liability  insurance  (whether  the
               Insured is named in such contract or not and whether or not it is
               legally  enforceable  by  the  Insured)  issued  by  the  Nuclear
               Insurance  Association of Canada or any other insurer or group or
               pool of insurers or would be an Insured under any such policy but
               for its termination upon exhaustion of its limit of liability; or

          (c)  to  bodily  injury  or  property  damage  resulting  directly  or
               indirectly from the nuclear energy hazard arising from:

               (1)  the ownership,  maintenance,  operation or use of a
                    nuclear facility by or on behalf of an Insured;

               (2)  the furnishing by an Insured of services,  materials,  parts
                    or equipment in connection with the planning,  construction,
                    maintenance, operation or use of any nuclear facility; and

               (3)  the  possession,  consumption,  use,  handling,  disposal or
                    transportation   of  fissionable   substances  or  of  other
                    radioactive material (except radioactive isotopes, away from
                    a nuclear  facility,  which have  reached the final stage of
                    fabrication so as to be usable for any  scientific,  medical
                    agricultural,   commercial  or  industrial   purpose)  used,
                    distributed, handled or sold by an Insured.

As used in this Policy:

               (I)  The term  "nuclear  energy  hazard"  means the  radioactive,
                    toxic,   explosive   or  other   hazardous   properties   of
                    radioactive material;

              (II)  The term  "radioactive  material"  means  uranium,  thorium,
                    plutonium,   neptunium,  their  respective  derivatives  and
                    compounds,  radioactive  isotopes of other  elements and any
                    other  substances  that the Stomic Energy Control Board may,
                    by  regulation,  designate  as being  prescribed  substances
                    capable of releasing  atomic energy,  or as being  requisite
                    for the production, use or application of atomic energy;

             (III) The term "nuclear facility" means:

                    (a)  any  apparatus  designed  or  used to  sustain  nuclear
                         fission  in a  self-supporting  chain  reaction  or  to
                         contain  a  critical  mass of  plutonium,  thorium  and
                         uranium or any one or more of them;

                     (b) any  equipment  or  device  designed  or  used  for (i)
                         separating  the  isotopes  of  plutonium,  thorium  and
                         uranium or any one or more of them,  (ii)  processing o
                         utilizing spent fuel, or (iii) handling,  processing or
                         packaging waste;


                     (c) any  equipment  or  device  used  for  the  processing,
                         fabricating  or  alloying  of  plutonium,   thorium  or
                         uranium  enriched in the isotope  uranium 233 or in the
                         isotope  uranium  235, or any one or more of them if at
                         any time  the  total  amount  of such  material  in the
                         custody  of the  Insured  at the  premises  where  such
                         equipment or device is located  consists of or contains
                         more than 25 grams of  plutonium  or uranium 233 or any
                         combination  thereof, or more than 250 grams of uranium
                         235;

                     (d) any  structure,  basin,  excavation  premises  or place
                         prepared  or used for the  storage or disposal of waste
                         radioactive material;

                     and  includes  the site on which  any of the  foregoing  is
                     located, together with all operations conducted thereon and
                     all premises used for such operations.

             (IV)    the  term  "fissionable  substance"  means  any  prescribed
                     substance  that  is,  or  from  which  can be  obtained,  a
                     substance  capable of  releasing  atomic  energy by nuclear
                     fission.

             (V)     with  respect  to  property,  loss of use of such  property
                     shall be deemed to be property damage.



<PAGE>


            NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) 1984
                      (WORLDWIDE EXCLUDING U.S.A. & CANADA)
            --------------------------------------------------------

This Agreement shall exclude Nuclear Energy Risks whether such risks are written
directly and/or by way of reinsurance and/or via Pools and/or Associations.

For all purposes of this agreement, Nuclear Energy Risks shall be defined as all
first party  and/or third party  insurances  (other than  Workers'  Compensation
and/or Employers' Liability) in respect of:

     (i)       nuclear reactors and nuclear power stations or plant

     (ii)      any other premises or facilities whatsoever related to or
               concerned with:
               (a)       the production of nuclear energy or
               (b)       the production or storage or handling of nuclear fuel
                         or nuclear wastes

     (iii)     any other  premises or  facilities  eligible for insurance by any
               local Nuclear Pool and/or  Association  but only to the extent of
               the requirements of the local Pool and/or  Association,  it being
               the intention always that Reinsurers shall follow the fortunes of
               the  Reinsured  insofar  as  the  Reinsured   complies  with  the
               requirements of any such local Pool and/or Association.

However, this Exclusion shall not apply

     (a)       to any insurance or reinsurance  in respect of the  construction,
               erection or installation  of buildings,  plant and other property
               (including  contractor's  plant and equipment  used in connection
               therewith)

               (i)         for the storage of nuclear fuel - prior to the
                           commencement of storage.

               (ii)        as  regards  reactor  installations  -  prior  to the
                           commencement  of  loading  of  nuclear  fuel into the
                           reactor,   or  prior  to  the  initial   criticality,
                           depending  on the  commencement  of the  insurance or
                           reinsurance of the relevant local Nuclear Pool and/or
                           Association.

     (b)       to any  Machinery  Breakdown  or other  Engineering  insurance or
               reinsurance  not  coming  within  the  scope  of (a)  above,  nor
               affording coverage in the "higher radioactivity" zone



<PAGE>


                     WAR RISK EXCLUSION CLAUSE (REINSURANCE)


                  As  regards  interests  which at time of loss or damage are on
         shore,  no  liability  shall  attach  hereto in  respect of 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.

                  This  War  Exclusion  Clause  shall  not,  however,  apply  to
         interest  which at time of loss or damage are  within  the  territorial
         limits of the United States of America  (comprising the fifty States of
         the  Union  and  the  District  of  Columbia,   its   territories   and
         possessions,  including the Panama Canal Zone and the  Commonwealth  of
         Puerto Rico and including  Bridges between the United States of America
         and Mexico  provided they are under United States  ownership),  Canada,
         St.  Pierre and  Miquelon,  provided  such  interests are insured under
         original policies, endorsements or binders containing a standard war or
         hostilities or warlike operations exclusion clause.

                  Nevertheless,  this clause  shall not be construed to apply to
         loss  or  damage  occasioned  by  riots,   strikes,   civil  commotion,
         vandalism,  malicious damage, including acts committed by agents of any
         government,  party or  faction  engaged  in war,  hostilities  or other
         warlike operation,  provided such agents are acting secretly and not in
         connection with any operations of military or naval armed forces in the
         country where the insured are situated.



<PAGE>


                        INSOLVENCY FUND EXCLUSION CLAUSE


         This Agreement  excludes all liability o the Ceding 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 guarantee 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  Ceding  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.


<PAGE>


                       INTERESTS AND LIABILITIES AGREEMENT
                                     to the
                                UNDERWRITING YEAR
                   AGGREGATE EXCESS OF LOSS REINSURANCE TREATY
                           Effective: January 1, 1998

                (hereinafter referred to as "Reinsurance Treaty")

                                     between

                          CHARTWELL REINSURANCE COMPANY
                              Stamford, Connecticut
                                       and
                       DAKOTA SPECIALTY INSURANCE COMPANY
                              Stamford, Connecticut
                                       and
                      THE INSURANCE CORPORATION OF NEW YORK
                                Jericho, New York
                                       and
                             DRAYTON COMPANY LIMITED
                                Hamilton, Bermuda
                                       and
                        CHARTWELL RE HOLDINGS CORPORATION
                              Stamford, Connecticut

           (hereinafter referred to collectively as "Ceding Company")

                                       and

                LONDON LIFE AND CASUALTY REINSURANCE CORPORATION
                       Wildey, St. Michael, Barbados, W.I.

                  (hereinafter referred to as the "Reinsurer")


It is hereby mutually agreed that the interests and liabilities of the companies
referred to herein  collectively as the Ceding Company,  arising under the terms
and conditions of the Treaty,  are joint and not several.  It is agreed that all
communications  and  payments  to  or  from  the  Ceding  Company  may  be  made
respectively  to or  from  Chartwell  Reinsurance  Company,  which  will  act as
paymaster and agent for all transactions and communications under this Treaty.

It is hereby mutually agreed that the Reinsurer shall have a 75.00% share in the
interests and liabilities as set forth in the captioned Reinsurance Contract and
Addendum No.1  attaching to and forming part of the  Reinsurance  Contract.  The
share of the Reinsurer  shall be separate and apart from the shares of the other
reinsurers  and  shall  not be joint  with  those of the  other  reinsurers  and
Reinsurer shall in no event  participate in the interests and liabilities of the
other reinsurers.


<PAGE>




In Witness Whereof, the parties hereto, by their duly authorized officers,  have
executed this Agreement, in triplicate, as of the dates undermentioned.

                                              In Stamford, Connecticut, this
                                              1st day of October, 1998,

for and on behalf of Chartwell Reinsurance Company,  Dakota  Specialty Insurance
Company,  The Insurance  Corporation  of New York, Drayton Company Limited and 
Chartwell Re Holdings Corporation

By: /s/ Peter W. Wildman
    --------------------------------                                            
        Peter W. Wildman


Title:  Senior Vice President
    --------------------------------




                                              In Wildey, St. Michael,
                                              Barbados, W.I., this 4th day of
                                              September, 1998

for and on behalf of London Life and Casualty Reinsurance Corporation


By: /s/ John F. Cartwright
    --------------------------------                                          
        John F. Cartwright

Title: President
     -------------------------------                                            


<PAGE>


                       INTERESTS AND LIABILITIES AGREEMENT
                                     to the
                                UNDERWRITING YEAR
                   AGGREGATE EXCESS OF LOSS REINSURANCE TREATY
                           Effective: January 1, 1998

                (hereinafter referred to as "Reinsurance Treaty")

                                     between

                          CHARTWELL REINSURANCE COMPANY
                              Stamford, Connecticut
                                       and
                       DAKOTA SPECIALTY INSURANCE COMPANY
                              Stamford, Connecticut
                                       and
                      THE INSURANCE CORPORATION OF NEW YORK
                                Jericho, New York
                                       and
                             DRAYTON COMPANY LIMITED
                                Hamilton, Bermuda
                                       and
                        CHARTWELL RE HOLDINGS CORPORATION
                              Stamford, Connecticut

           (hereinafter referred to collectively as "Ceding Company")

                                       and

                         WESTERN GENERAL INSURANCE LTD.
                                Hamilton, Bermuda

                  (hereinafter referred to as the "Reinsurer")


It is hereby mutually agreed that the interests and liabilities of the companies
referred to herein  collectively as the Ceding Company,  arising under the terms
and conditions of the Treaty,  are joint and not several.  It is agreed that all
communications  and  payments  to  or  from  the  Ceding  Company  may  be  made
respectively  to or  from  Chartwell  Reinsurance  Company,  which  will  act as
paymaster and agent for all transactions and communications under this Treaty.

It is hereby mutually agreed that the Reinsurer shall have a 25.00% share in the
interests and liabilities as set forth in the captioned Reinsurance Contract and
Addendum No.1  attaching to and forming part of the  Reinsurance  Contract.  The
share of the Reinsurer  shall be separate and apart from the shares of the other
reinsurers  and  shall  not be joint  with  those of the  other  reinsurers  and
Reinsurer shall in no event  participate in the interests and liabilities of the
other reinsurers.


<PAGE>




In Witness Whereof, the parties hereto, by their duly authorized officers,  have
executed this Agreement, in triplicate, as of the dates undermentioned.

                                              In Stamford, Connecticut, this 
                                              1st day of October, 1998,

for and on  behalf of Chartwell Reinsurance Company, Dakota Specialty Insurance
Company, The Insurance Corporation of New York, Drayton Company Limited and 
Chartwell Re Holdings Corporation

By: /s/ Peter W. Wildman
   ---------------------------------
        Peter W. Wildman                                                        

Title:  Senior Vice President
     -------------------------------



                                              In Hamilton, Bermuda, this 1st
                                              day of September, 1998,

for and on behalf of Western General Insurance Ltd.

By:  /s/ John L. Marion
   ---------------------------------
         John L. Marion


Title: President & Managing Director
     -------------------------------