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                                                                   Exhibit 10.18



                      ANNUITY AND LIFE RE (HOLDINGS), LTD.

                              EMPLOYMENT AGREEMENT


     THIS AGREEMENT, dated as of July 1, 1999 by and between Annuity & Life Re
(Holdings), Ltd., a Bermudian corporation (the "Company", Annuity & Life Re
America, Inc., a subsidiary of the Company organized under the laws of the
United States to engage in life and annuity reinsurance (the "Operating
Company"), and Bryan Featherstone (hereinafter called the "Employee").

                             W I T N E S S E T H:

     WHEREAS, the Company and the Operating Company desire that the Employee
serve as President of the Operating Company and the Employee is willing to serve
in such capacities; and

     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the parties hereto agree as follows:

Section: 1.         Employment

     Effective as of August 1, 1999, the Operating Company will employ the
Employee and the Employee will perform services for the Operating Company on the
terms and conditions set forth in this Agreement and for the period ("Term of
Employment") specified in Section 3 hereof. This Agreement may be terminated at
any time during its initial term or during any renewal term solely in accordance
with the terms and conditions of Section 11 hereof.

Section: 2.         Duties

     The Employee, during the Term of Employment, shall serve the Operating
Company as President. The employee shall be based at the Operating Company's
headquarters in Connecticut, other than for periodic travel in the ordinary
course of business. The Employee shall have such duties and responsibilities as
are assigned to him by the Boards of Directors of the Operating Company
commensurate with his position as President of the Operating Company.

     The Employee shall perform his duties hereunder faithfully and to the best
of his abilities and in furtherance of the business of the Operating Company,
and shall devote his full business time, energy, attention and skill to the
business of the Operating Company and to the promotion of its interests except
as otherwise agreed by the Operating Company.

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     The Employee warrants and represents that he is free to enter into this
Agreement and is not restricted by any prior or existing agreement and the
Company and the Operating Company may rely on such representation in entering
into this Agreement.

Section: 3.     Term of Employment

     The initial Term of Employment of this Agreement shall be three years
commencing on August 1, 1999. At the end of the initial Term of Employment, and
on each anniversary thereof, the Term of Employment shall automatically be
extended for one additional year, unless the Operating Company or the Employee
shall have given written notice to the other that it does not wish to extend
this Agreement at least three months in advance.

Section: 4.    Salary

     The Employee shall receive as compensation for his duties and obligations
to the Operating Company, a salary at the annual rate of $250,000, payable in
substantially equal installments in accordance with the Operating Company's
payroll practice. It is agreed between the parties that the Operating Company
shall review the base annual salary annually and in light of such review may in
the discretion of the Board of Directors of the Operating Company (but shall not
be obligated to), increase such base annual salary taking into account any
change in the Employee's then responsibilities, increases in the cost of living,
performance by the Employee, and other pertinent factors.

Section: 5.    Bonus

     During the Term of Employment, the Employee shall participate in the
Company's Incentive Compensation Plan, and will be eligible for an annual cash
bonus of up to two times his annual salary based on performance targets as
determined in accordance with the terms of the Plan.

Section: 6.    Options

          (a)  Initial Options.    The Company shall grant to the Employee the
right and option to purchase all or any part of an aggregate of 30,000 common
shares at a price determined by the Company's Compensation Committee.
Thirty-three and one-thirds percent (33 1/3%) of the Initial Options shall
become exercisable after the first anniversary of the Grant. 33 1/3% of the
Options shall become exercisable after the second anniversary of the Grant, and
an additional 33 1/3% of the Options shall become exercisable after the third
anniversary thereof. In addition, no Option may be exercised after the earlier
of (A) the date that is (i) ninety (90) days following the termination of the
Employee's employment for any reason other than death, disability or Serious
Cause (as defined in Section 11), or (ii) six (6) months after the termination
of the


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Employee's employment by reason of death or disability or (iii) the date upon
which the Employee's employment is terminated for Serious Cause or (By the
tenth anniversary of the Grant date.

     The consideration for the Ordinary Shares purchased upon exercise of the
Initial Options may be paid in cash or by any other method permitted by the
terms of the Company's Initial Option Plan. The issuance of any Ordinary Shares
pursuant to the Initial Options shall in all events be subject to all applicable
securities laws and the Employee shall enter into any agreement reasonably
requested by the Company in order to ensure that all such issuances are in full
compliance therewith. The Employee shall not have any of the rights and
privileges of a shareholder of the Company with respect to the Ordinary Shares
issuable upon any exercise of Initial Options unless and until his name is
entered into the register of members of the Company in respect of such Ordinary
Shares. If there is any change in the number or nature of outstanding shares of
the Company's capital stock by reason of a share dividend, recapitalization,
merger, consolidation, scheme or arrangement, share split, combination or
exchange, share repurchase or otherwise, which in any such case has a dilutive
or anti-dilutive effect on the Ordinary Shares, the number of Ordinary Shares
subject to each outstanding Initial Option, the exercise price thereof and/or
other terms thereof shall be appropriately adjusted by the Board of Directors of
the Company (or any committee thereof), whose determination shall be conclusive,
so as to restore the option holder to his rights thereunder.

     (b)  Other Options.  During the Term of Employment, the Employee shall be
eligible to be granted options (in addition to the Initial Options) to purchase
Ordinary Shares at such price and subject to such terms as provided by the
Company's Initial Stock Option Plan, in the sole discretion of the Board of
Directors of the Company.

Section: 7.  Employee Benefits

     During the Term of Employment the Employee shall be entitled to participate
in all employee benefit programs of the Operating Company, as such programs may
be in effect from time to time, including without limitation, pension and other
retirement plans, profit sharing plans, group life insurance, accidental death
and dismemberment insurance, hospitalization, surgical and major medical
coverage, sick leave (including salary continuation arrangements), long term
disability, holidays and vacations. The Operating Company shall contribute
monthly ten percent of the base monthly salary of the employee to a retirement
plan for the benefit of the Employee.

Section: 8.  Business Expenses

     All reasonable travel and other expenses incidental to the rendering of
services by the Employee hereunder shall be paid by the Operating Company

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and if expenses are paid in the first instance by the Employee, the Operating
Company will reimburse him therefor upon presentation of proper invoices;
subject in each case to compliance with the Operating Company's reasonable
reimbursement policies and procedures.

Section 9.     Vacations

     The Employee shall be entitled to reasonable vacation and reasonable sick
leave each year (beginning with 1999), in accordance with policies of the
Operating Company, as determined by the Board of Directors, provided, however,
that the Employee shall be entitled to a minimum of four (4) weeks vacation per
year.

Section 10.    Termination

          (a)  In the event of Serious Cause as defined below, the Operating
Company may terminate the Employee's employment and the Term of Employment upon
written notice of such termination stating the Serious Cause upon which the
Operating Company relies for its termination. The Employee's employment and the
Term of Employment shall be terminated effective as of the date specified in
such notice, which shall in no event be earlier than the effective date of such
notice as provided in Section 19.

     "Serious Cause" shall mean (i) the willful and continued failure by the
Employee to perform substantially his duties hereunder, other than by reasons
of health after written demand for substantial performance is delivered by the
Company that identifies the manner in which the Operating Company believes the
Employee has not substantially performed his duties, (ii) the Employee shall
have been indicted by any federal, state or local authority in any jurisdiction
for, or shall have pleaded guilty or nolo contendre to, an act constituting a
felony, (iii) the Employee shall have habitually abused any substance (such as
narcotics or alcohol), or (iv) the Employee shall have (A) engaged in acts of
fraud, material dishonesty or gross misconduct in connection with the business
of the Operating Company of (B) committed a material breach of this Agreement.

     (b)  The Employee may terminate his employment and the Term of his
Employment in the event of Good Reason, as defined below, upon 30 days' prior
written notice of such termination stating the Good Reason upon which the
Employee relies for his termination. The Employee's employment and the Term of
Employment shall be terminated effective as of the date specified in such
notice, which in no event shall be earlier than the effective date of such
notice as provided in Section 19.

     "Good Reason" shall mean (i) a substantial reduction in the Employee's
salary or benefits, (ii) the demotion of the Employee, (iii) a material
reduction of the Employee's duties or responsibilities hereunder, (iv) a
material breach of this

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Agreement by the Operating Company, or (v) the occurrence of any action taken
by the Operating Company that would constitute a constructive termination of
the Employee's employment.

     (c) In the event of termination of the Employee's employment and the
Term of Employment by the Operating Company for Serious Cause or by the Employee
without Good Reason, the Employee shall forfeit all bonus amounts for the then
current fiscal year, and the Operating Company shall be liable to the Employee
only for (i) any accrued but unpaid salary, (ii) any accrued but unpaid bonus
from a prior fiscal year, and (iii) reimbursement of business expenses incurred
prior to the date of termination.

     (d) In the event of the death, retirement or disability of the Employee,
the Employee's employment and Term of Employment shall be terminated as of the
date of such death, retirement or disability and the Operating Company shall
pay the Employee, or the Employee's estate or legal representative, as
appropriate, (i) any accrued but unpaid salary, (ii) any earned but unpaid
bonus from a prior fiscal year, and (iii) reimbursement of business expenses
incurred prior to the date of termination. The date of the Employee's
disability shall be deemed to be the last day of the sixth month during which
the Employee has been unable to carry out his position as provided below.

     "Disability" shall mean the Employees inability, for reasons of health, to
carry out the functions of his position for a total of six (6) months during
any 12-month period of this Agreement. "Retirement" shall mean retirement from
employment upon attaining age 65 or such earlier age agreed to by the Operating
Company.

     In addition, in such event, if the Company's Ordinary Shares are not then
publicly traded, the Company shall have the right to call any or all of the
Ordinary Shares of the Company owned by the Employee within six (6) months after
death, retirement or disability, and the Employee, the Employee's estate or
legal representative, whichever is appropriate, shall have the right to put any
or all of the Employee's Ordinary Shares to the Company within twelve (12)
months after death or within six (6) months after retirement or disability. The
price at which such put or call is exercisable shall be equal to the appraised
value, in each case measured as of the date of termination.

     (e)  If the Operating Company should (i) terminate the Term of Employment
and the Employee's employment herein without Serious Cause, or (ii) if the
Employee should terminate the Term of Employment and his employment hereunder
for Good Reason, the Operating Company shall continue to pay the Employee his
base salary for a period of one year from such termination. In addition, the
Employee shall be entitled to (A) any accrued but unpaid salary, (B) any earned
but unpaid bonus from a prior fiscal year, and (C) reimbursement of business
expenses incurred prior to the date of termination.


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     (f) In the event of the liquidation of the Operating Company or in the
event that the Board of Directors elects to discontinue permanently operating
the Operating Company, the Term of Employment and the Employee's employment
herein shall be terminated as of the date of such liquidation or discontinuance
and the Operating Company shall pay the Employee (i) any accrued but unpaid
salary, (ii) any earned but unpaid bonus from a prior fiscal year and (iii)
unreimbursed business expenses incurred prior to the date of termination. In
addition, the Employee shall be entitled to receive one year's base salary from
the date on which the Employee's employment is terminated.

Section: 11. Change of Control

     (a) Notwithstanding any other provision contained herein, the Employee's
Initial Options and other options issued under the Company's share option plans
that are not then exercisable shall become exercisable (and be deemed to be
vested) on the date on which a Change of Control of the Company occurs. In
addition, restricted Ordinary Shares granted under any of the Company's share
option plans shall immediately vest upon a Change of Control of the Company.

     (b) If (i) the employment of the Employee is terminated by the Operating
Company (or successor thereto) without Serious Cause or (ii) the Employee
terminates employment with the Operating Company (or successor thereto) for Good
Reason or because of the failure of a successor to the Operating Company to
expressly assume and agree to perform this Agreement, within the period
commencing on the date that a Change of Control is formally proposed to the
Company's Board of Directors and ending on the first anniversary of the date on
which such Change of Control occurs, then the Employee shall be entitled to
receive (in lieu of the benefits described in Section 10): (1) any accrued but
unpaid salary, (2) a lump sum payment equal to two times such Employee's annual
base salary as of the date of termination, (3) any accrued but unpaid bonus from
a prior fiscal year, and (4) reimbursement of business expenses incurred prior
to the date of termination.

     The Employee shall not be entitled to any benefits or other entitlements
under this section unless a Change of Control actually occurs.

     (c) A "Change of Control" of the Company shall be deemed to have occurred
if (i) any "person" (as such term is defined in Section 3(a)(9) and as used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"), excluding the Company or any of its subsidiaries, a trustee or any
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries, an underwriter temporarily holding securities pursuant
to an offering of such securities or a corporation owned, directly or
indirectly, by shareholders of the Company in substantially the same proportion
as their ownership of the Company, is or becomes the "beneficial owner" (as
defined in



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rule 13d-3 under the Exchange Act), directly or indirectly, of securities
("Voting Securities"); (ii) during any period of not more than two years,
individuals who constitute the Board of Directors of the Company (the "Board")
as of the beginning of the period and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (i) or (iii) of this sentence) whose
election by the Board or nomination for election by the Company's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at such time or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; (iii) the shareholders of the Company approve a
merger, consolidation or reorganization or a court of competent jurisdiction
approves a scheme of arrangement of the Company, other than a merger,
consolidation, reorganization or scheme of arrangement which would result in
the Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 50% of the combined
voting power of the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger, consolidation, reorganization or
scheme of arrangement; or (iv) the shareholders of the Company approve a plan
of complete liquidation of the Company or any agreement for the sale of
substantially all of the Company's assets.

Section: 12.   Agreement Not to Compete

     (a) The Employee hereby covenants and agrees that at no time during the
Term of Employment nor for a period of (i) one year immediately following the
termination of the Employee's employment by the Operating Company without
Serious Cause or by the Employee for Good Reason or in the event of the
liquidation of the Operating Company or in the event the Board of Directors
elect to discontinue permanently operating the Operating Company or (ii) two
years following the termination of the Employee's employment for any other
reason, will he for himself or on behalf of any other person, partnership,
company or corporation, directly or indirectly, acquire any financial or
beneficial interest in (except as provided in the next sentence) any entity
engaged in any business directly competitive to the business engaged in by the
Company or the Operating Company at the time of such termination of employment.
Notwithstanding the preceding sentence, the Employee shall not be prohibited
from owning less than one (1%) percent of any publicly traded corporation,
whether or not such corporation is in competition with the Company or the
Operating Company. Additionally, the Employee will not become employed by any
non-United States entity engaged in a directly competitive business.
Furthermore, the employee will not enter into competition with the Company or
Operating Company for a period of two years following termination. For purposes
of this Employment Agreement, "competition" will mean soliciting reinsurance
business from any clients of the Company and/or Operating Company. Clients of
the Company

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and/or Operating Company are those companies for whom the Company and/or
Operating Company has reinsured business during the Employee's period of
employment under this agreement.

     (b) The Employee hereby covenants and agrees that, at all times during the
Term of Employment and for a period of two years immediately following the
termination thereof, the Employee shall not directly or indirectly employ or
seek to employ any person or entity employed at that time by the Company or any
of its subsidiaries, or otherwise encourage or entice such person or entity to
leave such employment.

Section 13.    Confidential Information

     (a) The Employee agrees to keep secret and retain in the strictest
confidence all confidential matters which relate to the Company or any
affiliate of the Company, including, without limitation, customer lists, client
lists, trade secrets, pricing policies and other business affairs of the
Company and any affiliate of the Company learned by him from the Company or
any such affiliate or otherwise before or after the date of this Agreement, and
not to disclose any such confidential matter to anyone outside the Company or
any of its affiliates, whether during or after his period of service with the
Company, except as may be required in the course of a legal or governmental
proceeding. Upon request by the Company the Employee agrees to deliver promptly
to the Company upon termination of his services for the Company, or at any time
thereafter as the Company may request, all Company or affiliate memoranda,
notes, records, reports, manuals, drawings, designs, computer files in any
media and other documents (and all copies thereof) relating to the Company's or
any affiliate's business and all property of the Company or any affiliate
associated therewith, which he may then possess or have under his control.

Section: 14.   Remedy

     (a) Should the Employee engage in or perform, either directly or
indirectly, and of the acts prohibited by Sections 13 or 14 hereof, it is
agreed that the Operating Company shall be entitled to full injunctive relief,
to be issued by any competent court of equity, enjoining and restraining the
Employee and each and every other person, firm, organization, association, or
corporation concerned therein, from the continuance of such violative acts. The
foregoing remedy available to the Operating Company shall not be deemed to
limit or prevent the exercise by the Company of any or all further rights and
remedies which may be available to the Company hereunder or at law or in equity.

     (b) The Employee acknowledges and agrees that the covenants contained in
this Agreement are fair and reasonable in light of the consideration paid
hereunder, and the invalidity or unenforceability of any particular provision,
or part of any provision, of this Agreement shall not affect the other
provisions or

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parts hereof. If any provision hereof is determined to be invalid or
unenforceable by a court of competent jurisdiction, the Employee shall
negotiate in good faith to provide the Operating Company with protection as
nearly equivalent to that found to be invalid or unenforceable and if any such
provision shall be so determined to be invalid or unenforceable by reason of
the duration or geographic scope of the covenants contained therein, such
duration or geographical scope, or both, shall be considered to be reduced to a
duration or geographical scope to the extent necessary to cure such invalidity.

Section: 15.    Successors and Assigns

     This Agreement shall be binding upon and inure to the benefit of the
Employee, his heirs, executors, administrators and beneficiaries, and the
Company, the Operating Company and their successors and assigns.

Section: 16.   Governing Law

     This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Connecticut without reference to rules
relating to conflicts of law.

Section: 17.   Entire Agreement

     This Agreement constitutes the full and complete understanding and
agreement of the parties and supersedes all prior understandings and agreements
as to employment of the Employee. This Agreement cannot be amended, changed,
modified or terminated without the written consent of the parties hereto.

Section: 18.   Waiver of Breach

     The waiver by either party of a breach of any term of this Agreement shall
not operate nor be construed as a waiver of any subsequent breach thereof.

Section: 19.   Notices

     Any notice, report, request or other communication given under this
Agreement shall be written and shall be effective upon delivery when delivered
personally, by Federal Express or by fax.

     Unless otherwise notified by any of the parties, notices shall be sent to
the parties as follows:

     To Employee:             Bryan Featherstone
                              68 Portage Crossing
                              Farmington, CT 06032

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     To the Company           Annuity & Life Reassurance, Ltd.
                              Cumberland House
                              PO Box HM 98
                              Hamilton, HM AX, Bermuda


Section: 20.   Severability

     If any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

Section: 21.   Counterparts

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as on
the day and year first above written.



                              /s/ Bryan Featherstone
                              ------------------------------------
                              Bryan Featherstone


                              Annuity & Life Re (Holdings), Ltd.


                              By: /s/ Lawrence S. Doyle, CEO
                                  --------------------------------
                                  Lawrence S. Doyle


                              Annuity & Life Reassurance, Ltd.


                              By: /s/ Lawrence S. Doyle, CEO
                                  --------------------------------
                                  Lawrence S. Doyle


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