Exhibit 10(xxvi)










                         PURCHASE AGREEMENT


                           BY AND BETWEEN

                        SUN ALLIANCE USA INC.

                                AND

                      ORION CAPITAL CORPORATION










                       Dated as of June 30, 1995





















<PAGE>
                           TABLE OF CONTENTS

                                                          Page
                                                          -----

I.   THE TRANSACTION . . . . . . . . . . . . . . . . .       1 

     1.1   Purchase of Common Stock  . . . . . . . . .       1

     1.2   Consideration  . . . . . . . . . . . . . .        1

II.  THE CLOSING   . . . . . . . . . . . . . . . . . .       2

     2.1   Closing . . . . . . . . . . . . . . . . . .       2

III. REPRESENTATIONS AND WARRANTIES OF SUN . . . . . .       2

     3.1     Organization and Good Standing. . . . . .       2

     3.2     Capitalization . . . . . . . . . . . . . .      3

     3.3     Regulatory Status . . . . . . . . . . . .       4

     3.4     Authorization . . . . . . . . . . . . . .       4

     3.5     Books and Records . . . . . . . . . . . .       5

     3.6     No Adverse Change . . . . . . . . . . . .       5

     3.7     Litigation and Other Proceedings . . . .        5

     3.8     Title to Properties . . . . . . . . . . .       6

     3.9     No Materially Adverse Agreements . . . .        7

     3.10    No Conflicts . . . . . . . . . . . . . .        8

     3.11    Taxes . . . . . . . . . . . . . . . . . .       9

     3.12    Investments . . . . . . . . . . . . . . .      12

     3.13    Employment Matters . . . . . . . . . . .       12

     3.14    Employee Benefit Plans; ERISA . . . . . .      13

     3.15    Contracts . . . . . . . . . . . . . . . .      17

 
                                    - i -





<PAGE>
     

     3.16    Capital Expenditures . . . . . . . . . .       18

     3.17    Banks . . . . . . . . . . . . . . . . . .      18

     3.18    Agents and Brokers . . . . . . . . . . .       18

     3.19    Approved Forms of Policies . . . . . . .       18

     3.20    Insurance . . . . . . . . . . . . . . . .      19

     3.21    Absence of Material Changes and
             Adverse Factors . . . . . . . . . . . . .      19

     3.22    Environmental Matters . . . . . . . . . .      19

     3.23    Finders and Brokers . . . . . . . . . . .      20

     3.24    Disclosure . . . . . . . . . . . . . . . .     21

     3.25    Canadian Bank Act . . . . . . . . . . . .      21

IV.  REPRESENTATIONS, WARRANTIES AND
      AGREEMENTS OF ORION . . . . . . . . . . . . . . .     21

     4.1     Organization and Standing . . . . . . . .      21

     4.2     Certificate of Incorporation and . . . . .     21
              By-Laws                                             
                                                                  
     4.3     Authority . . . . . . . . . . . . . . . .      21

     4.4     Finders and Brokers . . . . . . . . . . .      22

     4.5     Investor Status . . . . . . . . . . . . .      22

     4.6     Bank or Banking Institutions . . . . . . .     22

V.  COVENANTS OF ORION AND SUN . . . . . . . . . . . .     23

     5.1     Access to Properties, Books and 
             Records .  . . . . . . . . . . . . . . .       23

     5.2     Conduct of Business . . . . . . . . . . .      23

  
                               - ii -






<PAGE>

  
     5.3     Regulatory and Other Filings and 
             Approvals  . . . . . . . . . . . . . . . .     27

     5.4     Premerger Notification and Clearance . . .     27

     5.5     Bermuda Company  . . . . . . . . . . . . .     28

     5.6     Further Assurances . . . . . . . . . . . .     29

     5.7     Pension Plan Matters . . . . . . . . . . .     29

     5.8     Tax Matters  . . . . . . . . . . . . . . .     31


VI.  AGREEMENTS WITH RESPECT
     TO POOL OPERATION  . . . . . . . . . . . . . . . .     36

     6.1     Pool Participations; Reinsurance . . . . .     36

     6.2     Underwriting Operations of the Pool  . . .     39

VII. CONDITIONS TO OBLIGATIONS OF ORION   . . . . . . .     43

     7.1     Covenants  . . . . . . . . . . . . . . . .     43

     7.2     Representations and Warranties . . . . . .     43

     7.3     Absence of Litigation and Required
             Regulatory Approvals . . . . . . . . . . .     43

     7.4     Premerger Notification . . . . . . . . . .     44

     7.5     No Material Adverse Effect . . . . . . . .     44

     7.6     Employment and Consulting Agreements . . .     44

     7.7     Management and Reinsurance Agreements . . .    44

     7.8     Unfair Competition and Confidentiality
             Agreements   . . . . . . . . . . . . . . .     44

     7.9     Opinion of Counsel for Sun and McGee . . .     45



                               - iii -





<PAGE>

VIII.  CONDITIONS TO OBLIGATIONS OF SUN . . . . .  .  .     45

     8.1     Covenants   . . . . . . . . . . . . . . .      45

     8.2     Representations and Warranties   . . . . .     45

     8.3     Absence of Litigation and Required
             Regulatory Approvals     . . . . . . . . .     45

     8.4     Premerger Notification  . . . . . . . . .      46

     8.5     Management and Reinsurance Agreements . .      46

     8.6     Opinion of Counsel for Orion   . . . . . .     46

IX.  TERMINATION   . . . . . . . . . . . . . . . . . .      46

     9.1     Termination . . . . . . . . . . . . . . .      46

     9.2     Effect of Termination . . . . . . . . . .      47

     9.3     Conduct Following Termination . . . . . .      47

  X. AMENDMENT; WAIVERS . . . . . . . . . . . . . . . .     47

     10.1    Amendments, Modifications, Etc.  . . . . .     47

     10.2    Waivers  . . . . . . . . . . . . . . . . .     48

XI.  DEFINED TERMS  . . . . . . . . . . . . . . . . . .     48

XII. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . .     52

     12.1    Expenses   . . . . . . . . . . . . . . . .     52

     12.2    Notices    . . . . . . . . . . . . . . . .     52

     12.3    Entire Agreement   . . . . . . . . . . . .     53

     12.4    No Assignment  . . . . . . . . . . . . . .     53

     12.5    Survival of Representations and
             Warranties and Covenants   . . . . . . . .     54


                               - iv -







<PAGE>
     
     12.6    Governing Law  . . . . . . . . . . . . . .     54

     12.7    Dispute Resolution   . . . . . . . . . . .     54

     12.8    Press Releases   . . . . . . . . . . . . .     55

     12.9    Counterparts   . . . . . . . . . . . . . .     55

     12.10   Headings   . . . . . . . . . . . . . . . .     55

EXHIBITS
--------


     Exhibit A   - Bermuda Management Agreement

     Exhibit B   - Quota Share Retrocession Agreement
                   in Respect of Period From
                   January 1, 1995 to December 31, 1995

     Exhibit C   - Pool Management Agreement

     Exhibit D   - Option Agreement in Respect of
                   Sun Bermuda

     Exhibit E-1 - Employment Continuation Agreement 

     Exhibit E-2 - Consulting Agreement

     Exhibit F   - Agreement With Respect To 
                   Confidentiality and Competition 

SCHEDULES
---------

     Schedule 3.2   Capitalization of McGee and Subsidiaries

     Schedule 3.7   Litigation and Other Proceedings

     Schedule 3.8   Properties of McGee

     Schedule 3.10  Consents and Approvals of Sun

     Schedule 3.12  Investments

     Schedule 3.13  Employment Matters




                                    - v -





<PAGE>

     Schedule 3.14  ERISA

     Schedule 3.15  Contracts

     Schedule 3.16  Capital Expenditures

     Schedule 3.17  Banks

     Schedule 3.18  Agents and Brokers

     Schedule 3.20  Insurance

     Schedule 4.3   Consents and Approvals of Orion

     Schedule 5.2   Conduct of Business

     Schedule 6.2   Business Plan Outline

     Schedule 11    Syndicates






















                                - vi -











<PAGE>


           AGREEMENT (the "Agreement"), dated June 30, 1995, by and
between ORION CAPITAL CORPORATION, a Delaware corporation
("Orion"), as purchaser, and SUN ALLIANCE USA INC., a New York
corporation ("Sun") as seller, 

                           W I T N E S S E T H:
                           - - - - - - - - - -
 

          WHEREAS, Sun is the direct or indirect owner of 100% of
the outstanding shares of capital stock of each of Phoenix
Assurance Company of New York, a New Hampshire corporation
("Phoenix") and  Marine Indemnity Insurance Company of America, a
New York corporation ("Marine"); and

          WHEREAS, Sun Alliance Insurance Overseas Limited, an
affiliate of Sun, owns 100% of the capital stock of The London
Assurance, an English corporation, the Canadian Branch of which is
hereinafter referred to as "London"; and

          WHEREAS, Wm. H. McGee & Co., Inc. ("McGee") is a
corporation duly organized and validly existing under the laws of
the State of New York, having outstanding capital stock consisting
of 4,400 shares of common stock, without par value (the "Common
Stock"); and

          WHEREAS, Sun and Phoenix own in the aggregate 100% of the
Common Stock, all of which is to be sold to and purchased by Orion
pursuant hereto;

          NOW, THEREFORE, the parties hereto agree as follows,
intending that defined terms used herein shall have the meanings
set forth in Article XI:

                                I.

                         THE TRANSACTION
                         ----------------

          Section 0.1   PURCHASE OF COMMON STOCK.  Upon the terms
and subject to all of the conditions set forth herein, Sun agrees
to sell, and to cause Phoenix to sell, to Orion and Orion agrees to
acquire from Sun and Phoenix on the Closing Date 100% of the Common
Stock.


                              







<PAGE>
          Section 0.2   CONSIDERATION.  In full consideration for
the sale of the Common Stock by Sun and Phoenix to Orion provided
for herein, together with the other undertakings and commitments
made and delivered by Sun to Orion herein, at the Closing Orion
shall deliver to Sun the sum of Seventeen Million and 00/100
($17,000,000.00) Dollars in immediately available funds and shall
deliver to Phoenix the sum of Five Million and 00/100 ($5,000,000)
Dollars in immediately available funds.

                               II.

                           THE CLOSING
                           ------------


          Section 1.1   CLOSING.  The closing of the transactions
provided for herein (the "Closing") shall occur at the offices of
Sun at 10 East 50th Street in New York City or at such other place
as shall be determined by Orion and Sun, on June 30, 1995;
provided, however, that if any of the conditions provided for in
Articles VII and VIII hereof shall not have been met or waived by
Sun or by Orion, as the case may be, by the scheduled Closing, then
the party which is unable to meet such condition or conditions
shall be entitled to postpone the Closing by notice to the other
party to such effect until such condition or conditions shall have
been met (which such party will seek to cause to happen at the
earliest practicable date) or waived (such postponed Closing to be
held on five business days notice from the postponing party to the
other party), but in no event shall such postponements extend past
August 15, 1995.  At the Closing, Sun and Orion shall deliver, or
cause to be delivered, to the other such certificates, receipts or
other documents or instruments, in addition to those specifically
provided for herein, as may reasonably be requested by the other
and as are customary for transactions of the type contemplated
hereunder.  The date on which the Closing occurs is hereinafter
referred to as the "Closing Date."

                              III.  

                 REPRESENTATIONS AND WARRANTIES OF SUN
                 --------------------------------------
 

          Sun represents and warrants to Orion that:

          2.1  ORGANIZATION AND GOOD STANDING.  McGee is a
corporation duly organized and existing and in good standing under
the laws of the State of New York, has the corporate power to carry

                                - 2 -






<PAGE>
on its business as it is now being conducted and is duly qualified
to do business as a foreign corporation in each jurisdiction in
which such qualification is required and where the failure so to
qualify would have a material adverse effect on the business,
properties or financial condition of McGee and its Subsidiaries
taken as a whole or the ability of any of them to carry on the
business of the Pool (a "Material Adverse Effect").  Each
Subsidiary of McGee is a corporation duly organized and existing
and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power to carry on its business
as it is now being conducted and is duly qualified to do business
as a foreign corporation in each jurisdiction in which such
qualification is required and where the failure so to qualify would
have a Material Adverse Effect.  To Sun's Knowledge,  Sun has
heretofore made available to Orion true and complete copies of (a)
the Certificate of Incorporation and By-laws of McGee and each of
its Subsidiaries, (b) all minutes of the meetings and copies of
resolutions of stockholders, the board of directors and each
committee of the board of directors of McGee and each of its
Subsidiaries held since the date of its incorporation or
organization and (c) all powers of attorney, if any, issued by
McGee or any of its Subsidiaries.  

          Section 2.2  CAPITALIZATION.  McGee has an authorized
capital stock consisting of 11,000 shares of Common Stock, without
par value, of which, as of the date hereof, 4,400 shares are issued
and outstanding.  No shares of McGee Common Stock are held in
treasury.  All of the issued and outstanding stock of McGee is duly
authorized, validly issued, fully paid and non-assessable and is
owned by Sun and Phoenix as set forth in Schedule 3.2 hereto, free
and clear (except as otherwise shown on Schedule 3.2) of any and
all claims, liens, restrictions, pledges, charges, rights of third
parties or other encumbrances.  Neither Sun nor McGee is a party to
or is bound by any agreement or has since September 8, 1987 (i)
made any commitment to sell or issue any securities of McGee other
than the Common Stock which is the subject of this Agreement, or
(ii) taken any corporate action to approve, or in contemplation of,
any of the foregoing except for the approval of this Agreement. 
Holders of Common Stock have no preemptive rights and the Common
Stock is subject to no voting trust, proxy or similar agreement. 
Schedule 3.2 correctly identifies each of McGee's Subsidiaries, its
jurisdiction of incorporation and the percentage of its voting
stock owned by McGee and each other Subsidiary.  McGee is the legal
and beneficial owner of all of the shares of voting stock it
purports to own of each Subsidiary of McGee, and such ownership is



                                - 3 -





<PAGE>
 free and clear (except as otherwise shown on Schedule 3.2) of any
and all claims, liens, restrictions, pledges, charges, rights of
third parties or other encumbrances.  All such shares have been
duly authorized, validly issued and are fully paid and
non-assessable.  No Subsidiary of McGee has any common or preferred
stock authorized or outstanding other than as set forth on Schedule
3.2 and neither McGee nor Sun nor any such Subsidiary is a party to
or is bound by any agreement or commitment to sell or issue any
securities of any Subsidiary of McGee or has taken any corporate
action to approve, or in contemplation of, any of the foregoing.  

          Section 2.3   REGULATORY STATUS.  To Sun's Knowledge,
McGee and each of its Subsidiaries has (and has caused each of its
officers and employees to have) all requisite power and authority,
and all necessary licenses, permits, franchises and other
governmental authorizations necessary to own and operate its
properties and to carry on its business as now conducted.  To Sun's
Knowledge, all filings required to have been made with any
insurance or other regulatory agency by McGee or any of its
Subsidiaries (whether on its own behalf or on behalf of the Pool)
have been properly prepared and duly and timely filed except where
the failure to have made such filings could not reasonably be
expected to have a Material Adverse Effect.  Such filings made
since January, 1990 have been delivered by Sun to Orion or made
available for inspection, or copies thereof have been sent by Sun
or made available to Orion.  Immediately after, and after giving
effect to, the execution and delivery of this Agreement, McGee and
each of its Subsidiaries will be in compliance with each law, rule,
regulation, ordinance, code, order, judgment and decree applicable
to it or affecting its business, property or financial affairs,
failure to comply with which could reasonably be expected to have
a Material Adverse Effect.

          Section 2.4  AUTHORIZATION.  (a) This Agreement has been
duly authorized by all necessary corporate action of Sun and
Phoenix.  Neither this Agreement nor any of the transactions
provided for herein violates any provision of the Certificate of
Incorporation or By-Laws of Sun or McGee or any Subsidiary of McGee
or any agreement by which any of them or any of their respective
properties is bound.  This Agreement will, when duly executed and
delivered, be a valid and binding agreement of Sun, enforceable
against Sun in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors'


                                - 4 -







<PAGE>

rights generally, and except that the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the equitable discretion of
the court before which any proceeding therefor may be brought.

          (b)  Each of the Ancillary Agreements to which Phoenix,
London, Marine or Sun Bermuda is a party has been or, prior to the
Closing, will be duly authorized by all necessary corporate action
of Phoenix, London, Marine or Sun Bermuda, as the case may be. 
None of the Ancillary Agreements to which any such Subsidiary of
Sun is a party, nor any of the transactions provided for therein,
violates any provision of the Certificate of Incorporation, or
similar charter document, or By-Laws of such Subsidiary or any
agreement by which such Subsidiary or its properties is bound. 
Each of the Ancillary Agreements to which Phoenix, London, Marine
or Sun Bermuda is a party will, when duly executed and delivered,
be a valid and binding agreement of Phoenix, London, Marine or Sun
Bermuda, as the case may be, enforceable against it in accordance
with the terms thereof, except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, and except that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the equitable discretion of the court
before which any proceeding therefor may be brought.

          Section 2.5  BOOKS AND RECORDS.  The consolidated balance
sheets of McGee and its Subsidiaries as of December 31, 1994 and
the related consolidated statements of income, stockholders' equity
and cash flows for the fiscal year ended on such date, all of which
were audited by independent certified public accountants, and the
consolidated balance sheet of McGee and its Subsidiaries as of
March 31, 1995 and the related statement of income for the three
months ended on such date, copies of which have been delivered by
Sun to Orion, have been prepared in accordance with generally
accepted accounting principles consistently applied (except that
the March 31, 1995 financial statements are subject to normal year-
end adjustments and do not contain full footnote disclosures in
accordance with generally accepted accounting principles) and
present fairly the financial position of McGee and its Subsidiaries
as of such dates and the results of their operations for such
periods.  Sun has also delivered or made available to Orion all
management letters for years beginning after December 31, 1990
which were received by Sun, McGee or any Subsidiary of McGee from 
its independent certified public accountants.


                                - 5 -





<PAGE>
          Section 2.6  NO ADVERSE CHANGE.  Since December 31, 1994,
there has been no event or occurrence (or absence thereof), or
combination of the foregoing, which has had a Material Adverse
Effect. 

          Section 2.7  LITIGATION AND OTHER PROCEEDINGS.   Except
as set forth in Schedule 3.7, there are no actions, suits,
investigations or proceedings pending against, or to Sun's
Knowledge threatened against, the Pool (provided that this
representation shall not extend to actions, suits, investigations
or proceedings against the Pool which arise solely out of claims
under insurance coverage issued by or for the Pool), McGee or its
Subsidiaries or any of their respective officers or employees or
their respective businesses, properties or assets, by any person,
governmental body or agency or by any securities exchange or
national securities association, which action, suit, investigation
or proceeding is reasonably likely to have a Material Adverse
Effect.  Neither Sun nor McGee nor any Subsidiary of McGee is in
default with respect to any order of any court, governmental
authority or agency or arbitration board or tribunal or in
violation of any laws or governmental rules or regulations where
such default or violation is reasonably likely to have a Material
Adverse Effect.  Neither McGee nor any of its Subsidiaries is in
default under any contract or commitment which default has had or
is reasonably likely to have a Material Adverse Effect.

          Section 2.8  TITLE TO PROPERTIES.  McGee and each
Subsidiary of McGee has good and marketable title to all the
property it purports to own, including that reflected in the most
recent balance sheet referred to in Section 3.5 and:

          (i)  All real property owned or leased by McGee or any  
     Subsidiary of McGee and, in the case of leased property, the 
     lease pursuant to which it is leased, is listed and described 
     on Schedule 3.8.  McGee has good and marketable fee title to 
     all owned real property reflected on Schedule 3.8, free and  
     clear of all liens, charges and encumbrances, other than     
     rights of way and easements of record, and subject only to   
     liens of current real and personal property taxes, and such  
     minor defects of title of a nature generally found in        
     properties of similar character which do not in any material 
     way affect the marketability of such real properties or      
     interfere with the ownership and use of such real properties. 
     To Sun's Knowledge, each lease reflected on Schedule 3.8 is  
     valid and subsisting in accordance with its terms, no default 
     

                                - 6 -





<PAGE>

     by any party thereto has occurred, no event, act or omission 
     has occurred which constitutes or with notice or passage of  
     time or both would constitute a default and all such leases  
     are free and clear of any and all charges, liens, claims,    
     rights of third parties and other encumbrances.   To Sun's   
     Knowledge, neither McGee nor any of its Subsidiaries leases  
     any real property to or from any, parent, affiliate, officer 
     or director or any person related to or owned or controlled by 
    any parent, affiliate, officer or director of McGee or any of 
     its Subsidiaries.

          (ii)  Schedule 3.8 contains a true and complete summary, 
     by office location and type of property, of all items of     
     personal property (other than investments reflected in       
     Schedule 3.12) having a value in excess of $10,000 which are 
     used by McGee or any Subsidiary of McGee in its business.    
     Except as set forth in Schedule 3.8, all such personal       
     property is owned or leased by McGee or a Subsidiary free and 
     clear of any and all liens, charges or encumbrances, except  
     for liens for current taxes not yet due and payable and except 
    for those which do not materially detract from the value of   
    the property subject thereto or interfere with the ownership  
    and use of such property.  All such personal property is in   
    good operating condition and repair, ordinary wear and tear   
    excepted, and capable of performing the functions for which it 
    is now used.  To Sun's Knowledge, neither McGee nor any       
    Subsidiary of McGee leases any personal property to or from   
    any officer or director of, or any person related to or owned 
     or controlled by any officer or director of, McGee or any    
     Subsidiary of McGee.

          (iii)  To Sun's Knowledge, Schedule 3.8 contains a true 
     and complete description of all copyrights, patents,         
     trademarks, trade names, franchises, computer and other      
     programs processes and applications and other intellectual   
     property owned or licensed by, and applications for any of the 
    foregoing made by, McGee and each Subsidiary of McGee.  To    
    Sun's Knowledge, none of such property is subject to any lien, 
    charge, encumbrance or adverse claim of any kind.  To Sun's   
    Knowledge, and except as set forth in Schedule 3.8, all such  
    rights are valid, subsisting and in full force and effect in  
    accordance with their terms without interference with, or     
    infringement on or by, the rights of any other person (in each 
     case which are material to the business and operations of    
     
                                - 7 - 







<PAGE>
     McGee and its Subsidiaries, taken as a whole).  To Sun's     
     Knowledge, neither McGee nor any Subsidiary of McGee is      
     engaged in any infringement or unlawful use of any trademark, 
     service mark, trade name, copyright, program, process or     
     application or other intangible property right owned or      
     alleged to be owned by others.

          Section 2.9  NO MATERIALLY ADVERSE AGREEMENTS.  To Sun's
Knowledge, neither McGee nor any of its Subsidiaries is a party to
any agreement or instrument or subject to any charter or other
corporate restriction which has a Material Adverse Effect or in the
future is reasonably likely (so far as Sun can now reasonably
foresee) to have a Material Adverse Effect.

          Section 2.10  NO CONFLICTS.    Neither the execution nor
the delivery by Sun of this Agreement, nor the consummation of the
transactions contemplated hereby, nor the compliance with or
fulfillment of the terms and provisions hereof by Sun, will:
(i) conflict with or result in a breach or violation of any of the
terms, conditions or provisions of the Certificate of Incorporation
or By-Laws of Sun or McGee or any of McGee's Subsidiaries; or (ii)
conflict with or result in a breach or violation of, or default or
loss of a material benefit under, or permit the acceleration of any
obligation under any provision of any agreement, indenture,
mortgage, lien, lease or other instrument or restriction of any
kind to which Sun, McGee or any Subsidiary of McGee is a party or
by which it or any of its assets or properties is otherwise bound;
or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Sun or McGee or any of the Subsidiaries
of McGee or any of the assets or properties of any of them; which
conflict, breach, violation, default, loss or other result, in the
case of each of clauses (ii) and (iii), is reasonably likely to
have a Material Adverse Effect or a material adverse effect on the
ability of Sun to perform its obligations hereunder.  Except as set
forth in Schedule 3.10 hereto, no consent, approval or
authorization of, or filing, registration or qualification with,
any governmental authority on the part of Sun or McGee or any
Subsidiary of McGee is required in connection with the execution,
delivery and performance of this Agreement or the offer, sale or
delivery of the Common Stock as provided herein.

          (b)  Neither the execution nor the delivery by any
Subsidiary of Sun of any of the Ancillary Agreements to which such
Subsidiary is a party, nor the consummation by any such Subsidiary 

                                - 8 -








<PAGE>

of the transactions contemplated by any Ancillary Agreement to
which it is a party, nor the compliance with or fulfillment by any
such Subsidiary of the terms and provisions of any Ancillary
Agreement to which it is a party, will:  (i) conflict with or
result in a breach or violation of any of the terms, conditions or
provisions of the Certificate of Incorporation or By-Laws of such
Subsidiary; or (ii) conflict with or result in a breach or
violation of, or default or loss of a material benefit under, or
permit the acceleration of any obligation under any provision of
any agreement, indenture, mortgage, lien, lease or other instrument
or restriction of any kind to which such Subsidiary is a party or
by which it or any of its assets or properties is otherwise bound;
or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to such Subsidiary or any of its assets or
properties; which conflict, breach, violation, default, loss or
other result, in the case of each of clauses (ii) and (iii), is
reasonably likely to have a Material Adverse Effect or a material
adverse effect on the ability of such Subsidiary to perform its
obligations under any of the Ancillary Agreements to which it is a
party.

          Section 2.11   TAXES.  Except as disclosed in Schedule
3.11:    
          a. To Sun's Knowledge, each of McGee and its Subsidiaries
(and with respect to federal income Taxes, every other entity
included in a consolidated federal Tax Return including McGee and
its Subsidiaries (collectively, the "Consolidated Group")) has duly
and timely filed (either separately or as part of a consolidated
group) with the appropriate government agencies, all federal,
state, local and foreign returns, filings and reports with respect
to Taxes (the "Tax Returns") which are due.  The term "Taxes," as
used in this Agreement, shall mean all federal, state, local and
foreign income and capital taxes, value added taxes, sales and use
taxes, assessments, withholdings, duties, levies, fees and other
governmental charges or impositions of each and every kind, and
interest, penalties and additions to tax with respect thereto.

          b.  To Sun's Knowledge, neither McGee nor any of its
Subsidiaries is delinquent in the payment of any Taxes nor has any
of them requested any extension of time within which to pay any
such Taxes or file any Tax Return with respect thereto except to
the extent that such Taxes have since been paid or such Tax Return
has since been filed.



                                - 9 -
 




<PAGE>
          c.  To Sun's Knowledge, there is no agreement, waiver or
consent providing for an extension of time with respect to (1) the
filing of any Tax Return, election or designation, (2) the payment
or issuance of any assessment of any Tax or (3) the issuance of any
deficiency against McGee or any of its Subsidiaries with respect to
Taxes.  In addition, no power of attorney has been granted by McGee
or any of its Subsidiaries with respect to any tax matter which is
currently in force.

          d.  To Sun's Knowledge, there is no (i) claim or
deficiency for any Taxes which has been threatened or asserted
against McGee or any of its Subsidiaries or the Consolidated Group,
(ii) action, suit, proceeding, investigation, audit or claim
threatened or now pending against, or with respect to, McGee or any
of its Subsidiaries or the Consolidated Group with regard to any
Taxes, or (iii) claim for additional amounts or assessments of such
Taxes asserted by any such authority.

          e.  The federal income Tax Returns of McGee and its
Subsidiaries (including any Tax Return filed by the Consolidated
Group) have been examined by the Internal Revenue Service for all
periods to and including 1989 and all deficiencies asserted as a
result of such examinations have been paid or finally settled and
to Sun's knowledge no issue has been raised by the Internal Revenue
Service in any such examination which, by application of the same
or similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined.  Revenue
Canada, Taxation has mailed a notice of an original assessment in
respect of the Canadian federal income tax liability of the
Canadian Subsidiary of McGee for all fiscal years up to and
including the fiscal year ended 1993.  To Sun's knowledge, no issue
has been raised by any Canadian federal or provincial taxation
authority in any examination which, by application of the same or
similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined.

          f.  To Sun's Knowledge, (i) McGee and each of its
Subsidiaries has not filed an election, consent or agreement under
Section 341(f) of the Code; (ii) no indebtedness of McGee or any of
its Subsidiaries consists of "corporate acquisition indebtedness"
within the meaning of Section 279 of the Code; (iii) since
September 8, 1987, there has not been an "ownership change," "owner
shift involving a five-percent shareholder" or an "equity structure
shift" relating to McGee or any of its Subsidiaries within the
meaning of Section 382(g) of the Code and since September 8, 1987, 


                                - 10 -






<PAGE>
there has not been an acquisition of control of McGee or any of its
Subsidiaries within the meaning of the Income Tax Act (Canada);
(iv) no property of McGee or any of its Subsidiaries is "tax-exempt
use property" within the meaning of Section 168(h) of the Code nor
property that Orion will be required to treat as being owned by
another person pursuant to section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986; (v) neither McGee nor
any of its Subsidiaries is a party to any agreement which would
require them, by reason of the transactions contemplated in this
Agreement or other related agreements executed on the Closing Date,
to make any payment which would constitute a "parachute payment"
for purposes of Sections 28OG and 4999 of the Code; (vi) neither
McGee nor any of its Subsidiaries has made any election pursuant to
state or foreign tax laws that is currently binding on Sun; (vii)
neither McGee nor any of its Subsidiaries is a "gain corporation"
within the meaning of Section 384(c)(4) of the Code; (viii) no
member of the federal consolidated group of which McGee is a member
has made an affirmative action carryover election within the
meaning of Section 1.338-4T(f)(6)(i) of the Treasury Regulations;
(ix) neither Sun nor Phoenix is a "foreign person" within the
meaning of Section 1445 of the Code; (x) no deferred intercompany
transactions within the meaning of Section 1.1502-13 of the
Treasury Regulations have occurred between the members of the
Consolidated Group and McGee and its Subsidiaries; and (xi) McGee
does not have an excess loss account as defined in Section
1.1502-19 of the Treasury Regulations with respect to any of its
Subsidiaries.

          g.  To Sun's Knowledge:

              (i)  Each of McGee and its Subsidiaries has withheld 
     from each payment made to any of its officers, directors,    
     former directors, and employees and former employees the     
     amount of all taxes and other deductions (including without  
     limitation, income taxes, unemployment, disability, and other 
     required taxes and contributions) required to be withheld and 
     has timely paid such withholding (together with its required 
     employer's amount, if any) and has timely and properly filed 
     all required information returns and Tax Returns with respect 
     thereto.

              (ii)  Neither McGee nor the Canadian Subsidiary of  
     McGee has, prior to the date hereof, made or filed any       
     elections for purposes of the Income Tax Act (Canada).


                                - 11 -






<PAGE>
              (iii)  Neither McGee nor the Canadian Subsidiary of 
     McGee has, prior to the date hereof, acquired property from or 
    disposed of property for proceeds less than the fair market   
    value thereof to, any person, firm or corporation with whom it 
    does not deal at arm's length as the term is construed under  
    the Income Tax Act (Canada).

               (iv)  The Canadian Subsidiary of McGee has no      
     outstanding loans or indebtedness incurred by directors,     
     former directors, officers, shareholders (including Sun,     
     Phoenix, London and Marine) of that company or by any person 
     or corporation not dealing at arm's length (as the term is   
     construed under the Income Tax Act (Canada)) with any of the 
     foregoing.

              (v)  The taxation year end of the Canadian Subsidiary 
     of McGee for income tax purposes is December 31.  The taxation 
     year end of the Canadian Subsidiary of McGee has not been    
     changed except as a result of the transactions contemplated by 
     this Agreement.

              (vi)  McGee does not carry on business in Canada    
     through a permanent establishment within the meaning of that 
     term in the Canada-U.S. Income Tax Convention.

          h.  All representations and warranties of Sun as to Taxes
or matters with respect thereto are provided for in this Section
3.11, and no other section of this Article III shall be construed
or interpreted as a representation or warranty of Sun as to Taxes
or matters with respect thereto.

          i.  All representations and warranties set forth in this
Section 3.11 shall be considered true and correct unless the breach
thereof would have a Material Adverse Effect.  

          Section 2.2  INVESTMENTS.  Schedule 3.12, lists (and
shows the custodial location of) all investments in bonds, stocks
and other securities owned by McGee and each of its Subsidiaries as
at the second business day prior to the date hereof, all of which
comply in all material respects with laws and regulations
applicable to the ownership of the same by McGee and its respective
Subsidiaries.  McGee and each of its Subsidiaries has good and
marketable title to all its investments, free and clear of any and
all liens, charges, claims, restrictions, pledges, rights of third
parties and other encumbrances.

                                - 12 -







<PAGE>
          Section 2.13  EMPLOYMENT MATTERS.  Schedule 3.13 contains
a true and complete list of the names and total compensation of all
officers, directors and employees of McGee and each of its
Subsidiaries whose current annual rate of compensation (including
bonuses and commissions paid or committed to such individuals)
exceeds $100,000, together with a summary of the bonuses,
additional remuneration and other benefits, if any, paid or payable
to each such listed person for the years commencing on January 1,
1994 and January 1, 1995.  To Sun's Knowledge, McGee has no
employment or labor contracts relating to any officers, directors
or employees of McGee or any of its Subsidiaries and no employee of
McGee or any of its Subsidiaries is represented by a labor
organization of any type.  To Sun's Knowledge, there are, and has
not since September 8, 1987 been, any effort to unionize or
organize any employees of McGee or any of its Subsidiaries, and no
claim under any federal, state, provincial or local employment
related law, order, ordinance or regulation, or unfair labor
practice, discrimination, wage-and-hour or employment equity claim
is pending or, to Sun's Knowledge, threatened against or with
respect to McGee or any of its Subsidiaries.

          Section 2.14  EMPLOYEE BENEFIT PLANS; ERISA.

          (a)  Schedule 3.14 sets forth a true and complete list of
all employee benefit plans, agreements, commitments, practices or
arrangements of any type (including, but not limited to, plans
described in Section 3(3) of ERISA) maintained by McGee or any of
its Subsidiaries for the benefit of current or former employees or
directors, or with respect to which McGee or any of its Sub-
sidiaries has a liability, whether direct or indirect, actual or
contingent (including, but not limited to, liabilities arising from
affiliation under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA) (the "Benefit Plans").  There are no benefit
plans, agreements, commitments, practices or arrangements of any
type providing benefits to employees or directors of McGee or its
Subsidiaries for which McGee or its Subsidiaries could have any
liability other than the Benefit Plans.

          (b)  No Benefit Plan is a "multiemployer plan" (within
the meaning of Section 3(37) or Section 4001(a)(3) of ERISA) or a
"multiple employer plan" (within the meaning of Section 4064 of
ERISA or Section 413(c) of the Code).  Neither McGee nor any of its
Subsidiaries has a current or potential liability or obligation,
whether direct or indirect, with respect to any multiemployer plan 


                                - 13 -







<PAGE>
or multiple employer plan.  Except as set forth on Schedule 3.14,
no Benefit Plan is a foreign benefit plan (a plan established or
maintained outside the United States of America for the benefit of
employees substantially all of whom are aliens not residing in the
United States of America).

          (c)  Sun has delivered or made available to Orion, true
and complete copies of the following documents, as they may have
been amended to the date hereof, embodying or relating to the
Benefit Plans:

          (i)  each of the Benefit Plans listed in Schedule 3.14, 
    including all amendments thereto, any related trust agreements, 
   group annuity contracts, insurance policies or other funding   
   agreements or arrangements;

          (ii)  the most recent determination letter, if any, as to 
    qualification under Section 401(a) or 403(a) of the Code,     
    received from the Internal Revenue Service ("IRS") with       
    respect to each of the Benefit Plans;

          (iii)  the actuarial valuation, if any, prepared with   
     respect to each of the Benefit Plans for the two most recent 
     plan years and the most recent annual and periodic accountings 
     of Benefit Plan assets, if applicable;

          (iv)  the current summary plan description, if any, for 
     each of the Benefit Plans and any material modifications     
     thereto; and

          (v)  the annual return/report on IRS Form 5500, 5500-C/R, 
     5500-C or 5500-R, if any, for each of the Benefit Plans for  
     the two most recent plan years.

          (d)  Except as provided for in this Agreement or as set
forth in Schedule 3.14, since December 31, 1994, neither Sun nor
McGee (i) has adopted, entered into, or amended any Benefit Plan
that is a defined benefit pension plan, including any change in the
assumptions or factors used in determining benefit equivalencies
under any Benefit Plan, or (ii) since the date of the most recent
actuarial valuation report, made any change in the actuarial
methods or assumptions used in funding any Benefit Plan that is a
defined benefit pension plan subject to ERISA, in the case of (i)
or (ii) other than as required by the applicable Benefit Plan, or 


                                - 14 -






<PAGE>

as may be required to maintain compliance with the law or in
accordance with contracts or agreements elsewhere disclosed in this
Agreement.

          (e)  Except as set forth in Schedule 3.14, (i) the
written terms of each of the Benefit Plans and any related trust
agreement, group annuity contract, insurance policy or other
funding arrangement are in substantial compliance with the
applicable requirements, if any, of ERISA, the Code and any other
applicable law, and, to Sun's Knowledge, each of the Benefit Plans
has been administered in material compliance with such requirements
and in accordance with its terms; (ii) there are no contributions,
premiums or other payment obligations concerning the Benefit Plans
which were due and payable on or before the date hereof which have
not been made in full and in proper form, and adequate accruals
have been provided for in the financial statements for all other
contributions or amounts as may be required to be paid to the
Benefit Plans with respect to periods which include the Closing
Date or which ended prior thereto; (iii) neither Sun nor McGee has
made or agreed to make, nor is required (in order to bring any of
the Benefit Plans into substantial compliance with the applicable
requirements, if any, of ERISA, the Code or other applicable law)
to make, any change in benefits that would materially increase the
costs of maintaining any of the Benefit Plans, except as provided
for in Section 5.7(c) of this Agreement; (iv) no prohibited
transaction has occurred with respect to which McGee or any
Subsidiary of McGee may be directly or indirectly liable for any
excise tax or penalty under Section 4975 of the Code or Section
502(i) of ERISA; (v) each of the Benefit Plans for which Sun or
McGee has claimed a deduction under Section 404(a)(1), (2) or (3)
of the Code has received a favorable determination letter from the
IRS as to the tax qualification of such Benefit Plan (or has a
pending request for such a letter, which request was filed within
the period described in Section 401(b) of the Code), and such
favorable determination has not been modified, revoked or limited
by failure to satisfy any condition thereof or by a subsequent
amendment to, or failure to amend, such Benefit Plan and any
related trust is exempt from taxation under Section 501(a) of the
Code; (vi) as of the date hereof, there are no actions, suits,
disputes, arbitrations or claims pending (other than routine claims
for benefits) or legal, administrative or other proceedings or
governmental investigations pending or, to the knowledge of Sun or
McGee, threatened against any Benefit Plan or against the assets of
any Benefit Plan; (vii) all premiums, interest charges, and 

                     
                                - 15 -






<PAGE>
penalties for late payment, if any, due to the PBGC as of the date
hereof with respect to the Plans have been paid; (viii) no Benefit
Plan has been partially terminated under Section 411(d)(3) of the
Code (except that no representation is being made as to whether a
partial termination occurs solely by reason of the cash-out of
participants provided for under Section 5.7(c) of this Agreement)
and no Benefit Plan that is subject to Title IV of ERISA has been
terminated at any time during the seven-calendar-year period
immediately preceding the date hereof, and no proceeding has been
initiated, to the knowledge of Sun or McGee, to terminate any
Benefit Plan or to terminate any "employee benefit plan" (as
defined in Section 3(3) of ERISA) subject to Title IV of ERISA
sponsored by a member of a controlled group including Sun or McGee,
and McGee has neither incurred nor reasonably expects to incur, any
liability under Title IV of ERISA in respect of any termination of
any Benefit Plan or any employee benefit plan; (ix) to Sun's
Knowledge, McGee has satisfied any bond coverage requirement of
ERISA and all reporting and disclosure obligations under ERISA, the
Code or other applicable law with respect to each of the Benefit
Plans and the related trust, group annuity contract, insurance
policy or other funding arrangement; (x) no "reportable event"
within the meaning of Section 4043(b) of ERISA (as amended by GATT)
has occurred with respect to any Benefit Plan subject to ERISA
(other than those that may result from the transactions
contemplated by this Agreement and disregarding any such events for
which no report is required to be filed); (xi) no breach of
fiduciary duty has occurred with respect to which McGee, its
Subsidiaries, or any Benefit Plan may be liable or otherwise
damaged; (xii) all contributions made or required to be made under
each Benefit Plan for which a federal income tax deduction has been
claimed meet the requirements for deductibility under the Code;
(xiii) to the extent permitted by applicable law, McGee has
expressly reserved in itself the right to amend, modify or
terminate each written Benefit Plan which is subject to ERISA and
each written foreign benefit plan, or any portion of it, without
liability to itself; (xiv) no Benefit Plan that is subject to Part
2, Subtitle B of Title I of ERISA has invested in: (1) insurance or
annuity contracts issued by an insurance company with an A.M. Best
rating below A as of December 31, 1994, or (2) employer securities
or employer real property; (xv) no Benefit Plan requires McGee or
its Subsidiaries to continue to employ any employee, director or
consultant; (xvi) with respect to each Benefit Plan subject to
either Section 412 of the Code or Section 302 of ERISA: (1) such
plan's actuary has determined that such plan uses a funding method
permissible under ERISA and the actuarial assumptions used in 



                                - 16 -





<PAGE>
connection therewith are reasonable, both individually and in the
aggregate, (2) no such plan has any accumulated funding deficiency,
whether or not waived; and (xvii) to Sun's knowledge, the most
recent actuarial valuation report for each Benefit Plan which is a
defined benefit plan, including any foreign defined benefit plan,
is based on information provided by McGee (or Sun, with respect to
employees of Sun Alliance Services USA Inc.) which was accurate and
complete in all material respects.

          (f)  Except as set forth in Schedule 3.14, with respect
to each Benefit Plan which is a welfare plan described in Section
3(1) of ERISA: (i) no such plan provides medical or death benefits
with respect to current or former employees or directors of McGee
beyond their termination of employment, other than coverage
mandated by Sections 601-608 of ERISA and 4980B(f) of the Code,
(ii) each such plan has been administered in compliance with
Sections 601-608 of ERISA and 4980B(f) of the Code; (iii) no such
plan has undisclosed reserves, assets, surpluses or prepaid
premiums; and (iv) no communication to any employee or former
employee made by or on behalf of Sun, McGee, any plan committee,
any plan fiduciary or any plan administrator has been inconsistent
with the documents or actual operation of each such plan or could
be reasonably construed to infringe on McGee's right to modify,
terminate or amend each such plan, to the extent such right exists.

          (g)  The consummation of the transactions contemplated by
this Agreement will not (i) entitle any individual to severance
pay, or (ii) except as provided for in Section 5.7 of this
Agreement, accelerate the time of payment or vesting, or increase
the amount, of compensation due to any individual.  No payment made
or contemplated under any Benefit Plan constitutes an "excess
parachute payment" within the meaning of Section 280G of the Code.

          Section 2.5  CONTRACTS.  Schedule 3.15 contains a list
and description of all contracts, agreements, undertakings and
indebtedness (written or oral) to which, to Sun's Knowledge, McGee
or any Subsidiary of McGee is a party or by which it or its
property is bound and which (i) involve aggregate indebtedness, or
an aggregate commitment, of $50,000 or more or have a remaining
term which cannot be terminated on not more than ninety days'
notice or (ii) relate to McGee's operation of the Pool (but
excluding contracts of insurance and reinsurance by or on behalf of
the Pool) or the relationships between and among Pool Participants. 
To Sun's Knowledge, all such contracts, agreements, undertakings
and indebtedness are free of any default or breach or any alleged 

 
                                - 17 -






<PAGE>
default or breach by McGee, any Subsidiary of McGee or any other
party thereto and no event, act or omission has occurred which,
with the giving of notice or the passage of time or both, would
constitute a breach or default by McGee or any Subsidiary of McGee
or any other party thereto of any of such contracts, leases,
agreements, undertakings or indebtedness.  To Sun's Knowledge, and
except as listed and described in Schedule 3.15, neither McGee nor
any Subsidiary of McGee is a party to or is bound by any contract
with, or is indebted to, any parent, affiliate, officer or director
of (or to any person related to or owned or controlled by any
parent, affiliate, officer or director of) McGee or any Subsidiary
of McGee in any amount whatsoever other than in respect of salaries
(and other compensation and benefits disclosed in Schedule 3.13) of
any officer or director of McGee or any Subsidiary of McGee. 
Except as listed and described in the Schedule 3.15, none of such
parents, affiliates, officers or directors is indebted to McGee or
any Subsidiary of McGee.

          Section 2.16   CAPITAL EXPENDITURES.  Except as disclosed
in Schedule 3.16, neither McGee nor any Subsidiary of McGee has an
outstanding commitment for capital expenditures (including but not
limited to expenditures for data processing hardware, software and
systems) in excess of $50,000 other than for ordinary repairs and
maintenance.  

          Section 2.17  BANKS.  Schedule 3.17 contains a true and
complete list of all banks or other financial institutions in which
either McGee or any Subsidiary of McGee has an account, line of
credit or safe deposit box, showing a description of each such
account and line of credit.

          Section 2.18   AGENTS AND BROKERS.  Schedule 3.18
contains a true and complete list of the names and addresses of
each person ("agents and brokers" herein) who has any authority to
bind (i) McGee or any Subsidiary of McGee or (ii) the Pool or any
Pool Participant (in its capacity as a Pool Participant) or (iii)
any insurance company in its capacity as an issuer of policies of
insurance or reinsurance on behalf of the Pool, in each case with
a description of the type of agency or binding authority granted,
and the geographical or other limits of each such authority or
agency.  Sun has delivered or made available to Orion true and
complete copies of all agreements or other instruments granting any
powers of attorney, agency agreements and broker agreements,
including all current form contracts, of each of McGee and each
Subsidiary of McGee.  To Sun's Knowledge, except as set forth in 


                                - 18 -
                      





<PAGE>
Schedule 3.18, and except where prohibited by law each such
contract with each such agent or broker is terminable by McGee or
such Subsidiary, without payment of any compensation or indemnity,
on ninety (90) days' (or less) notice.  To Sun's Knowledge, (i)
each agent and broker  has been and continues to be properly
licensed to represent McGee or such Subsidiary, as the case may be
to the extent required by law; (ii) except as set forth on Schedule
3.18,  since December 31, 1994 neither McGee nor any Subsidiary of
McGee has terminated or experienced the resignation of any agent or
broker and (iii) McGee and each of its Subsidiaries has
satisfactory relations with its agents and brokers.

          Section 2.19   APPROVED FORMS OF POLICIES.  Each form of
insurance policy, policy endorsement or amendment, reinsurance
contract, annuity contract, application form, sales material and
service contract, and the rates, rating plans and premiums
therefor, now in use by McGee or any Subsidiary of McGee, or by or
on behalf of the Pool, in any jurisdiction has, where required,
been approved by the appropriate insurance regulatory authorities
of such jurisdiction except where the failure to be so approved is
not reasonably likely to have a Material Adverse Effect.

          Section 2.20  INSURANCE.  Schedule 3.20 contains a true
and complete list of all policies of insurance issued to McGee or
to any Subsidiary of McGee or naming any of them as insureds or
covering any of their businesses, assets or liabilities, showing
policy limits, type of coverage, annual premium, premium payment
dates, expiration dates, cash surrender value, and the amount of
loans, if any, secured.  No policy listed has been cancelled and
each policy listed will continue in effect after the Closing Date
on the terms indicated in Schedule 3.20 unless cancelled by the
insured after the Closing Date.

          Section 2.21  ABSENCE OF MATERIAL CHANGES AND ADVERSE
FACTORS.  Since December 31, 1994, and except for the transactions
provided for herein, there has not been, in respect of McGee or any
Subsidiary of McGee:

          (a)  any loss or destruction of, or damage (whether or
not covered by insurance) to, any of its assets or properties which
materially affects or impairs its ability to conduct its business
as now conducted or proposed to be conducted such that a Material
Adverse Effect is reasonably likely to result therefrom;

          (b)  any other event or condition of any character
reasonably likely to have a Material Adverse Effect;


                                - 19 -





<PAGE>
          (c)  any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of
McGee or any Subsidiary of McGee or any direct or indirect
redemption, purchase or other acquisition by McGee or any
Subsidiary of McGee of any such stock; or

          (d)  any indebtedness or other liability or obligation
(whether absolute, accrued, contingent or otherwise) incurred or
other transaction (except that reflected in this Agreement)
incurred by it other than in the ordinary course of business.

          Section 2.22  ENVIRONMENTAL MATTERS.  To Sun's Knowledge,
McGee and each of McGee's Subsidiaries is in compliance with all
applicable environmental laws governing its business for which
failure to comply is likely to have a Material Adverse Effect, and
neither McGee nor any of its Subsidiaries is liable for any
material penalties, fines or forfeitures for failure to comply with
any of the foregoing in the manner set forth above.  All licenses,
permits, registrations or approvals required for the business of
McGee and each of McGee's Subsidiaries under any environmental law
have, to Sun's Knowledge, been secured and McGee and each of its
Subsidiaries is in substantial compliance therewith, except such
licenses, permits, registrations or approvals the failure to
secure, or to comply with which, is not likely to have a Material
Adverse Effect.  To Sun's Knowledge, there are no environmental
claims pending or threatened, which (a) question the validity, term
or entitlement of McGee or any of McGee's Subsidiaries for any
permit, license, order or registration required for the operation
of any facility which McGee or any of McGee's Subsidiaries
currently operates and (b) wherein an unfavorable decision, ruling
or finding would be reasonably likely to have a Material Adverse
Effect.  To Sun's Knowledge, there are no facts, circumstances,
conditions or occurrences on any real property owned or leased by
McGee or any of McGee's Subsidiaries, or on any property adjacent
to such real property that could reasonably be expected (i) to form
the basis of an environmental claim against McGee or any of its
Subsidiaries or any real property owned or leased by McGee or any
of its Subsidiaries or (ii) to cause such real property to be
subject to any restrictions on the ownership, occupancy, use or
transferability of such real property under any environmental law,
except in each such case, such environmental claims or restrictions
that individually or in the aggregate are not reasonably likely to
have a Material Adverse Effect.  To Sun's Knowledge hazardous toxic
materials have not at any time been (i) generated, used, treated or
stored on, or transported to or from, any real property owned or 


                                - 20 -






<PAGE>
leased by McGee or any of McGee's Subsidiaries except in compliance
with applicable environmental laws or (ii) released on any such
real property, in each case where such occurrence or event is
reasonably likely to have a Material Adverse Effect.  

          Section 2.23  FINDERS AND BROKERS.  All negotiations on
behalf of Sun relative to this Agreement and the transactions
contemplated hereby have been carried on directly by Sun without
the intervention of any broker, finder, investment banker or other
third party representing Sun.  Neither Sun nor any Subsidiary nor
any officer or director of Sun or any of its Subsidiaries has
engaged or authorized any broker, finder, investment banker or
other third party to act on behalf of Sun, directly or indirectly,
as a broker, finder, investment banker or in any other like
capacity in connection with this Agreement or the transactions
contemplated hereby, or has consented to or acquiesced in anyone so
acting.  Sun knows of no claim by any person against Sun or any of
its Subsidiaries or Orion for compensation for so acting or of any
basis for such a claim and Sun shall hold Orion totally harmless
against any costs or expenses to Orion arising out of any such
claim.

          Section 2.24  DISCLOSURE.  No representation or warranty
of Sun contained herein or in any Schedule hereto contains or will
on the Closing Date contain any untrue statement of a material fact
or omits or will on the Closing Date omit to state any material
fact necessary to make the statements herein or therein not false
or misleading.

          Section 3.25  CANADIAN BANK ACT.  To Sun's Knowledge, the
principal activity in Canada of McGee and each of its Subsidiaries
does not consist of (i) providing any services that a bank is
permitted by the Bank Act (Canada) to provide in Canada, (ii)
providing fiduciary services, (iii) performing the functions of an
investment dealer, stock broker, investment counsellor or portfolio
manager, (iv) the business of insurance, including the function of
an insurance agent or broker or (v) any combination of such
activities, all as defined by the provisions of the Bank Act
(Canada).
 
 






                                - 21 -






<PAGE>
                                IV.

                   REPRESENTATIONS, WARRANTIES AND
                        AGREEMENTS OF ORION       
                   --------------------------------


          Orion represents, warrants and agrees as follows:

          Section 3.1   ORGANIZATION AND STANDING.  Orion is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.  Orion has all requisite
corporate power and authority to own its properties and to carry on
its business as now being conducted.

          Section 3.2  CERTIFICATE OF INCORPORATION AND BY-LAWS. 
The copies of the Certificate of Incorporation and By-Laws of Orion
which have heretofore been delivered to Sun are true, accurate and
complete and reflect all amendments or changes in effect as of the
date hereof.

          Section 3.3   AUTHORITY.  Orion has full corporate power
and authority to enter into this Agreement and (subject to any
requisite approvals of insurance and other regulatory authorities,
all of which are set forth on Schedule 4.3 hereto) to carry out the
transactions contemplated hereby.  The execution and performance of
this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Orion and this Agreement
constitutes a valid and binding obligation of Orion enforceable in
accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, and except that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the equitable discretion of the court
before which any proceeding therefor may be brought.  Neither the
execution nor the delivery of this Agreement, nor the consummation
of the transactions herein contemplated, nor compliance with nor
fulfillment of the terms and provisions hereof, will (i) conflict
with or result in a breach or violation of any of the terms,
conditions or provisions of the Certificate of Incorporation or By-
Laws of Orion.  Except as set forth in Schedule 4.3 hereto, no
consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of Orion
or any Subsidiary of Orion is required in connection with the
execution, delivery and performance by Orion of this Agreement or
the purchase of the Common Stock as provided herein.

                                - 22 -






<PAGE>
          Section 3.4   FINDERS AND BROKERS.  All negotiations on
behalf of Orion relative to this Agreement and the transactions
contemplated hereby have been carried on directly by Orion without
the intervention of any broker, finder, investment banker or other
third party representing Orion.  Neither Orion nor any Subsidiary
nor any officer or director of Orion or any of its Subsidiaries,
has engaged or authorized any broker, finder, investment banker or
other third party to act on Orion's behalf, directly or indirectly,
as a broker, finder, investment banker or in any other like
capacity in connection with this Agreement or the transactions
contemplated hereby, or has consented to or acquiesced in anyone so
acting.  Orion knows of no claim by any person against Orion or any
of its Subsidiaries for compensation for so acting or of any basis
for such a claim and Orion shall hold Sun totally harmless against
any costs or expenses to Sun arising out of any such claim.  

          Section 3.5  INVESTOR STATUS.  Orion is an "Accredited
Investor" within the meaning of SEC Rule 501(a). 

          Section 3.6  BANK OR BANKING INSTITUTION.  Neither Orion
nor any affiliate (as defined) of Orion is a "foreign bank" or
"foreign banking institution" as such terms may be defined under
the Bank Act (Canada).
 

                                V.

                    COVENANTS OF ORION AND SUN

          Section 4.1   ACCESS TO PROPERTIES, BOOKS AND RECORDS. 
Prior to the Closing Date, Sun shall afford or cause McGee to
afford to the officers, attorneys, accountants and other authorized
representatives of Orion, reasonable access to McGee and to each
Subsidiary of McGee and to the officers, properties, books and
records (electronic and other) of all of the foregoing during
regular business hours and upon prior notice to Sun in order to
afford Orion the opportunity to make such investigations of the
affairs of McGee and its Subsidiaries as they may reasonably deem
necessary.  Sun shall also furnish, or cause McGee and its
Subsidiaries to furnish, to Orion such information relating to
their respective businesses and affairs as Orion shall from time to
time reasonably request.  All information made available to Orion
and its representatives pursuant to this Section 5.1 shall be
subject to the terms of the confidentiality letter agreement dated
January 9, 1995 between Sun and Orion (which is incorporated herein
by reference thereto).

                                - 23 -





<PAGE>
          Section 4.2  CONDUCT OF BUSINESS.

          (a)  Except as otherwise permitted by this Agreement, or
as set forth on Schedule 5.2 hereto, or with the prior written
consent of Orion, prior to the Closing Date Sun shall not cause,
suffer or permit McGee or any of its Subsidiaries, either on its
own behalf or on behalf of or for the account of the Pool to:

               (i)  create, issue or sell any of its own stocks,  
     bonds, or other of its corporate securities, or grant or     
     otherwise issue any options, warrants or other purchase rights 
    with respect thereto, or enter into any contract or commitment 
    to do any of the foregoing;

              (ii)  create, incur, assume, guarantee or otherwise 
     become liable with respect to any obligations or liabilities, 
     fixed or contingent, in excess of $50,000 in the aggregate;

              (iii)  declare or make any payment or distribution to 
    its stockholders or purchase or redeem any shares of its      
    capital stock or the capital stock of McGee or any Subsidiary 
     of McGee;

              (iv)  sell or transfer any properties or assets     
     (including cash held in bank accounts or otherwise) or cancel, 
    release or assign any indebtedness owed to it or any claims   
    held by it, other than in the ordinary course of business;

              (v)  mortgage, pledge or subject to lien, or any    
     other encumbrance, any assets, tangible or intangible except 
     for liens (i) with respect to deposits with State insurance  
     departments and (ii) letters of credit, trust funds and funds 
     withheld arrangements, in each case relating to credit for   
     reinsurance provided that such liens shall have been in the  
     ordinary course of business;

              (vi)  sell, assign, transfer or otherwise dispose of 
     any tangible assets or cancel any debt or claim, except in   
     each case in the ordinary course of business;

              (vii)  sell, assign or transfer any intangible right 
     or asset;


                                - 24 -










<PAGE)
              (viii)  amend, terminate or waive any right of  any 
     substantial value, other than in connection with the         
     settlement of claims, including reinsurance claims, or       
     otherwise in the ordinary course of business;

              (ix)  except in the ordinary course of business, make 
    any change in the methods of valuation or accounting or of    
    determining reserves for McGee or any Subsidiary of McGee or  
    for the Pool from the methods  applied during and for the     
    period ended December 31, 1994;

              (x)  make any substantial change in the form of     
     contract currently in force between McGee or any of its      
     Subsidiaries and brokers and agents representing McGee or any 
     of its Subsidiaries or enter into any contract with any agent 
     or broker other than in substantially the form now used;

              (xi)  grant any salary increase to any officer or any 
    general salary increase to its employees other than, in each  
    case, normal merit and cost-of-living increases, or enter into 
     any new, or amend or alter in any material respect any       
     existing, employment or consulting agreement or any bonus,   
     incentive compensation, profit sharing, retirement, pension, 
     group insurance, death benefit or other fringe benefit plan, 
     trust agreement or similar arrangement adopted by it with    
     respect to its own employees or any of its agents, general   
     agents or underwriting managers;

              (xii)  amend its Certificate of Incorporation or By- 
     Laws or merge or consolidate with any other corporation;

              (xiii)  acquire or increase its beneficial ownership 
     of stock or assets of any other person, firm, association,   
     corporation or other business organization except for        
     investments made in the ordinary course and consistent with  
     prior investment practice;

              (xiv)  except in the ordinary course of business or 
     as required by this Agreement, enter into or assume any      
     contract, agreement, obligation, lease, license or commitment 
     having a term in excess of one year or involving an aggregate 
     monetary commitment or exposure for all such contracts in    
     excess of $50,000;


                                -  25 -






<PAGE>              

              (xv)  arrange for or solicit the issuance or renewal 
     of insurance of any risk other than those insurance risks    
     which are undertaken by or on behalf of the Pool;

              (xvi)  knowingly do or omit to do any act which could 
    reasonably be expected to cause a breach of any contract,     
    commitment or obligation, which breach is reasonably likely to 
    have a Material Adverse Effect;

              (xvii)  make any capital expenditures, capital      
     additions or capital improvements, or commitments for any of 
     the foregoing, which involve, in the aggregate, in excess of 
     $50,000, except for commitments in effect on the date hereof 
     as reflected on Schedule 3.16;

              (xviii)  amend any Tax Return, settle any tax audit 
     or tax controversy, make any tax election or change any tax  
     accounting method;

              (xix)  directly or indirectly encourage, initiate or 
     engage in discussions or negotiations with, or provide any   
     information to, any corporation, partnership, person or other 
     entity or group, other than Orion and its Subsidiaries,      
     concerning the issuance or sale of any shares of its capital 
     stock, any merger or other business combination, any         
     disposition of or grant of an interest in a substantial asset 
     or any similar transaction involving McGee; and Sun will and 
     will cause McGee to notify Orion promptly and in full detail 
     of any proposal made, or to be made, to Sun or McGee, with   
     respect to (i) any offer to purchase, or any invitation to   
     tender for purchase, any or all of the capital stock of McGee 
     or any Subsidiary of McGee; (ii) any proposed merger or other 
     form of business combination with McGee or any Subsidiary of 
     McGee; or (iii) any purchase of any substantial asset or     
     liability of McGee or any Subsidiary of McGee or any interest 
     in any substantial asset or liability of McGee or any        
     Subsidiary of McGee.

          (d) Except as otherwise permitted by this Agreement or
with the prior written consent of Orion, prior to the Closing Date,
Sun shall cause McGee and each of its Subsidiaries to use
commercially reasonable best efforts to:


                                - 26 -








<PAGE>

              (i)   maintain at all times its status as a         
     corporation, duly organized, validly existing, in good       
     standing and duly qualified and licensed to conduct its      
     business as now being conducted (x) in the jurisdiction of   
     its incorporation and (y) except where the failure to do so  
     would  not have a Material Adverse Effect, each of the other 
     jurisdictions in which it is so conducting its business;

              (ii)  at all times do or cause to be done, and cause 
     each of its officers and employees to do, all things necessary 
     to maintain, preserve and renew the corporate existence of   
     McGee and the corporate existence of the Subsidiaries of McGee 
     and all federal, provincial, state and local and other       
     licenses, permits, franchises and other governmental         
     authorizations necessary to own and operate their respective 
     properties and carry on their respective businesses, and     
     comply with all federal, provincial, state and local laws    
     applicable to McGee or any of its Subsidiaries or the Pool   
     except where the failure to do so is not reasonably likely to 
     have a Material Adverse Effect;

              (iii)  operate its business substantially as        
     presently operated and only in the ordinary course and (A)   
     preserve substantially intact the present business           
     organization (including the retention of key employees), (B) 
     collect all premiums, balances due from reinsurers and Pool  
     Participants and accounts receivable and (C) preserve its    
     relationships with and the goodwill of its Pool Participants, 
     customers, suppliers, agents, general agents, other insurers 
     and reinsurers and other persons having business dealings with 
     it except where the failure to do so is not reasonably likely 
     to have a Material Adverse Effect;

              (iv)  with respect to the properties of McGee and   
     each of its Subsidiaries, maintain in force all existing     
     casualty and liability insurance and reinsurance policies and 
     fidelity bonds or policies or bonds providing substantially  
     the same coverage;

              (v)  maintain proper business and accounting records 
     for itself in accordance with generally accepted accounting  
     principles and for the Pool in accordance with accounting    
     practices required or permitted by applicable federal,       
     provincial, state and local regulation;


                                - 27 -






<PAGE>
     advise Orion in writing of any event, occurrence or          
     circumstance of which it is aware which is reasonably likely 
     to  have a Material Adverse Effect; 

              (vii)  comply in all material respects with all laws 
     applicable to it and to the conduct of its business;

              (vi)  maintain all of the properties which are      
     material to its business operations or financial condition in 
     good operating condition and repair, ordinary wear and tear  
     excepted, and take all steps reasonably necessary to maintain 
     its intangible assets.

          Section 4.3  REGULATORY AND OTHER FILINGS AND APPROVALS. 
Each of Orion and Sun shall duly make (and Sun shall cause its
Subsidiaries, including McGee and its Subsidiaries, to make) all
regulatory filings required to be made by each in respect of this
Agreement or the transactions contemplated hereby.  Each of Orion
and Sun shall use its commercially reasonable best efforts to
obtain (and cause its Subsidiaries to obtain) all regulatory
approvals necessary to carry out the transactions contemplated by
this Agreement, including, without limitation, the obtaining by
Orion's Subsidiaries of any necessary approvals by insurance
commissioners or superintendents of insurance of policy forms to be
used by or on behalf of the Pool following the Closing.
Section   Premerger Notification and Clearance.  Pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "Hart-
Scott-Rodino Act"), the Investment Canada Act and the Competition
Act of Canada, each of Orion and Sun will file, or cause to be
filed, any application, notification or report form which is
required to be filed with the Premerger Notification Office of the
U.S. Federal Trade Commission or with the Antitrust Division of the
U.S. Department of Justice or with Investment Canada (collectively
referred to herein as the "Premerger Notification Agencies") in
respect of the transactions contemplated hereby, each of which
filings shall comply as to form with all requirements applicable
thereto and all of the data and information reported in which shall
be true, correct and complete in all material respects.  Each of
Orion and Sun will promptly comply with all requests, if any, of
any of the Premerger Notification Agencies for additional informa-
tion or documentation in connection with each notification, report
and application filed by or on behalf of either Orion or Sun with
any of the Premerger Notification Agencies, unless in the opinion
of both Donovan Leisure Newton & Irvine and Dewey Ballantine (or of
Morris/Rose/Ledgett and Borden & Elliot in the case of filings made

                                
                                - 28 -






<PAGE>
under the Investment Canada Act) such compliance is not necessary
in order to obtain clearance from the relevant Premerger
Notification Agencies.  Such additional information and
documentation will comply with all requirements applicable thereto
and will be true, correct and complete in all material respects.

          Section 4.5  BERMUDA COMPANY.  Effective as of the
Closing, Orion shall cause Wm. H. McGee & Co. (Bermuda), Ltd., a
Bermuda corporation and a Subsidiary of McGee ("McGee Bermuda"), to
enter into a Management Agreement with Sun Bermuda substantially in
the form of Exhibit A hereto.  Under such Agreement, Sun Bermuda
shall write and issue insurance exclusively for McGee and McGee
Bermuda shall pay all costs and expenses incurred by Sun Bermuda
(including, without limitation, any licensing fees) in connection
with its business and operations during the period from the Closing
through the earlier of December 31, 1997 or the date as of which
the Management Agreement is terminated because Orion has notified
Sun that it no longer requires the services of Sun Bermuda as a
writer and issuer of insurance.  Sun shall have no obligation,
after the earlier of such dates to continue to write and issue or
cause to be written and issued those forms of insurance (in the
jurisdictions in which they have been issued) which have heretofore
been written and issued by Sun Bermuda on behalf of McGee or any
Subsidiary of McGee or the Pool and Orion will, if it or one of its
insurance Subsidiaries wishes to write and issue those forms of
insurance, after the earlier of such dates, either (a) exercise the
option referred to in Section 6.2(d) to purchase Sun Bermuda, or
(b) organize or acquire by that date a properly qualified and
licensed Bermuda corporation.

          Section 4.6  FURTHER ASSURANCES.    Each of Orion and Sun
agrees to use commercially reasonable best efforts to take such
reasonable action as may be necessary or appropriate in order to
effectuate the transactions contemplated hereby.  In case at any
time after the Closing Date any further action by Sun is necessary
or desirable to  vest Orion with full title to the Common Stock and
to the use, benefit and ownership of the properties, assets,
rights, approvals, immunities and franchises of McGee and its
Subsidiaries evidenced thereby, Sun shall take all such action.

          (b)  From and after the date hereof and until December
31, 1997, and in furtherance of and in addition to other
obligations of Sun pursuant to this Agreement and the transactions
entered into pursuant hereto, Sun shall not (i) use or purport to
license or allow any other person to license any mark, trade name 

                                - 29 -







<PAGE>

or trade dress of McGee or any Subsidiary of McGee or (ii) in any
way damage or disparage, and shall undertake and ensure that no
Subsidiary of Sun so damages or disparages, the name, business or
reputation of McGee or any of McGee's Subsidiaries, or of the Pool
or any mark, trade name or trade dress of McGee or any Subsidiary
of McGee or of the Pool.

          Section 4.7  PENSION PLAN MATTERS.    Effective no later
than the Closing Date, Sun shall cease to be a participating
employer under the Wm. H. McGee & Co., Inc. Retirement Income Plan
(the "Pension Plan") and the Profit Sharing Plan of Wm. H. McGee &
Co., Inc. (the "Fidelity Plan") and McGee and its Subsidiaries
shall be the sole participating employers with the power to amend
such plans.

          (b)  Within 60 days following the Closing Date, Sun shall
cause to be established an individual account plan (the "Sun
Plan"), which plan shall be substantially similar to the Fidelity
Plan, except to the extent necessary to comply with the tax
qualification provisions of the Code, for the benefit of
participants in the Fidelity Plan who are current or former
employees of Sun Alliance USA Services Inc. and beneficiaries of
deceased employees or former employees of Sun Alliance USA Services
Inc. ("Plan Participants").  Contributions with respect to the Plan
Participants under the Fidelity Plan shall be made only for the
period through the Closing Date.  Within 60 days following the
Closing Date, Sun shall deliver to Orion a copy of the Sun Plan and
a determination letter in respect thereof to the effect that the
terms of the Sun Plan satisfy the requirements under Section 401(a)
of the Code.  As soon as practicable after the receipt of such
letter, but no later than 60 days following the Closing Date, Sun
and Orion shall cause on behalf of their respective plans the
filing with the IRS of Forms 5310-A, as either may be required to
file such form, specifying a valuation date approximately 30 days
after the filing of such form(s), as mutually agreed to by Sun and
Orion, on which date shall occur an in-kind transfer from the trust
through which the Fidelity Plan is funded to the trust for the Sun
Plan of each Plan Participant's aggregate account balance.  On the
date specified in the Form(s) 5310-A, or such later valuation date
as is mutually agreed upon by Sun and Orion, or, in the event that
neither Sun nor Orion is required to file a Form 5310-A, as soon as
practicable after receipt of the determination letter, the transfer
of each Plan Participant's aggregate account balance from the
Fidelity Plan's trust to the Sun Plan's trust shall occur.  Sun


                                - 30 -






<PAGE>

shall pay any and all Fidelity expenses, fees and disbursements in
connection with such transfer and otherwise each of Sun and Orion
shall pay its own fees, expenses and reimbursements in connection
with such transfer.

          (c)  On or before the Closing Date, Sun shall cause the
Pension Plan to be amended in the form set forth in Schedule 3.14. 
Within a 30 day period immediately following the Closing, Sun shall
use reasonable efforts (to the extent permitted by applicable law)
to obtain the consent of each current employee of Sun Alliance USA
Services Inc. to cash him or her out of the Pension Plan as of the
next practicable valuation date after the Closing Date.  After the
Closing Date, Sun shall cooperate with Orion and McGee with respect
to any reasonable request by Orion or McGee to provide information
to current employees of Sun Alliance USA Services Inc. who have not
been cashed out.  Sun shall pay any and all expenses, fees and
disbursements incurred for actuarial evaluations in connection with
the cash-outs and, otherwise, each of Sun and Orion shall pay its
own expenses, fees and disbursements.

          (d)  Sun will indemnify and hold harmless Orion, McGee
and its Subsidiaries from and against any damages, liabilities,
losses, costs or other obligations arising in connection with or
attributable to any employee benefit plan (as defined in Section
3(3) of ERISA) maintained by or which has ever been contributed to
by Sun or any entity affiliated with Sun under Section 414(b), (c),
(m) or (o) of the Code or Section 4001 of ERISA, other than plans
maintained by or contributed to by McGee and its Subsidiaries.

          (e)  Orion, McGee and Sun each agree to cooperate in
providing records and administrative information to implement the
provisions of this Section.
 
          Section 4.8  TAX MATTERS.  Each of Orion and Sun
covenants that:

          (a) (i)   Sun shall prepare and file, or cause to be
prepared and filed, and shall have the sole authority with respect
to the form and content of, and otherwise control, all federal
income Tax Returns and all state or local combined, consolidated
and unitary Income Tax Returns which include McGee or its
Subsidiaries for all taxable periods ending on or before the
Closing Date (the "Sun Returns"), including the federal income Tax
Return required to be filed for the period commencing on January 1,

 
                                - 31 -







<PAGE>
1995 and ending on the Closing Date (the "1995 Short Period Tax
Return" and the "1995 Short Period," respectively); provided,
however, that Sun shall consult with, and reasonably consider the
views of, McGee, with respect to the treatment of any item on such
Tax Returns where such treatment (A) does not materially effect the
Consolidated Group and (B) could reasonably be expected to have a
material adverse effect on McGee.  The 1995 Short Period Tax Return
shall be prepared in a manner consistent with the federal income
Tax Returns of McGee filed prior to the Closing Date (the "Prior
Returns"), as such Prior Returns shall have been amended.

          (ii)  Orion shall be responsible for preparing and filing
or causing McGee and its Subsidiaries to prepare and file all Tax
Returns not described above in subsection 5.8(a)(i) required to be
filed after the Closing Date which include McGee or its
Subsidiaries or the operations of McGee or its Subsidiaries.

          (b)  Orion shall be liable for and shall pay and hold Sun
and its Subsidiaries harmless against any and all Taxes
attributable to McGee or its Subsidiaries or such entities'
operations (including federal income Taxes that McGee is liable for
under the terms of the Federal Income Tax Allocation Agreement
among Sun and its Subsidiaries, dated March 4, 1991, as amended
through the date of this Agreement (the "Tax Allocation
Agreement")).  Notwithstanding the foregoing, with respect to any
taxable periods ending on or before December 31, 1994, Orion's
indemnity liability hereunder shall not exceed the sum of (i) two-
hundred thousand dollars ($200,000) and (ii) the amount of any
refund of Taxes paid by Sun to Orion pursuant to Section 5.8 (d)
hereof or received by McGee or its Subsidiaries directly in respect
to taxable periods ending on or before December 31, 1994, net of
any additional Taxes imposed upon McGee or its Subsidiaries with
respect to any such refund, and (iii) the liabilities for, or
reserves in respect of, current or prior period Taxes which were
reflected on the financial statements of McGee and its
Subsidiaries, dated December 31, 1994, and which, as of the
Closing, remain unpaid (the amount of any Taxes not indemnifiable
by Orion by reason of the operation of this sentence being referred
to as the "Reimbursable Taxes").  Sun will indemnify and hold
harmless Orion, McGee and its Subsidiaries from and against (i) any
liability for the Taxes of any member of the Consolidated Group,
other than McGee and its Subsidiaries and (ii) any Taxes of McGee
and its Subsidiaries constituting Reimbursable Taxes.  The amount
of any indemnity payment made under this Section 5.8(b) by one 
  

                                - 32 -






<PAGE>
party to or for the benefit of the other party will be reduced, but
not below zero, by an amount equal to the present value of any
current or reasonably anticipated future tax benefit which is made
available, directly or indirectly, to the indemnitee or any
affiliate thereof for any taxable period (or portion thereof) by
reason of any such indemnity or other payment or the accrual of any
amount giving rise to any such payment (or by reason of the
adjustment or other event or circumstance giving rise thereto). 
The calculation of the present value of any such current or
reasonably anticipated future tax benefit shall be made (A) by
discounting the amount of any reasonably anticipated future tax
benefit from the period such benefit is reasonably anticipated to
be realized to the date the related payment under this Section
5.8(b) is to be made, utilizing a discount rate equal to the
Applicable Federal Rate (as such term is defined in section 1274 of
the Code and the Treasury Regulations promulgated thereunder and
which is effective for the last day of the month preceding the
month the related payment under this Section 5.8(b) is due) which
most accurately corresponds to the length of the period such amount
is being discounted, and (B) assuming that the calculation of the
current or reasonably anticipated future tax benefit for the
item(s) in question is based on application of the highest
applicable federal, state and local income tax rate in effect for
the taxable period(s) (or portion(s) thereof) during which the
related payment under Section 5.8(b) is to be made.

          (c)  Orion shall cause McGee to pay to Sun, or Sun shall
pay to McGee, as the case may be, the difference between the Taxes
attributable to the 1994 federal income taxable period and the 1995
Short Period required to be paid by McGee under the Tax Allocation
Agreement and the amounts theretofore paid by McGee to Sun in
respect of the relevant taxable period, which payments shall be
paid within five (5) days of the date Sun files the 1994 federal
consolidated income Tax Return and the 1995 Short Period Tax
Return, respectively.  In addition, Sun or McGee, as the case may
be, will pay to the other the amount due pursuant to Section 6.3 of
the Tax Allocation Agreement within five days of the date on which
Sun files the 1995 Short Period Tax Return.

          (d)  Provided that Orion or McGee have paid, indemnified
and held harmless Sun and its Subsidiaries against all Taxes
attributable to McGee or its Subsidiaries or their operations, Sun
shall pay to Orion the amount of any refund of Taxes received
(together with any interest received or credited with respect to
such refund) after the Closing Date by Sun to the extent that such 


                                - 33 -






<PAGE>
amount is in excess of any amount that Orion has not paid by reason
of the operation of the limitation set forth in the second sentence
of subsection 5.8(b) hereof and that is attributable to McGee or
its Subsidiaries under the Tax Allocation Agreement.  Sun shall pay
to Orion the amount owing hereunder within twenty (20) business
days after the receipt or realization by Sun of the related refund
or credit.

          (e)  Orion shall be liable for and shall pay, and shall
hold Sun and its Subsidiaries harmless against, any Taxes attribut-
able to any election under Section 338 of the Internal Revenue Code
of 1986, as amended (the "Code"), with respect to the transactions
contemplated hereunder.

          (f)  Orion shall be liable for and shall pay, and shall
hold Sun and its Subsidiaries harmless against, any transfer,
recordation, stamp, or similar Taxes of any kind required in the
applicable jurisdiction in connection with the effectuation of the
transactions contemplated hereunder and imposed upon Sun and its
Subsidiaries.

          (g)  Sun, Orion and McGee hereby agree that the transfer
of the Common Stock under this Agreement and the acquisition or
control of McGee shall be effective as of the close of business on
the Closing Date and that it is their intention, for federal income
Tax purposes, that McGee and its Subsidiaries will cease to be a
member of the Sun Consolidated Group as of said close of business.

          (h)  Orion agrees that, to the extent permitted by
applicable law, it shall not carry back, and shall not cause or
permit McGee or its Subsidiaries or any other affiliate of Orion to
carry back, any net operating loss, loss from operations or other
tax attribute to any taxable year or period of McGee or its
Subsidiaries or any affiliate thereof (including, but not limited
to, any member of any affiliated, combined or unitary group of
which McGee is or was a member) ending on or before the Closing
Date, or to any taxable period beginning before and ending after
the Closing Date, to the extent of the portion of such period
ending on the Closing Date.  Orion agrees that Sun shall not have
any obligation under this Agreement to return or remit any refund
or other tax benefit attributable to a breach by Orion of the
foregoing undertaking.


                                - 34 -









<PAGE>
          (i)  In connection (A) with any federal income tax audit
or administrative or court proceeding relating to taxable periods
of McGee ending on or prior to the Closing Date and (B) with any
proposed assessment of any Reimbursable Taxes, Sun shall have the
sole right in good faith and in a reasonably diligent manner to
represent McGee's interest in such audit or proceeding or the
contest of any proposed assessment, including by employing counsel
of its choice.  Sun will keep McGee and its counsel informed of the
status of all audits or proceedings and the contest of any proposed
assessment to the extent such matters relate to Taxes other than
Reimbursable Taxes and shall afford McGee and its counsel the right
to participate (at McGee's expense) in any such audits or
proceedings to the extent such matters relate to Taxes other than
Reimbursable Taxes.  Sun shall not, without the consent of McGee
(which consent shall not be unreasonably withheld), settle any
issues or agree to any proposed assessments which settlement or
agreement involves Taxes with respect to McGee or its Subsidiaries
of $10,000 or more.  Orion shall cooperate fully with Sun and make
available to Sun in a timely fashion all data and other information
reasonably requested by Sun in any such audit or proceeding
including, but not limited to, the granting of a power of attorney
to Sun to represent McGee and its Subsidiaries.

          (j)  With respect to the taxable periods of McGee and its
Subsidiaries ending on or before the Closing Date for which a Sun
Return is to be filed, Orion shall cause McGee and its Subsidiaries
to prepare and provide to Sun packages of tax information materials
(including, but not limited to, (1) information requested by Sun in
writing, and (2) federal and state income tax information),
together with relevant work papers and all other relevant materials
requested by Sun for these purposes (the "Tax Packages"), for
purposes of enabling Sun to prepare all Sun Returns required to be
filed by Sun pursuant to Section 5.8(a)(i) for such periods.  Orion
shall use its best efforts to cause the Tax Packages for the
taxable periods ending December 31, 1994 of McGee to be delivered
to Sun on or before July 31, 1995, and Orion shall cause the Tax
Packages of McGee for all other such periods, including the Short
Period, to be delivered to Sun on or before June 30, 1996;
provided, however, that for purposes of enabling Sun to prepare and
file an extension of time for filing any Sun Returns which include
the Short Period, Orion shall cause McGee to furnish to Sun by
February 15, 1996, McGee's preliminary estimate of taxable income
for the Short Period.

 
                                - 35 -








<PAGE>

          (k)  Orion recognizes that from time to time after the
Closing Date, Sun and its affiliates and their agents and
representatives will need reasonable access to accounting and tax
books, records and other information h eld by McGee and its
Subsidiaries with respect to their assets or operations for events,
transactions or other items occurring or accruing on or prior to
the Closing Date ("Tax Records").  In connection therewith, Orion
agrees that it and its affiliates shall retain all the Tax Records,
including, in particular, all such Tax Records that Sun may specify
in reasonable detail in writing on or before the Closing Date
("Specified Tax Records") and will retain such other of the Tax
Records in such format and for such periods as Orion would retain
its own tax records, taking into account the expiration of the
applicable period of assessment of the Tax to which such retention
relates.  Furthermore, prior to (i) knowingly discarding or
destroying any Tax Records (other than Specified Tax Records), and
(ii) discarding or destroying any Specified Tax Records, Orion
shall give Sun and its affiliates and their agents and
representatives a reasonable opportunity to inspect, review and
make copies or take possession of the Tax Records or Specified Tax
Records, as the case may be.

          (l)  Except with respect to the parties, obligations
under this Agreement, at the Closing, the Tax Allocation Agreement
shall be deemed terminated on and as of the Closing Date.

          (m)  Sun and Orion agree that any indemnity or other
payment made under this Section 5.8 shall be treated by the parties
for all purposes as an adjustment to the consideration being
provided for the Common Stock hereunder (except to the extent
required by any taxing authority or to the extent that a portion of
such indemnity or other payment is treated as interest by reason of
Section 483 of the Code), and shall be allocated pro rata between
the Common Stock held by Sun and the Common Stock held by Phoenix.

          (n)  The obligations of Sun and Orion under this Section
5.8 relating to any Taxes or matters with respect thereto shall
survive until the lapse of the statute of limitations for the
assessment of such Tax or sixty (60) days after the final
administrative or judicial determination of such Tax and for a tax
for which McGee or its Subsidiaries are not primarily liable, the
later to occur of (a) the lapse of the statute of limitations for
the collection of such Tax or (b) sixty (60) days after the final 


                                - 36 -







<PAGE>
administrative or judicial determination that such tax is
collectable against Sun or its Subsidiaries; provided, however,
that any claim in respect of an obligation under this Section 5.8
asserted in writing prior to the lapse of the statute of
limitations or sixty days after the final administrative or
judicial determination shall continue to survive.  

          (o)  After the Closing, neither party shall have any
liability or obligation to the other for Taxes or matters with
respect thereto except pursuant to this Section 5.8.

                                VI.

                        AGREEMENTS WITH RESPECT
                           TO POOL OPERATION   
                         ----------------------



          Section 5.1  POOL PARTICIPATIONS; REINSURANCE.  Subject
to the occurrence of the Closing:

          (a) Effective as of 12:00 a.m. New York Time on January
1, 1995 (the "Pool Transfer Time") the participations of Marine and
Phoenix (or another Subsidiary of Sun which has capital and surplus
at least equal to that of Phoenix) in the U.S. Pool will be as
follows:

              (i)   as to all business with an inception date     
     during the period from the Pool Transfer Time through 12:00  
     p.m. New York Time on December 31, 1995 the aggregate and    
     individual interest of Marine and Phoenix as U.S. Pool       
     Participants shall be unchanged from the levels thereof set  
     forth in the definition of "Pool" in Article XI hereof except 
     to the extent set forth in the reinsurance agreement referred 
     to in Section 6.1(b);

              (ii)  as to all business with an inception date     
     during the period from 12:00 a.m. New York Time on January 1, 
     1996 until 12:00 p.m. New York Time on December 31, 1996 the 
     aggregate interest of Marine and Phoenix as Pool Participants 
     shall be not more than 22.5% of the U.S. Pool and not less   
     than 12% of the U.S. Pool, such aggregate interest (and the  
     individual interests of each of Marine and Phoenix, in each  
     case so long as it is a Subsidiary of Sun) to be determined by 
     Orion in its sole discretion and to be set forth in a written 


                                - 37 -






<PAGE>
     notice delivered by Orion to each of Marine and Phoenix not  
     later than October 31, 1995; and the interest of SICH, as a  
     U.S. Pool Participant in that year, shall not be less than the 
     aggregate interest of Marine and Phoenix as U.S. Pool        
     Participants in that year (determined as aforesaid) and SICH 
     shall (to the extent permitted by applicable laws and        
     regulations) retain net, and unreinsured, a participation at 
     least equal to such aggregate interest of Marine and Phoenix; 

              (iii)  as to all business with an inception date    
     during the period from 12:00 a.m. New York Time on January 1, 
     1997 until 12:00 p.m. New York Time on December 31, 1997, the 
     aggregate interest of Marine and Phoenix as Pool Participants 
     in respect of the U.S. Pool related to Participants in that  
     year shall be not more than 12% of the U.S. Pool and not less 
     than 6% of the U.S. Pool, such aggregate interest (and the   
     individual interests of each of Marine and Phoenix, in each  
     case so long as it is a Subsidiary of Sun) to be determined by 
     Orion in its sole discretion and to be set forth in a written 
     notice delivered by Orion to each of Marine and Phoenix not  
     later than October 31, 1996; and  the interest of SICH, as a 
     Pool Participant in respect of the U.S. Pool related to that 
     year, shall not at any time prior to December 31, 1997 be less 
     than the aggregate interest of Marine and Phoenix as Pool    
     Participants in respect of the U.S. Pool related to that year 
     (determined as aforesaid) and SICH shall (to the extent      
     permitted by applicable laws and regulations) retain net, and 
     unreinsured, a participation at least equal to such aggregate 
     interest of Marine and Phoenix; 

              (iv)  any "contingent" or "profit" commissions as   
     defined in the Pool Agreement otherwise due to McGee from any 
     of London, Marine or Phoenix in respect of the operations of 
     the Pool subsequent to the Pool Transfer Time and prior to   
     12:00 p.m. New York Time on December 31, 1997 shall not be   
     payable or paid by any of them; and

              (v)  Sun and Orion shall be liable for, and entitled 
     to share in, any contingent commissions payable to or from   
     McGee or from or to any reinsurer of Pool exposures in respect 
     of operations of the Pool prior to the Closing Date, such    
     sharing to be in proportion to the interest of each of London, 
     Marine, Phoenix and any other Subsidiary or former Subsidiary 
     of Sun and SICH as a Pool Participant during the year in     
     respect of which the reinsurance which shall have given rise 
     to the contingent commissions liability or entitlement was 

                                - 38 -






<PAGE>
     ceded (and assuming for purposes of this calculation that    
     there are no other Pool Participants), such proportional     
     allocations to be carried out separately in respect of the   
     U.S. Pool and the Canadian Pool; and 

              (vi)  as to all business with an inception date on or 
     after 12:00 a.m. New York Time on January 1, 1998 the        
     interest as Pool Participants of London, Marine and Phoenix in 
     respect of any Pool related to periods after that time       
     shall be as Orion and Sun shall have further agreed in writing 
     between them by not later than December 31, 1996.

          (b)  At the Closing, Phoenix will cede to SICH (which   
may, in turn, retrocede to one or more insurance Subsidiaries of
Orion (which, in turn, shall retain the same net and unreinsured
(except to the extent it may retrocede it to one or more other
Subsidiaries of Orion on the same basis) until December 31, 1997)
a further participation in the U.S. Pool equal to 7-1/2% of the
aggregate amount of all participations in the U.S. Pool pursuant to
a quota share retrocession agreement in the form attached as
Exhibit B, with respect to the period from 12:00 a.m. New York Time
on January 1, 1995 to 12:00 p.m. New York Time on December 31,
1995; and the interest of SICH as a U.S. Pool Participant, as
increased by the reinsurance agreement referred to in this Section
6.1(b) shall be 14.5%.  Effective with respect to all business
having an inception date during the period January 1, 1996 through 
December 31, 1997, SICH shall become and shall remain the "Clearing
Company" as defined in the Inter Office ReinsuranceAgreement
referred to in the definition of Pool Agreement for all purposes of
the U.S. Pool.

          (c) Effective as of the Pool Transfer Time, the
participations of London, Marine and SICH in the Canadian Pool will
be as follows:

              (i)  the aggregate percentage interest of London and 
     Marine, collectively as Pool Participants in the Canadian    
     Pool, with respect to business having an inception date during 
     the calendar year beginning at 12:00 a.m. New York Time on   
     January 1, 1995 shall be as set forth in the definition of   
     "Pool" in Article XI hereof, and with respect to business    
     having an inception date during the calendar year 1996 and   
     1997, respectively, shall be equivalent to the aggregate     
     percentage interests of Marine and Phoenix, collectively, as 
     Pool Participants in the U.S. Pool, with respect to such     
     respective years; 


                                - 39 -





<PAGE>
              (ii)  the percentage interest of SICH, as a Pool    
     Participant in the Canadian Pool, with respect to business   
     having an inception date during the calendar year 1995 shall 
     be 10% and for business having an inception date during the  
     calendar years 1996 and 1997 shall be at least equal to the  
     aggregate percentage interest of SICH, as a Pool Participant 
     in the U.S. Pool, with respect to such respective years;

              (iii)  SICH shall (to the extent permitted by       
     applicable laws and regulations) at all times retain net and 
     unreinsured (except to the extent that SICH may retrocede such 
     interest to one or more insurance Subsidiaries of Orion (which 
     in turn shall (subject to its right to retrocede such interest 
     to one or more other insurance Subsidiaries of Orion on the  
     same basis) retain the same net and unreinsured until December 
    31, 1997) a percentage interest as a Pool Participant in the  
    Canadian Pool at least equal to the aggregate percentage      
    interests of Marine and London for the respective calendar    
    years as provided above; and

              (iv)  as to all business with an inception date on or 
     after 12:00 a.m. New York Time on January 1, 1998, the       
     interests of London and Marine as Pool Participants in respect 
     of any Canadian Pool shall be as Orion and Sun may further   
     agree in writing between them by not later than December 31, 
     1996.

          Section 5.2  UNDERWRITING OPERATIONS OF THE POOL.

          (a)  From the date hereof through the Closing Date:

              (i)  Sun will cause McGee to use commercially       
     reasonable best efforts to conduct the underwriting operations 
     of the Pool in the ordinary course and in a manner consistent 
     with prior practice and otherwise in accordance with this    
     Agreement; and 

              (ii)  Sun will not, and will not cause or permit    
     McGee to, introduce or commence on behalf of the Pool or for 
     its account the offering of any new product or service or the 
     underwriting of any type of risk or any line of insurance not 
     currently written by or through the Pool.



                                - 40 -








<PAGE>

          (b) (i)  From and after the Closing and through 12:00
p.m. New York Time on December 31, 1996, McGee shall, and Orion
shall use commercially reasonable best efforts to cause McGee to,
manage the affairs of the Pool on behalf of the Pool Participants
and undertake on behalf of the Pool only such insurance risks as
shall in the judgment of McGee be appropriate and consistent with
prior practices of the Pool and otherwise be in accordance with
this Agreement and the Ancillary Agreements.  From and after the
Closing, pursuant to the Management Agreement referred to below,
Phoenix, London and Marine will issue such policies of insurance as
are placed by McGee on behalf of the Pool; provided that Orion
shall not cause or permit McGee to introduce or commence, on behalf
of the Pool, the offering of any new product or service or the
underwriting of any type of risk or any line of insurance not
written by or through the Pool prior to the Closing Date and
provided further that except as may be necessary to update and
maintain existing policy forms and filings, none of Phoenix, London
or Marine shall be obliged to file or qualify any new form of
policy.

              (ii)  At the Closing, Sun will cause each of Phoenix,
London, Sun Bermuda and Marine to enter into one or more Management
Agreements with McGee, McGee Bermuda or Wm. H. McGee & Co. of
Canada, Ltd., as appropriate in the form attached as Exhibit C.  In
the event that at any time during the term of the Management
Agreement Sun shall receive any notice or inquiry from any
insurance regulatory authority with respect to the Management
Agreement or Sun's participation as a party thereto, Sun shall give
prompt notice thereof to Orion and McGee.  Sun and McGee will use
their best efforts to cooperate in the resolution of any regulatory
issues which may exist and to that end (i) each may, in
coordination with the other, make formal and informal appearances
before and presentations to such regulatory authority and (ii) each
shall cooperate in good faith in negotiating changes necessary to
resolve any regulatory concern to the satisfaction of the
regulatory authority concerned.  In the event that such authority
shall determine that appropriate amendments are not possible and
that the Management Agreement must be terminated in light of the
facts and applicable law at the time of such determination then
Orion shall cause McGee to agree to the termination of the
Management Agreement within the time period required by such
regulatory authority.











<PAGE>

          (c)  Orion shall, or shall cause McGee to, deliver to Sun
a written business plan for the Pool for each of 1995 and 1996
which shall address in reasonable detail the topics set forth in
Schedule 6.2 and which shall be delivered, in the case of the 1995
business plan, not later than 60 days following the Closing and, in
the case of the 1996 business plan, not later than February 29,
1996.  At all times prior to December 31, 1997, Sun shall have the
right, at its own expense, to visit the headquarters office of
McGee at reasonable times and on a reasonable number of occasions
during normal business hours to discuss the business and affairs of
McGee with officers of McGee reasonably designated by McGee for
such purpose and to make copies of relevant corporate records;
provided that each of Orion and McGee shall have received at least
ten days' notice of each such visit.

          (d) From and after the Closing Date, Orion shall take,
and shall use commercially reasonable best efforts to cause McGee
and the insurance Subsidiaries of Orion to take, all steps
necessary to enable McGee to manage, after 12:00 p.m. New York Time
on December 31, 1995, the Pool in accordance with the business plan
of McGee.  To that end, Orion will proceed or will use commercially
reasonable best efforts to cause McGee and the Subsidiaries of
Orion to proceed, in a manner consistent with reasonable commercial
practice, to:

              (i)  form or acquire, if the same shall not         
     theretofore have been formed or acquired pursuant to Section 
     5.5, an insurance company organized and existing under the   
     laws of Bermuda and qualified to issue insurance policies of 
     a type and in a manner and amount consistent with prior      
     practices of Sun Bermuda; provided that Orion may, at its    
     election in its sole discretion, satisfy its obligation under 
     this clause (i) by acquiring from Sun at any time prior to   
     December 31, 1997 all of the outstanding capital stock of Sun 
     Bermuda pursuant to an Option Agreement in the form attached 
     as Exhibit D;

              (ii)  make with all necessary insurance regulatory  
     authorities such policy-form and rate filings as shall be    
     necessary so that one or more insurance Subsidiaries of Orion 
     is able to issue all forms of policies now being issued on   
     behalf of the Pool by one or more of London, Phoenix and     
     Marine; and



                                - 41 -






<PAGE>
              (iii)  reduce the gross direct written premiums of  
     Phoenix in respect of insurance policies issued for the U.S. 
     Pool and having an inception date during the separate periods 
     from July 1, 1995 to December 31, 1995, from January 1, 1996 
     to December 31, 1996 and from January 1, 1997 to December 31, 
     1997 to be in an amount less than five percent of the        
     policyholder surplus of Phoenix at December 31, 1994, December 
     31, 1995 and December 31, 1996, respectively.  For purposes of 
     the immediately foregoing provision, all gross direct written 
     premiums of Phoenix having inception dates during the period 
     July 1, 1995 through December 31, 1995 but attributable to   
     policies for which quotes were made by McGee prior to the    
     Closing shall be disregarded.

          (e)  From and after the Closing Date and until December
31, 1995 and 1996, respectively, Sun shall not take or allow
Phoenix to take any voluntary action to reduce policyholder surplus
of Phoenix to an amount less than $65,000,000 in the case of
December 31, 1995 and $50,000,000 in the case of December 31, 1996. 
From and after the Closing Date and until December 31, 1995, Sun
shall not take or allow Marine to take any voluntary action to
reduce policyholder surplus of Marine to an amount less than the
minimum amount required for Marine to be an authorized surplus
lines insurer in the State of Texas but not in an amount in excess
of $15,250,000.

          (f)  From and after the Closing Date, neither Sun nor any
Subsidiary or Affiliate of Sun shall have or threaten or assert any
claim against the Pool, or against McGee or any Subsidiary of McGee
in respect of the operation of the Pool subsequent to September 8,
1987 and prior to the Closing Date, except to the extent that such
person may be entitled to share in the experience of the Pool
during any year as set forth in the financial statements of the
Pool furnished to such person, and Sun shall indemnify and hold
each of Orion and McGee harmless from all losses, costs and
expenses (including but not limited to legal fees and all costs of
investigation and defense) incurred by either in the event any such
claim is threatened or asserted.

          (g)  At all times prior to December 31, 1997 McGee shall
maintain errors and omissions coverage in an amount not less than
$6,500,000 per occurrence and a deductible of not more than
$100,000 per occurrence with one or more insurers rated "A" or
better by A.M. Best Company; provided that any insurance Subsidiary
of Orion shall be presumed to be approved by Sun and provided 


                                - 42 -






<PAGE>
further that if the annual premiums for such coverage (pro-rated
for the period from the Closing Date to March 30, 1996) shall
exceed in the year beginning April 1, 1996, 103% of such 1994
premiums or in the year beginning April 1, 1997 shall be more than
106% of such 1995 premiums then McGee shall maintain coverage in
such amount and with such deductibles as may be obtained by McGee
within the premium-amount limits set forth above.

                                VII.

                      CONDITIONS TO OBLIGATIONS
                              OF ORION         
                       -------------------------


          The obligations of Orion under this Agreement are, at its
option, subject to the fulfillment, on or before the Closing Date,
of each of the following conditions precedent:

          Section 6.1  COVENANTS.  Sun and each Subsidiary of Sun
shall have performed and complied with all the terms, covenants and
conditions required by this Agreement to be performed or complied
with by Sun on or before the Closing Date, and Orion shall have
received from Sun, at the Closing, a certificate executed by an
officer of Sun to that effect, dated the Closing Date.

          Section 6.2  REPRESENTATIONS AND WARRANTIES.  The
representations and warranties made by Sun in this Agreement shall
be true and correct as of the Closing Date as though such
representations and warranties were made at and as of such time,
and Orion shall have received from Sun  one or more certificates,
dated the Closing Date, to that effect executed by one or more
officers of Sun.

          Section 6.3  ABSENCE OF LITIGATION AND REQUIRED
REGULATORY APPROVALS.  Every consent of or approval by any
governmental authority which is required in connection with the
transactions contemplated by this Agreement shall have been
obtained and be in full force and effect and there shall not be in
effect any injunction, writ, preliminary restraining order or any
order, ruling or request of any nature issued by a court or
governmental agency of competent jurisdiction directing that any
transactions provided for herein not be consummated as so provided
and no suit, action, proceeding or investigation shall be pending
or threatened before any court or governmental agency, which
relates to or asserts (i) the illegality of any of the transactions


                                - 43 -






<PAGE>
contemplated by this Agreement, or which seeks the restraint or
prohibition of the consummation of any of the transactions
contemplated by this Agreement or (ii) that material misleading
statements or omissions have been made in connection with the
consummation of any of the transactions contemplated by this
Agreement or (iii) a claim for damages in a material amount, or
other material relief against McGee or any of McGee's Subsidiaries,
or against Orion, if such claim shall arise from or relate to this
Agreement or the transactions contemplated hereby.

          Section 6.4  PREMERGER NOTIFICATION.  Any applicable
period of time necessary before the transactions contemplated
hereby can be consummated, as provided by the Hart-Scott-Rodino Act
or the Investment Canada Act, shall have expired, all required
clearances thereunder shall have been obtained and no action or
proceeding shall have been instituted by any of the Premerger
Notification Agencies or any similar agency claiming to have
jurisdiction for the purpose of enjoining or delaying the
consummation of the transactions contemplated hereby.

          Section 6.5  NO MATERIAL ADVERSE EFFECT.  Sun shall have
furnished to Orion a certificate of an officer of Sun to the effect
that no act, omission or event has occurred between the date hereof
and the Closing Date which could reasonably be expected to have a
Material Adverse Effect.

          Section 6.6  EMPLOYMENT AND CONSULTING AGREEMENTS.  McGee
shall have entered into an Agreement With Respect to Employment and
Unfair Competition dated the Closing Date and substantially in the
form of Exhibit E-1 with each of the key management employees of
McGee identified therein and one or more Consulting Agreements in
the form of Exhibit E-2 with the individuals identified therein. 
Such agreements shall not have been terminated, rescinded,
cancelled, revoked, amended, modified or superseded, and no agree-
ment or understanding to do any of the foregoing in the future
shall exist, nor shall there have been any breach of any term or
condition of either such agreement by any party thereto, whether or
not consented to or waived by the other party nor shall any act or
omission have occurred which with the passage of time or the giving
of notice or both would constitute a breach of either thereof.

          Section 6.7  MANAGEMENT AND REINSURANCE AGREEMENTS. 
Management and Reinsurance Agreements in the forms of Exhibits B
and C shall have been entered into and shall be in full force and
effect.

                                - 44 -







<PAGE>
Section   Unfair Competition and Confidentiality Agreements.  Sun,
Phoenix, Marine, London and Sun Bermuda shall have entered into an
Agreement With Respect to Confidentiality and Unfair Competition in
the form of Exhibit F.

          Section 6.8   OPINION OF COUNSEL FOR SUN AND MCGEE. 
Orion shall have received an opinion from Dewey Ballantine, special
counsel for Sun, with respect to matters relating to Sun, its
Subsidiaries and its and their obligations under this Agreement and
the other Opinion Documents referred to below, and (ii) an opinion
of John P. Iacono, Esq., Senior Vice President and General Counsel
of McGee, with respect to matters relating to McGee and its
Subsidiaries and their obligations under the Opinion Documents,
each dated the Closing Date, in the form attached as Exhibit 7.9
and in form and substance satisfactory to Orion and its counsel.

                                VIII.

                    CONDITIONS TO OBLIGATIONS OF SUN
                    ---------------------------------


          The obligations of Sun under this Agreement are, at its
option, subject to the fulfillment, on or before the Closing Date
of each of the following conditions precedent:

          Section 7.1  COVENANTS.  Orion shall have performed or
complied with all the terms, covenants and conditions required by
this Agreement to be performed or complied with by it on or before
the Closing Date, and Sun shall have received from Orion, at the
Closing, a certificate executed by an officer of Orion to that
effect, dated the Closing Date.

          Section 7.2  REPRESENTATIONS AND WARRANTIES.  The
representations and warranties made by Orion in this Agreement
shall be true and correct as of the Closing Date as though such
representations and warranties were made at and as of such time and
Sun shall have received from Orion a certificate, dated the Closing
Date, to that effect executed by an officer of Orion.

          Section 7.3  ABSENCE OF LITIGATION AND REQUIRED
REGULATORY APPROVALS.  Every consent of or approval by any
governmental authority which is required in connection with the
transactions contemplated by this Agreement shall have been
obtained and be in full force and effect and there shall not be in
effect any injunction, writ, preliminary restraining order or any 


                                - 45 -
         





<PAGE>
order, ruling or request of any nature issued by a court or
governmental agency of competent jurisdiction directing that any
transactions provided for herein not be consummated as so provided
and no suit, action, proceeding or investigation shall be pending
or threatened before any court or governmental agency, which
relates to or asserts (i) the illegality of any of the transactions
contemplated by this Agreement, or which seeks the restraint or
prohibition of the consummation of any of the transactions
contemplated by this Agreement or (ii) that material misleading
statements or omissions have been made in connection with the
consummation of any of the transactions contemplated by this
Agreement or (iii) a claim for damages in a material amount, or
other material relief against McGee or any of McGee's Subsidiaries,
or against Sun or any of its Subsidiaries, if such claim shall
arise from or relate to this Agreement or the transactions
contemplated hereby.

          Section 7.4  PREMERGER NOTIFICATION.  Any applicable
period of time necessary before the transactions contemplated
hereby can be consummated, as provided by the Hart-Scott-Rodino Act
or the Investment Canada Act, shall have expired, all required
clearances thereunder shall have been obtained and no action or
proceeding shall have been instituted by any of the Premerger
Notification Agencies or any similar agency claiming to have
jurisdiction for the purpose of enjoining or delaying the
consummation of the transactions contemplated hereby.

          Section 7.5  MANAGEMENT AND REINSURANCE AGREEMENTS. 
Management and Reinsurance Agreements in the forms of Exhibit B and
C shall have been entered into and shall be in full force and
effect.

          Section 7.6  OPINION OF COUNSEL FOR ORION.  Sun shall
have received an opinion of Donovan Leisure Newton & Irvine,
counsel for Orion, dated the Closing Date, in the form attached as
Exhibit 8.6 and in form and substance satisfactory to Sun and its
counsel.
 
                                IX.

                            TERMINATION
                            ------------

          Section 8.1  TERMINATION.  At any time prior to the
Closing Date, this Agreement may be terminated and the transactions
provided for herein abandoned, whether before or after adoption and
approval thereof by Sun and Orion:



                                - 46 -




<PAGE>
          (a)  by mutual written consent of the parties hereto;
  
          (b)  by Orion, if on the Closing Date any of the
conditions set forth in Article VII hereof shall not have been met;

          (c)  by Sun, if on the Closing Date any of the conditions
set forth in Article VIII hereof shall not have been met;

          (d)  by Sun or Orion, if the Closing shall not have
occurred on or before August 15, 1995.

          Section 8.2  EFFECT OF TERMINATION.  In the event of any
termination pursuant to this Article IX, the parties hereto shall
be released from all liabilities and obligations arising under this
Agreement with respect to matters contemplated by this Agreement,
other than for damages to the extent arising from a prior breach of
this Agreement and other than as provided in Section 5.1 (last
sentence only), 12.1 and 12.8.

          Section 8.3  CONDUCT FOLLOWING TERMINATION.  If this
Agreement is terminated pursuant to Section 9.1(b) or Section
9.1(d), until a date ninety days after such termination, Sun will
not, nor will it cause, direct or authorize its Subsidiaries or any
officers, directors, affiliates, employees or agents of Sun or any
Subsidiaries of Sun to, initiate, solicit or engage in negotiations
or discussions with any third party for the purpose of assisting,
inducing or soliciting such party to make a proposal for or in
respect of (i) any offer to purchase, or any invitation to tender
for purchase, any or all of the capital stock of McGee or any
Subsidiary of McGee; (ii) any proposed merger or other form of
business combination with McGee or any Subsidiary of McGee; or
(iii) any purchase of any substantial asset or liability of McGee
or any Subsidiary of McGee or any interest in any substantial asset
or liability of McGee or any Subsidiary of McGee or provide
information to any third party in respect of or in furtherance of
such a proposal and will notify Orion promptly if any solicitations
are received subsequent to the date hereof with respect to any such
proposal.






                                - 47 -









<PAGE>
                                X.

                       AMENDMENT; WAIVERS
                       --------------------

          Section 9.1  AMENDMENTS, MODIFICATIONS, ETC.  At any time
prior to the Closing, this Agreement and the Exhibits hereto may be
amended, modified, superseded or supplemented to the extent
permitted by applicable law only by an instrument in writing
executed and delivered on behalf of each of the parties hereto,
which instrument when so executed and delivered shall thereupon
become a part of this Agreement and the provisions thereof shall be
given effect as if contained in this Agreement as of the date
hereof.

          Section 9.2  WAIVERS.  The representations, warranties,
covenants and conditions of this Agreement may be waived only by a
written instrument executed by the party so waiving.  The failure
of any party at any time or times to require performance of any
provision hereof shall not affect the right of such party at a
later time to enforce the same.  No waiver by any party of any
condition, or breach of any term, covenant, agreement,
representation or warranty contained in this Agreement, in any one
or more instances, shall be deemed to be or construed as a waiver
of any other condition or of the breach of any other term,
covenant, agreement, representation or warranty contained in this
Agreement.

                                XI.

                          DEFINED TERMS
                          --------------

          When used as defined terms in this Agreement, the
following terms shall have the meanings set forth herein:

          "ACCREDITED INVESTOR" shall have the meaning given to it
in Section 4.6.

          "ANCILLARY AGREEMENTS" shall mean the Management
Agreements, the Reinsurance Agreements, and the Agreement with
Respect to Confidentiality and Competition in the respective forms
attached as Exhibits hereto.

          "BENEFIT PLAN" shall have the meaning set forth in
Section 3.14.


                                - 48 -







<PAGE>

          "BERMUDA MANAGEMENT AGREEMENT" shall have the meaning set
forth in Section 5.5.

          "COMMON STOCK" shall have the meaning set forth in the
third recital paragraph.

          "CLOSING" shall each have the meaning set forth in
Section 2.1.

          "CLOSING DATE" shall have the meaning set forth in
Section 2.1.

          "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

          "CONSOLIDATED GROUP" shall have the meaning set forth in
Section 3.11(a).

          "EMPLOYMENT CONTINUATION AGREEMENTS" shall mean and
include the ag reements, forms of which are attached as Exhibit
E-1.

          "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.

          "ERISA AFFILIATE" shall have the meaning set forth in
Section 3.14.

          "HART-SCOTT-RODINO ACT" shall have the meaning set forth
in Section 5.4.

          "IRS" shall mean the Internal Revenue Service.

          "LONDON" shall mean the Canadian Branch of The London
Assurance, an English corporation.  

          "MANAGEMENT AGREEMENT" shall mean the Bermuda Management
Agreement and the management agreements referred to in Section
6.2(b).

          "MARINE" shall mean Marine Indemnity Insurance Company of
America, a New York corporation.


                                - 49 -








<PAGE>
          "MATERIAL ADVERSE EFFECT" shall have the meaning set
forth in Section 3.1.

          "MCGEE" shall mean Wm. H. McGee & Co., Inc., a New York
corporation.

          "MCGEE BERMUDA" shall have the meaning set forth in
Section 5.5.

          "NEW YORK TIME" shall mean time, whether Eastern Standard
or Daylight Saving as may be the case, as determined in the City of
New York.

          "ORION" shall mean Orion Capital Corporation, a Delaware
corporation.

          "PBGC" shall mean the Pension Benefit Guaranty
Corporation.

          "PHOENIX" shall mean Phoenix Assurance Company of New
York, a New Hampshire corporation. 

          "POOL" shall mean those insurance underwriting and
management arrangements which have been in effect from time to time
between and among one or more of McGee, Wm. H. McGee & Co. of
Canada Ltd. and Wm. H. McGee & Co. (Bermuda) Ltd. and the insurers
participating in such arrangements as set forth in the Pool
Agreements and among them, the present participants in the Canadian
Pool and United States Pool being as follows:


UNITED STATES POOL                        CANADIAN POOL
POOL PARTICIPANTS                %        POOL PARTICIPANTS              %
--------------------                      -------------------
 
Phoenix                        45%         London                    35.0%

Taisho Marine & Fire
Insurance Co. of America     15.0%         Marine                    28.5%


Marine                        7.5%         Providence Washington
                                           Insurance Company         15.0%

Continental Casualty
Company (CNA)                 7.5%         SICH                      15.0% 
 
SICH                          7.0%         Mitsui Marine and Fire     6.5% 
                                           Insurance Company

 

                                     - 50 -


                                



<PAGE>

UNITED STATES POOL                        CANADIAN POOL
POOL PARTICIPANTS                %        POOL PARTICIPANTS            %
--------------------                      -------------------

The Providence Washington
Insurance Company             7.0%

Lucky Insurance Company,
Ltd. (United States Branch)   6.0%

The Baloise Insurance Co.
of America                    5.0%



     Each reference to the "Pool" shall, unless the context       
     otherwise requires, be deemed to include both the Canadian   
     Pool and the United States Pool and each annual renewal of the 
     Pool so long as there shall be outstanding assets or         
     liabilities of the Pool in respect of that year and shall    
     further be deemed to include the participation of the Pool   
     Participants in the Syndicates.

          "POOL AGREEMENTS" means (i) the Inter-Office Reinsurance
Agreement dated as of January 1, 1975, as amended by the related
Addenda Nos. 1-4 and supplemented by annual Schedules of
Participations thereto, among McGee and the Pool Participants (the
"Inter-Office Reinsurance Agreement"), and (ii) the Underwriting
Management Agreements, General Agency & Management Agreements,
Management Agreements and related Ancillary Agreements, each as
amended, between or among McGee and the Pool Participants, which
are listed in Schedule 3.15 as being entered into in connection
with the Pool. 

          "POOL PARTICIPANTS" shall mean those insurers and
reinsurers who, from time to time, have participated or may
participate in the Pool in respect of any year.

          "POOL TRANSFER TIME" shall have the meaning set forth in
Section 6.1.

          "PREMGERGE NOTIFICATION AGENCIES" shall have the meaning
set forth in Section 5.4.

          "REINSURANCE AGREEMENT" shall mean the quota share
retrocession agreement referred to in Section 6.1(b).



                                - 51 -





<PAGE>
          "SICH" shall mean Security Insurance Company of Hartford,
a Connecticut corporation and a wholly owned Subsidiary of Orion.

          "SUBSIDIARY"  means any corporation of which a
corporation or one or more Subsidiaries of such corporation owns or
controls, directly or indirectly, more than fifty percent (50%) of
the outstanding stock having by its terms ordinary voting power to
elect a majority of the Board of Directors of such corporation,
irrespective of whether or not at the time stock of any one class
or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency.

          "SUN" shall mean Sun Alliance USA Inc., a New York
corporation.

          "SUN BERMUDA" shall mean Sun Insurance Company (Bermuda)
Limited, a Bermuda corporation and an affiliate of Sun.

          "SUN'S KNOWLEDGE" shall mean, when used to qualify a
representation or warranty of Sun, that such is being made or given
only on the basis of and to the extent of the knowledge of Sun and
its officers and directors, reasonable inquiry having been made by
them or on their behalf in respect of the subject matter of the
representation or warranty. 

          "SYNDICATES" shall mean and include the American Hull
Syndicate, the Water Quality Insurance Syndicate, the American
Offshore Syndicate and the other insurance and reinsurance
syndicates listed in Schedule 11 hereto.

          "TAXES" shall have the meaning set forth in Section
3.11(a).

          "TAX RETURN" shall have the meaning set forth in Section
3.11(a).


                                XII.

                      MISCELLANEOUS PROVISIONS
                      -------------------------

          Section 11.1  EXPENSES.  Whether or not the Closing shall
have occurred and regardless of whether this Agreement is
terminated, each party hereto shall pay all of the costs and
expenses incurred by it in connection with this Agreement and the 



                                - 52 -





<PAGE>
other transactions contemplated hereby (including, without
limitation, disbursements and expenses of its attorneys,
accountants and advisors, and printing and filing costs and fees).

          Section 11.2  NOTICES.  All notices or other
communications required or permitted under this Agreement shall be
in writing and sufficient if delivered personally or sent by
confirmed telecopy or by registered or certified mail, postage
prepaid, addressed as follows:

          If to Orion, to

               Orion Capital Corporation
               600 Fifth Avenue
               New York, New York 10020-2302
               Attn:  Treasurer
               Fax:  (212) 247-4824

          with a copy to

               Donovan Leisure Newton & Irvine
               30 Rockefeller Plaza
               New York, N.Y.  10112
               Attn:  John J. McCann, Esq.
               Fax:  (212) 632-3315

          If to Sun or to McGee, to

               Sun Alliance USA Inc.
               10 East 50th Street
               27th Floor
               New York, New York  10022
               Attn:  John A. Moore
                      President
               Fax:  (212) 753-8552

          with copies to

               Dewey Ballantine
               1301 Avenue of the Americas
               New York, N.Y.  10019-6092
               Attn:  James A. FitzPatrick, Jr., Esq.
               Fax:  (212) 259-6333




                                  - 53 -






<PAGE>
Any party may change the person and addresses to which notices or
other communications are to be sent to it by giving written notice
of any such change in the manner provided herein for giving notice.

          Section 11.3  ENTIRE AGREEMENT.  This Agreement, together
with the schedules and exhibits hereto and the documents and
instruments referred to herein, sets forth the entire agreement and
understanding of the parties hereto in respect of the transactions
contemplated hereby, and supersedes all prior agreements,
arrangements and understandings relating to the subject matter
hereof.  No party hereto has relied upon any oral or written
statement, representation, warranty, covenant, condition,
understanding or agreement made by any other party or any
representative, agent or employee thereof, except for those
expressly set forth in this Agreement or in the schedules or
exhibits hereto or the documents or instruments referred to herein.

          Section 11.4  NO ASSIGNMENT.  This Agreement shall inure
to the benefit of, and be binding upon, the respective successors
and assigns of the parties hereto.  No assignment of any rights or
delegation of any obligations provided for herein shall be made by
any party hereto without the express prior written consent of each
other party except that Orion may assign its rights (but not
delegate its duties except as permitted herein) hereunder to any
wholly-owned Subsidiary of Orion.

          Section 11.5  SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND COVENANTS.  All representations and warranties of the parties
hereto which are contained in this Agreement shall remain operative
and in full force and effect until December 31, 1997, regardless of
any investigation made by or on behalf of any of the parties
hereto, following the Closing.  Notwithstanding anything herein to
the contrary, neither party hereto shall be liable to the other (or
any affiliate thereof) for any damages, liabilities, losses, costs
or other obligations arising from any inaccuracy or breach of any
representation or warranty or breach or nonfulfillment of any
covenant or agreement hereunder unless and until the aggregate
amount of all such damages, liabilities, losses, costs or other
obligations exceeds $500,000 in which event such party shall be
liable to the other for the full amount thereof, up to a maximum
aggregate payment of $22,000,000, except that liability described
in Section 5.7(d) of this Agreement shall not be subject to such
maximum aggregate payment.  This Section 12.5 shall not apply to
Taxes or matters with respect thereto, which shall be governed
exclusively under Section 5.8.



                                - 54 -





<PAGE>
          Section 11.6  GOVERNING LAW.  This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York applicable to agreements made and to be performed
entirely within such State, except (a) matters related to the
validity of corporate action, which shall be governed by the laws
of the state or other jurisdiction of incorporation of the relevant
corporation and (b) matters related to compliance of the
transactions contemplated by the Agreement with applicable
insurance regulatory statutes.

          Section 11.7  DISPUTE RESOLUTION.  If a dispute arises
out of or relates to this Agreement, or the performance or an
asserted breach thereof, the parties agree first to try in good
faith to settle the dispute and further agree that, to that end:

          (a)  A meeting shall be held promptly between Orion  and
Sun attended by individuals with decision-making authority
regarding the dispute, to attempt in good faith to negotiate a
resolution of the dispute.

          (b)  If within fifteen days of the first meeting of such
individuals they have not succeeded in negotiating a resolution of
the dispute or agreed to extend the time within which to do so, the
parties agree to submit the dispute to mediation in accordance with
the Commercial Mediation Rules of the American Arbitration
Association.  Orion and Sun shall bear their own costs and share
equally the costs of the mediation.

          (c)  Orion and Sun will jointly appoint a mutually-
acceptable mediator, seeking assistance in such regard from the
American Arbitration Association if they have been unable to agree
on such appointment within a period of twenty days from the
conclusion of the negotiation period.

          (d)  The parties agree to participate in good faith in
the mediation, and negotiations related thereto or arising
therefrom, for a period of 30 days after appointment of a mediator. 
If the parties are not successful in solving the dispute through
mediation within that period of time (or, if sooner, within 60 days
from the conclusion of the negotiation period), then the dispute
shall be resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, with
each of Orion and Sun selecting one arbitrator of a panel of three
and the two arbitrators so selected designating the third member of
the panel of arbitrators.  In the event that such two arbitrators 



                                - 55 -





<PAGE>
cannot agree on a third arbitrator within thirty days, one shall be
designated by the American Arbitration Association upon application
by either of the two arbitrators.  The decision of the arbitrators
shall be binding upon the parties and judgment upon the award
entered by the arbitrators may be entered in any court having
jurisdiction thereof.  Orion and Sun shall each bear its own costs
and the costs of the arbitrator appointed by each of them and they
shall share equally the costs of the third arbitrator and the
administrative costs of the arbitration.

          Section 11.8  PRESS RELEASES.  Orion and Sun will each
consult with the other in advance of making any public announcement
or press release, releasing any publicity or otherwise disclosing
any information related to the execution of this Agreement or any
transactions contemplated hereby, and each of Orion and Sun will
obtain the consent of the other with respect to the form, content
and timing thereof, which consent shall not unreasonably be
withheld, except in the case of such disclosure as may be required
by applicable law or securities exchange requirements.

          Section 11.9  COUNTERPARTS.  This Agreement may be
executed in any number of separate counterparts, each of which
shall be deemed to be an original, but which together shall
constitute one and the same instrument.

          Section 11.10  HEADINGS.  The section and article
headings contained in this Agreement are inserted for convenience
of reference only and shall not affect the meaning or
interpretation of this Agreement.

















                                - 56 -







<PAGE>
          IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed on the date first above written.

                              ORION CAPITAL CORPORATION


                              By: 
                                  -----------------------


Attest:


By:
   -----------------
   Secretary

                     

                              SUN ALLIANCE USA INC.


                              By:
                                  --------------------

Attest:


By:
   -----------------
   Secretary




















                                - 57 -






<PAGE>
                                                        EXHIBIT B


               QUOTA SHARE RETROCESSION AGREEMENT

                             BETWEEN

            MARINE INDEMNITY INSURANCE COMPANY OF AMERICA

                (Hereinafter called the "Reinsured")

                                AND

               SECURITY INSURANCE COMPANY OF HARTFORD

             (Hereinafter called the "Retrocessionaire")



          In consideration of the premium and terms and conditions
hereinafter set forth, the parties hereto agree as follows:

                             ARTICLE I
                             ---------


Business Covered:
-----------------

          The Reinsured obligates itself to cede to the
Retrocessionaire and the Retrocessionaire obligates itself to
accept as reinsurance from the Reinsured, a 16 2/3% quota share
interest of the Reinsured's Net Retention, as hereinafter defined,
of its 45% participation of insurance or reinsurance, or other
evidences of liability ceded or retroceded to the Reinsured under
the Wm. H. McGee & Co., Inc. Inter-Office Reinsurance Agreement
("Inter-Office Reinsurance Agreement").  

Net Retention:
-------------

          The term Net Retention shall mean the gross amount of the
Reinsured's liabilities and obligations on insurance and
reinsurance assumed under the Inter-Office Reinsurance Agreement
less any reinsurance effected by Wm. H. McGee & Co., Inc. on behalf
of the Inter-Office Reinsurance Pool or by the Reinsured.  It is
also understood and agreed that this Agreement shall apply to the
Reinsured's Net Retention after deduction of all per risk
reinsurances.

                                






<PAGE>
                                ARTICLE II
                                ----------


Commencement and Termination:
----------------------------

          This Agreement shall take effect 12:01 a.m. Eastern
Standard Time, January 1, 1995 [and shall apply to all losses
occurring on and after this date in respect of new and renewal
business written on and after this date.] or [and shall apply to
all risks attaching on or after that date regardless of the date of
the issue of the insurance policy or policies concerned.]  This
Agreement shall remain in force and effect until 12:00 p.m. Eastern
Standard Time, December 31, 1995 at which time it shall
automatically terminate without any notice required by the parties
hereto.

Special Termination:
-------------------

          It is especially understood and agreed that should at any
time the Reinsured or the Retrocessionaire lose the whole or part
of its paid up capital, become insolvent, or be placed in
conservation, rehabilitation or liquidation, or have a receiver
appointed, or be acquired or controlled by, merged with, or
reinsure its entire business with any other company or corporation,
the other party shall have the right to terminate this Agreement
forthwith upon the giving of (30) thirty days notice in writing,
which shall be in accordance with the termination provisions of
this Article.

          If any law or regulation of the federal or state or local
government of any jurisdiction in which the Company is doing
business shall render illegal the arrangements made in this
Agreement, the Agreement can be terminated immediately insofar as
it applies to such jurisdiction by the Reinsured giving notice to
the Retrocessionaire to such effect.

                             ARTICLE III
                             ------------

Territory:
----------

          The liability of the Retrocessionaire under this
Agreement shall be limited to losses in connection with property
located in the United States of America, its territories,
possessions, dependencies, Puerto Rico and Canada, except that the
Retrocessionaire's liability shall also apply to properties, 


                                - 2 -





<PAGE>
wherever located, which are protected under extraterritorial
provisions of the Company's original contracts.

                                ARTICLE IV
                                ----------

Exclusions:
----------

          This Agreement does not cover:

          1.  Life, Accident and Health and all Casualty business
including Third Party Bodily Injury Liability and Medical Payments;

          2.  Loss under Third Party Property Damage Liability
Coverage, except Legal Liability pursuant to a care, custody or
control exposure such as, but not limited to, Warehousemen's Legal
Liability, Garagekeeper's Legal Liability and Fire Legal Liability;

          3.  Fidelity and Surety, except when written as part of
and included as an incidental part of Multiple Peril Policies;

          4.  Hail and/or Rain on growing, standing and/or drying
crops;

          5.  War, as per North American War Exclusion Clause;

          6.  Offshore Oil and Gas Drilling Rigs;

          7.  Livestock Mortality;

          8.  Aviation business, including satellites, but not to
exclude land transit or temporary location risks on aircraft hulls
when covered under Inland Marine Transportation policies, nor
location coverage on aircraft stocks and parts;

          9.  Financial Guarantee which shall for the purpose of
this Agreement be construed to mean policies guaranteeing payment
of indebtedness, insolvency or financial credit;

          10. Residual Value Insurance;

          11. Flood and Earthquake, except when written in
conjunction with other perils;



                                - 3 -








<PAGE>
          12. Nuclear Incidents as per the following clauses:

          -Nuclear Incident Exclusion Clauses - Physical Damage -
Reinsurance, U.S.A. and Canada;

          -Nuclear Incident Exclusion Clauses - Physical Damage and
Liability (Boiler and Machinery Policies) Reinsurance - U.S.A. and
Canada;

          -Nuclear Energy Risks Exclusion Clause (Reinsurance) 1984
(Worldwide, excluding U.S.A. and Canada);

          13. Treaty Reinsurance Assumed;

          14. Insolvency Funds as per Insolvency Funds Exclusion
Clause attached hereto; and

          15. See page and Pollution as per I.S.O. Exclusion Clause
or so deemed.

                                ARTICLE V
                                ----------


Premium:
-------

          The Retrocessionaire shall receive its share of the net
premiums received by the Reinsured after deductions for all
brokerage and/or Agency and/or General Agency commissions paid or
payable, any contingent or profit commissions paid or payable to
Agents and Reinsured's General Agents, any overriding commission
payable to the Reinsured's manager and any contingent or profit
commission upon the net profits payable to the Reinsured's manager.

                                ARTICLE VI
                                ----------


Follow the Fortunes:
--------------------

          The Retrocessionaire shall be subject to the same
conditions as the original insurance and reinsurance policies and
shall follow, subject to the terms of this Agreement, the fortunes
of the Reinsured in respect of all business ceded hereunder.  The
Reinsured shall not be prejudiced in any way by any involuntary
omission, delay or error, it being understood that such omission,
delay or error shall be corrected as soon as possible.


                                - 4 -






<PAGE>
                                ARTICLE VII
                                ------------


Accounts:
--------

          The Reinsured shall render an account for all business
written as nearly as possible on the twentieth day of each month
for the preceding month's business and shall remit balances due the
Retrocessionaire not later than 90 days from the close of the month
in which the business is written.

          The Reinsured shall likewise render an account for all
loss settlements, reinsurance recoveries due thereon as well as
salvages, refunds and/or other recoveries.  All accounts and
settlements between the parties shall be made in U.S. Dollars.

          Remittances or settlements are not to prejudice the right
of the Reinsured to charge back to the Retrocessionaire any premium
or other credits made by the Reinsured's manager which may prove
uncollectible for any reason.

                              ARTICLE VIII
                              -------------


Claims, Taxes and Other Expenses:
--------------------------------

          The Retrocessionaire shall pay its proportionate share of
all (i) losses and/or loss adjustment expenses as well as legal or
other expenses in connection with the adjustment or resistance of
claims (ii) expenses charged by Reinsured's manager in the handling
of claims and for inspection, survey or audit of insureds records;
and (iii) premium and franchise taxes payable by the Reinsured to
any municipal, provincial, state, federal or regulatory authority.

          It is understood and agreed that in consideration of the
terms under which this Agreement is issued, the Reinsured
undertakes not to claim any deduction with respect to the premium
hereon when making premium tax returns to the appropriate tax
authorities.



 

           

    
                                - 5 -






<PAGE>
                                ARTICLE IX
                                -----------


Seven Year Roll-Over:
--------------------

          The Retrocessionaire agrees to assume responsibility for
its share of unearned premiums, outstanding and incurred but not
reported losses recorded by the Reinsured for a period of seven (7)
years following the close of the Accounting Year in which the
premiums were written.  At that point any balance of premiums or
losses are to be transferred and distributed by the Reinsured's
Managers under a Reinsurance Portfolio arrangement among the
companies who are then members of the Manager's Group during the
succeeding Accounting year.

                                ARTICLE X
                                ----------


Insolvency:
----------

          In the event of the insolvency of the Reinsured, this
Reinsurance shall be payable by the Retrocessionaire directly to
the Company or its liquidator, receiver, conservator or statutory
successor on the basis of the liability of the Reinsured without
diminution because of the insolvency of the Reinsured or because
the liquidator, receiver, conservator or statutory successor of the
Reinsured has failed to pay all or a portion of any claim.

          It is agreed, however, that the liquidator, receiver,
conservator or statutory successor of the Reinsured shall give
written notice to the Retrocessionaire of the pendency of a claim 
against the insolvent Reinsured indicating the policy or bonds
reinsured which claim would involve a possible liability on the
part of the Retrocessionaire within a reasonable time after such
claim is filed in the conservation or liquidation proceeding or in
the receivership and that during the pendency of such claim, the
Retrocessionaire may investigate such claim and interpose, at its
own expense, in the proceeding where such claim is to be
adjudicated, any defense or defenses which it may deem available to
the Reinsured or its liquidator, receiver, conservator or statutory
successor.  The expense thus incurred against the insolvent
Reinsured as part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to the
Reinsured solely as a result of the defense undertaken by the
Retrocessionaire.

          
                                - 5 -





<PAGE>

          The reinsurance under this Agreement shall be payable by
the Retrocessionaire directly to the Reinsured, or to its
liquidator, receiver, conservator or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except
(a) where the agreement specifically provides another payee of such
reinsurance in the event of the insolvency of the Company and (b)
where the Retrocessionaire with the consent of the direct insured
or insureds and with the prior approval of the Superintendent of
Insurance of the State of New York to the certificate of assumption
on New York risks has assumed such policy obligations of the
Reinsured as direct obligations of the Retrocessionaire to the
payees under such policies and in substitution for the obligations
of the Reinsured to such payees.

                                ARTICLE XI
                                -----------


Arbitration:
------------

          As a precedent to any right of action hereunder, if any
differences shall arise between the contracting parties with
reference to the interpretation of this Agreement or their rights
with respect to any transaction involved, whether arising before or
after termination of this Agreement, such differences shall be
submitted to arbitration upon the written request of one of the
contracting parties.

          Each party shall appoint an arbitrator within thirty days
of being requested to do so, and the two named shall select a third
arbitrator before entering upon the arbitration.  If either party
refuses or neglects to appoint an arbitrator within the time
specified, the other party may appoint the second arbitrator.  If
the two arbitrators fail to agree on a third arbitrator within
thirty days of their appointment, each of them shall name three
individuals, of whom the other shall decline two, and the choice
shall be made by drawing lots.  All arbitrators shall be active or
retired disinterested officers of insurance or reinsurance
companies or Underwriters at Lloyd's, London not under the control
of either party to this Agreement.

          Each party shall submit its case to its arbitrator within
thirty days of the appointment of the third arbitrator or within
such period as may be agreed by the arbitrators.  All arbitrators
shall interpret this Agreement as an honorable engagement rather 




                                - 6 -




<PAGE>
than as merely a legal obligation.  They 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 Agreement in a reasonable manner rather
than in accordance with a literal interpretation of the language.

          The decision in writing of any two arbitrators, when
filed with the contracting parties, shall be final and binding on
both parties.  Judgment upon the award rendered may be entered in
any Court having jurisdiction thereof.  Each party shall bear the
expense of its own arbitrator and shall jointly and equally bear
with the other party the expense of the third arbitrator and of the
arbitration.  In the event that two arbitrators are chosen by one
party as above provided, the expense of the arbitrators and the
arbitration shall be equally divided between the two parties.  Any
arbitration shall take place in the city in which the ceding
Company's Head Office is located unless some other place is
mutually agreed upon by the contracting parties.

                              ARTICLE XII
                              -----------

Alterations:
-----------

          1.  This Agreement may be altered at any time by mutual
consent of the parties either by Addendum or by correspondence. 
Such Addendum or correspondence shall be deemed to form an integral
part of this Agreement.

          2.  This Agreement may be executed in any number of
copies each of which shall be deemed to be an original and shall be
binding upon all parties.














                                - 7 -







<PAGE>
          IN WITNESS WHEREOF the parties have executed this
Agreement this       day of                   , 1995.


                          MARINE INDEMNITY INSURANCE COMPANY 
                          OF AMERICA



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


                          SECURITY INSURANCE COMPANY OF HARTFORD



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