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                                                                 Exhibit 10.18



                             2001 STOCK OPTION PLAN

                       NONQUALIFIED STOCK OPTION AGREEMENT

         This AGREEMENT (the "OPTION AGREEMENT") is made by and between SCOTTISH
ANNUITY & LIFE HOLDINGS, LTD., a Cayman Islands company (the "COMPANY") and the
Optionee stated in the attached Notice of Grant of Stock Options and Option
Agreement ("Notice of Grant").

1.       GRANT OF SHARE OPTION. Subject to and upon the terms, conditions, and
         restrictions set forth in this Option Agreement, the Company hereby
         grants to the Optionee a stock option (the "Option") to purchase the
         Company's Ordinary Shares (the "Optioned Shares"). The Option may be
         exercised from time to time in accordance with the terms of this Option
         Agreement. The price at which the Optioned Shares may be purchased
         pursuant to this Option is as stated in the attached Notice of Grant
         and is subject to adjustment as hereinafter provided (the "Option
         Price"). The Option is intended to be a nonqualified stock option and
         shall not be treated as an "incentive stock option" within the meaning
         of that term under Section 422 of the Code, or any successor provision
         thereto.

2.       TERM OF OPTION. The term of the Option shall commence on the date set
         forth on the attached Notice of Grant (the "Date of Grant") and, unless
         earlier terminated in accordance with Section 6 hereof, shall expire
         TEN (10) YEARS from the Date of Grant.

3.       RIGHT TO EXERCISE. Subject to expiration or earlier termination, on
         each anniversary of the Date of Grant the number of Optioned Shares
         equal to Twenty percent (20 %) multiplied by the initial number of
         Optioned Shares specified in this Agreement shall become exercisable on
         a cumulative basis until the Option is fully exercisable. To the extent
         the Option is exercisable, it may be exercised in whole or in part. In
         no event shall the Optionee be entitled to acquire a fraction of one
         Optioned Share pursuant to this Option. The Optionee shall be entitled
         to the privileges of ownership with respect to Optioned Shares
         purchased and delivered to him upon the exercise of all or part of this
         Option.

4.       TRANSFERABILITY. The Option granted hereby is NOT transferable by the
         Optionee.

5.       NOTICE OF EXERCISE; PAYMENT.

         (a)      To the extent then exercisable, the Option may be exercised by
                  written notice to the Company stating the number of Optioned
                  Shares for which the Option is being exercised and the
                  intended manner of payment. The date of such notice shall be
                  the exercise date. Payment equal to the aggregate Option Price
                  of the Optioned Shares being exercised shall be tendered in
                  full with the notice of exercise to the Company in cash in the
                  form of currency or check or other cash equivalent acceptable
                  to the Company. The requirement of payment in cash shall be
                  deemed satisfied if, with the consent of the Board, the
                  Optionee makes arrangements that are satisfactory to the
                  Company with a broker that is a member of the National
                  Association of Securities Dealers, Inc. to sell a sufficient
                  number

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                  of Optioned Shares which are being purchased pursuant to the
                  exercise, so that the net proceeds of the sale transaction
                  will at least equal the amount of the aggregate Option Price,
                  and pursuant to which the broker undertakes to deliver to the
                  Company the amount of the aggregate Option Price not later
                  than the date on which the sale transaction will settle in the
                  ordinary course of business. The Optionee may also, with the
                  consent of the Board, tender the Option Price by a combination
                  of the foregoing methods of payment.

         (b)      Within ten (10) days after notice, the Company shall direct
                  the due issuance of the Optioned Shares so purchased.

         (c)      As a further condition precedent to the exercise of this
                  Option, the optionee shall comply with all regulations and the
                  requirements of any regulatory authority having control of, or
                  supervision over, the issuance of Ordinary Shares and in
                  connection therewith shall execute any documents which the
                  Board shall in its sole discretion deem necessary or
                  advisable.

6.       TERMINATION OF AGREEMENT. The Option Agreement and the Option granted
         hereby shall terminate automatically and without further notice on the
         earliest of the following dates:

         (a)      Two (2) years after the Optionee's death if the Optionee dies
                  while in the employ of the Company or its Subsidiaries;

         (b)      Two (2) years after the date of the Optionee's permanent and
                  total disability if the Optionee becomes permanently and
                  totally disabled while an employee of the Company or its
                  Subsidiaries;

         (c)      Except as provided on a case-by-case basis, 60 days after the
                  date the Optionee ceases to be an employee of the Company, or
                  a Subsidiary, for any reason other than as described in this
                  Section 6; or

         (d)      TEN (10) YEARS from the Date of Grant.

In the event that the Optionee's employment is terminated for cause, the Option
Agreement shall terminate at the time of such termination notwithstanding any
other provision of this Option Agreement. For purposes of this provision,
"cause" shall mean the Optionee shall have committed prior to termination of
employment any of the following acts:

                  (i)      an intentional act of fraud, embezzlement, theft, or
                           any other material violation of law in connection
                           with the Optionee's duties or in the course of the
                           Optionee's employment;

                  (ii)     intentional wrongful damage to material assets of the
                           Company or its Subsidiaries;

                  (iii)    intentional wrongful disclosure of material
                           confidential information of the Company or its
                           Subsidiaries;

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                  (iv)     intentional wrongful engagement in any competitive
                           activity that would constitute a material breach of
                           the duty of loyalty; or

                  (v)      intentional breach of any stated material employment
                           policy of the Company or its Subsidiaries.

Any determination of whether an Optionee's employment was terminated for cause
shall be made by the Board, whose determination shall be binding and conclusive.
This Option Agreement shall not be exercisable for any number of Optioned Shares
in excess of the number of Optioned Shares for which this Option Agreement is
then exercisable, pursuant to Sections 3 and 7 hereof, on the date of
termination of employment. For the purposes of this Option Agreement, the
continuous employment of the Optionee with the Company shall not be deemed to
have been interrupted, and the Optionee shall not be deemed to have ceased to be
an employee of the Company, by reason of the transfer of his employment among
the Company and its Subsidiaries or a leave of absence approved by the Board.

7.       ACCELERATION OF OPTION. Notwithstanding Section 3, but subject to
         earlier termination, the Option granted hereby shall become immediately
         exercisable in full in the event of a Change of Control, as defined in
         the Plan.

8.       NO EMPLOYMENT CONTRACT. Nothing contained in this Option Agreement
         shall confer upon the Optionee any right with respect to continuance of
         employment by the Company, nor limit or affect in any manner the right
         of the Company or a Subsidiary to terminate the employment or adjust
         the compensation of the Optionee.

9.       TAXES AND WITHHOLDING. If the Company and/or one of its Subsidiaries
         shall be required to withhold any federal, state, local or foreign tax
         in connection with the exercise of the Option, and the amounts
         available to the Company and/or one of its Subsidiaries for such
         withholding are insufficient, the Optionee shall pay the tax or make
         provisions that are satisfactory to the Company for the payment
         thereof. The Company and/or one of its Subsidiaries will pay any and
         all issue and other taxes in the nature thereof which may be payable by
         the Company and/or one of its Subsidiaries in respect of any issue or
         delivery upon a purchase pursuant to this Option.

10.      COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
         comply with all applicable federal and state securities laws; provided,
         however, notwithstanding any other provision of this Option Agreement,
         the Option shall not be exercisable if the exercise thereof would
         result in a violation of any such law.

11.      ADJUSTMENTS. The Board may make or provide for such adjustments in the
         number of Optioned Shares covered by this Option, in the Option Price
         applicable to such Option, and in the kind of shares covered thereby,
         as the Board in its sole discretion, exercised in good faith, may
         determine is equitably required to prevent dilution or enlargement of
         the Optionee's rights that otherwise would result from (a) any stock
         dividend, stock split, combination of shares, recapitalization, or
         other change in the capital structure of the Company, (b) any merger,
         consolidation, spin-off, reorganization, partial or complete
         liquidation, or issuance of rights or warrants to purchase securities,
         or (c) any other


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         corporate transaction or event having an effect similar to any of the
         foregoing. In the event of any such transaction or event, the Board may
         provide in substitution for this Option such alternative consideration
         as it may determine to be equitable in the circumstances and may
         require in connection therewith the surrender of this Option. Any
         fractional shares resulting from the foregoing adjustments shall be
         eliminated.

12.      RELATION TO OTHER BENEFITS. Any economic or other benefit to the
         Optionee under this Option Agreement shall not be taken into account in
         determining any benefits to which the Optionee may be entitled under
         any profit-sharing, retirement or other benefit or compensation plan
         maintained by the Company and shall not affect the amount of any life
         insurance coverage available to any beneficiary under any life
         insurance plan covering employees of the Company.

13.      AMENDMENTS. Any amendment to the Plan shall be deemed to be an
         amendment to this Option Agreement to the extent that the amendment is
         applicable hereto; provided, however, that no amendment shall adversely
         affect the rights of the Optionee under this Agreement without the
         Optionee's consent.

14.      SEVERABILITY. In the event that one or more of the provisions of this
         Option Agreement shall be invalidated for any reason by a court of
         competent jurisdiction, any provision so invalidated shall be deemed to
         be separable from the other provisions hereof, and the remaining
         provisions hereof shall continue to be valid and fully enforceable.

15.      RELATION TO PLAN. This Option Agreement is subject to the terms and
         conditions of the Plan. In the event of any inconsistent provisions
         between this Option Agreement and the Plan, the Plan shall govern.
         Capitalized terms used herein without definition shall have the
         meanings assigned to them in the Plan. The Board acting pursuant to the
         Plan, as constituted from time to time, shall, except as expressly
         provided otherwise herein, have the right to determine any questions
         which arise in connection with this Option or its exercise.

16.      SUCCESSORS AND ASSIGNS. The provisions of this Option Agreement shall
         inure to the benefit of, and be binding upon, the successors,
         administrators, heirs, legal representatives and assigns of the
         Optionee, and the successors and assigns of the Company.

17.      GOVERNING LAW. The interpretation, performance, and enforcement of this
         Option Agreement shall be governed by the laws of the Cayman Islands,
         without giving effect to the principles of conflict of laws thereof.

18.      NOTICES. Any notice to the Company provided for herein shall be in
         writing to the Company, marked Attention: Chief Executive Officer, and
         any notice to the Optionee shall be addressed to said Optionee at his
         or her address currently on file with the Company. Except as otherwise
         provided herein, any written notice shall be deemed to be duly given if
         and when delivered personally or deposited in the mail, postage and
         fees prepaid, and addressed as aforesaid. Any party may change the
         address to which notices are to be given hereunder by written notice to
         the other party as herein specified (provided that for this purpose any
         mailed notice shall be deemed given on the third business day following
         deposit of the same in the United States mail).


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