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                         STANDARD REINSURANCE AGREEMENT

                                 (July 1, 1997)

                                   between the

                       FEDERAL CROP INSURANCE CORPORATION

                                     and the

                            (Insurance Company Name)

                                (City and State)

This  Agreement  establishes  the terms and  conditions  under  which  FCIC will
provide  subsidy and  reinsurance on eligible crop  insurance  contracts sold or
reinsured by the above named insurance company.  This Agreement is authorized by
the Act and regulations  promulgated thereunder codified in 7 C.F.R. chapter IV.
Such  regulations  are  incorporated  into  this  Agreement  by  reference.  The
provisions of this Agreement that are  inconsistent  with provisions of State or
local law or regulation  will  supersede such law or regulation to the extent of
the inconsistency.  This is a cooperative financial assistance agreement between
FCIC and the Company to deliver  eligible crop insurance  under the authority of
the Act.  For the purposes of this  Agreement,  use of the plural form of a word
includes the singular and use of the singular form of a word includes the plural
unless the context  indicates  otherwise.  The  headings in this  Agreement  are
descriptive only and have no legal effect on FCIC or the Company.

SECTION I.   DEFINITIONS

"Act" means the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.).
                                                                      ------

"Actuarial data master file" means the hard copy and EDP compatible  information
distributed  by FCIC that contains  premium rates,  program  dates,  and related
information concerning the crop insurance program for a crop year.

"Additional  coverage"  means a plan  of crop  insurance  providing  a level  of
coverage  equal to or  greater  than 65  percent of the  recorded  or  appraised
average yield  indemnified  at 100 percent of the projected  market price,  or a
comparable insurance plan as determined by FCIC.

"A&O subsidy" means the subsidy for the  administrative  and operating  expenses
authorized by the Act and paid by FCIC on behalf of the producer to the Company.

"Administrative  fee"  means the  processing  fee the  policyholder  must pay in
accordance with the Act and 7 C.F.R. chapter IV.

"Agency"  means the  person or entity  with a  contract  or  agreement  with the
Company or its MGA to sell and service  eligible crop insurance  contracts under
the Federal crop insurance program.

"Agent"  means an  individual  licensed  by the State in which  the  agent  does
business under contract with a Company, its managing general agent, or any other
entity, to sell and service eligible crop insurance contracts.

"Agreement"  means this Standard  Reinsurance  Agreement,  all  Appendices,  all
referenced documents including Manual 13 and the Approved Manual 14.

"Annual  Settlement"  means the  settlement of accounts  between the Company and
FCIC for the reinsurance year,  beginning with the February monthly  transaction
cutoff date following the reinsurance year and continuing  monthly thereafter as
necessary.

"Approved  Manual 14" means the Guidelines and  Expectations for the delivery of
the Federal Crop Insurance Program (Manual 14) as it exists 30 days prior to the
date on which the Plan of  Operation  must be  submitted to FCIC with respect to
such reinsurance year.

"Billing date" means the date specified in the actuarial data master file as the
date by  which  policyholders  are  billed  for  premium  due on  eligible  crop
insurance contracts.

"Board" means the FCIC Board of Directors.

"Book  of  business"  means  the  aggregation  of all  eligible  crop  insurance
contracts in force between the Company and its  policyholders  that have a sales
closing date within the reinsurance  year and are eligible to be reinsured under
this Agreement.

"Cancellation  date"  means the date by which the Company or  policyholder  must
notify the other that coverage under an eligible crop insurance  contract issued
by the Company is canceled for a succeeding  crop year.  The day following  this
date is considered as the date a continuous  eligible  crop  insurance  contract
carried  over from the  previous  crop year is renewed for the  subsequent  crop
year.

"Carryover crop insurance  contract" means eligible crop insurance contract that
has been in force for at least one crop  year  term and  continues  in force for
another crop year term after the cancellation date.

"Catastrophic  risk protection (CAT)" means an eligible crop insurance  contract
that is in accordance with section 508(b) of the Act.


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"Cede" means to pass to FCIC all or part of the net book premium and  associated
liability for ultimate net losses on eligible crop insurance  contracts  written
by a Company under this Agreement.

"Claims  supervisor"  means any person having immediate  day-to-day  supervisory
control (e.g.,  assigning and reviewing work of Company  employees or exercising
appropriate  management of contractors) over the activities of loss adjusters or
other persons who determine whether an indemnity will be paid and the amount.

"Code of Federal  Regulations  (C.F.R.)"  means the code  published  annually in
accordance with the Federal Register Act (44 U.S.C. chapter 15) by the Office of
the Federal Register that contains each published Federal  regulation of general
applicability and legal effect.

"Company" means the private insurance Company named on this Agreement.

"Company payment date" means the last business day of the month.

"Competing  agency"  means an agency  selling or  servicing  any  eligible  crop
insurance  contract in any county (including all counties adjoining such county)
in which  another  agency has sold or is in the process of selling any  eligible
crop insurance contract.

"Contract  change date" means the date specified in the crop insurance  contract
by which FCIC must publish all changes to the crop  insurance  contract in order
to make such changes  binding on the Federal  Crop  Insurance  Corporation,  the
Company, and the policyholder.

"Crop insurance contract" means an agreement (with the terms in effect as of the
contract change date) to insure the insurable  interest of an eligible  producer
in a single crop in a single county as provided by the application, the General,
or Common Crop Insurance Policy,  the Crop  Endorsements,  the Basic Provisions,
the Crop Provisions,  the Special  Provisions,  the Catastrophic Risk Protection
Endorsement,  as applicable,  the Actuarial  Table,  and any other instrument or
endorsement as approved by FCIC.

"Data Acceptance  System (DAS)" means the EDP system that receives,  and accepts
or rejects the Company  submitted  data upon which all  payments to FCIC and the
Company are based.

"Electronic  data  processing  (EDP)"  means  the  electronic  process  by which
information is digitally transferred, used, and stored.

"Electronic   fund  transfer  (EFT)"  means  the  process  by  which  funds  are
electronically transferred between FCIC's account and the Company's account.


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"Eligible crop insurance  contract" means a crop insurance contract that is sold
and  serviced  consistent  with the Act,  7 C.F.R.  chapter  IV,  FCIC  approved
regulations and procedure,  at applicable rates,  terms, and special conditions;
having  a sales  closing  date  within  the  reinsurance  year;  to an  eligible
producer,  covering a crop in an area approved by FCIC; and on forms approved in
writing by FCIC.

"Eligible  producer" means a person who meets all the conditions for eligibility
specified in 7 C.F.R. chapter IV.


"Employer  identification  number (EIN)" means the identification  number for an
individual,  business  entity,  or a foreign  entity  obtained from the Internal
Revenue Service pursuant to section 6109 of the Internal Revenue Code of 1986.

"Federal Crop Insurance  Corporation  (FCIC)" means the wholly-owned  government
Corporation  within the United States  Department of  Agriculture  authorized to
carry out all actions and programs authorized by the Act.

"FCIC  payment date" means the first banking day following the 14th calendar day
after  FCIC  receives  the  monthly  summary  or annual  settlement  report  and
supporting data from the Company upon which any payment is based.

"Group risk plan (GRP)"  means crop  insurance  coverage  based upon the average
yield realized by a group of producers as determined by FCIC.

"Insurable  interest"  means the portion of an insured crop a person has at risk
in the event of an insurable loss.

"Insurance  Plan" means the type of insurance  coverage  provided on a crop. For
example,  a crop may be insured under the GRP plan, a revenue insurance plan, or
a  guaranteed-yield  plan.  Differences  in levels  of  coverage  do not  create
different plans.

"Limited coverage" means an insurance plan offering coverage that is equal to or
greater than 50 percent of the recorded or appraised  average yield  indemnified
at 100  percent of the  projected  market  price but less than 65 percent of the
recorded or appraised  average yield indemnified at 100 percent of the projected
market price, or a comparable insurance plan as determined by FCIC.

"Loss ratio" means the ratio calculated by dividing the ultimate net loss by the
net book  premium,  expressed  as a  percentage.  For  example,  the ratio of $1
ultimate  net  loss to 50 cents  net book  premium  would  be  expressed  as 200
percent.


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"Managing  general  agent  (MGA)" is an entity  that  meets  the  definition  of
managing general agency under the laws of the State in which it is incorporated,
or in the absence of such State law or  regulation,  meets the  definition  of a
managing general agency in the National Association of Insurance  Commissioners'
Model Act.

"Manual 13" means the Data Acceptance  System Handbook for the reinsurance  year
for which this Agreement is effective.

"Net book  premium"  means the total  premium  calculated  for all eligible crop
insurance contracts, less A&O subsidy, cancellations, and adjustments.

"Person"  means any  individual  or legal  entity  possessing  the  capacity  to
contract.

"Plan of  Operations"  means the  information  and  documents  required from the
Company under Appendix 2 of this Agreement.

"Policyholder"  means  an  eligible  producer  who has been  issued  one or more
eligible crop insurance contracts.

"Producer premium" means that portion of the FCIC approved insurance premium for
the risk of loss that the policyholder must pay.

"Records" means original documents, including original signed documents that may
have  been  recorded,  copied,  or  reproduced  in  the  original  form  by  any
photographic, photostatic, microfilm, microcard, miniature photographic, optical
disk,  electronic  imaging,   electronic  data  processing,   or  electronically
transmitted facsimile technology:  Provided, That any signature contained on the
original is preserved.

"Reinsurance  account" means an account maintained by FCIC by which a portion of
the Company's underwriting gains may be held for future distribution.

"Reinsurance  year" means the period from July 1 of any year  through June 30 of
the following year and identified by reference to the year containing  June. All
eligible  crop   insurance   contracts  with  sales  closing  dates  within  the
reinsurance  year are subject to the terms of the  Agreement  applicable to that
reinsurance year.

"Retained"  as applied to ultimate  net  losses,  net book  premium,  or book of
business, means the remaining liability for ultimate net losses and the right to
associated net book premiums after all  reinsurance  cessions to FCIC under this
Agreement.

"Revenue insurance" means plans of insurance  providing  protection against loss
of income which are designated as such by FCIC.

"Risk subsidy" means that portion of the FCIC approved insurance premium for the
risk of loss paid by FCIC on behalf of the policyholders.

"Sales  closing  date"  means the date  established  by FCIC as the last date on
which a producer may apply for an eligible crop insurance  contract on a crop in
a specific county.

"Sales  supervisor" means any person having immediate or day-to-day  supervisory
control (e.g.,  assigning and reviewing work of Company  employees or exercising
appropriate  management  of  contractors)  over the  activities of sales agents,
competing agencies or sales agency employees on behalf of the Company.

"Satisfactory   performance   record"  means  a  record  of   performance   that
demonstrates substantial conformity with all requirements of this Agreement. The
Company  or its MGA,  if  applicable,  shall be  deemed  to have a  satisfactory
performance  record if any  deficiency  was caused by  circumstances  beyond its
control  and  where,  as soon as it was made  aware of the  deficiency,  it took
timely and appropriate corrective action. Material misconduct on the part of any
employee,  agent, loss adjuster,  or any other contractor will not be considered
as a  deficiency  beyond its  control.  Nothing  contained  herein  affects  the
Company's  liability  under any other  provision  of this  Agreement.  Continued
failure to meet requirements of the Agreement is a significant factor considered
in determining satisfactory performance.

"Social security number" ("SSN") means the identification number provided for an
individual  by  the  Social  Security   Administration,   and  may  be  the  tax
identification number (TIN).

"Transaction  cutoff date" for weekly data  reporting is 6 p.m.  central time on
Saturday of each week.  The  transaction  cutoff  date for the  monthly  summary
reports is 6 p.m.  central time on the Saturday  occurring within the first full
week (i.e., Sunday through Saturday) of the month.

"Ultimate net loss" means the amount paid by the Company under any eligible crop
insurance contract reinsured under this Agreement in settlement of any claim and
in satisfaction of any judgment or arbitration award rendered on account of such
claim,  less any  recovery  or salvage  by the  Company.  Ultimate  net loss may
include  interest and  policyholder's  court costs  related to the eligible crop
insurance  contract  provisions  or  procedures  that are  contained  in a final
judgment  against  the  Company  by a court of  competent  jurisdiction  if FCIC
determines:  (1) that such  interest or court costs  resulted from the Company's
substantial  compliance  with FCIC procedures or instructions in the handling of
the claim or in the  servicing  of the  policyholder  or that the actions of the
Company were in accordance  with accepted loss  adjustment  procedures;  and (2)
that the award of such  interest or court costs did not  involve  negligence  or
culpability  on the part of the  Company.  Ultimate  net  loss may also  include
interest or policyholder's  court costs related to the crop insurance provisions
or  procedures  that are  included in the  settlement  of any claim if FCIC,  in
addition to the  determinations  included  above, is advised of the terms of and
the  basis for the  settlement  and  determines  that the  settlement  should be
approved.  Under no  circumstance  are any  punitive  or  consequential  damages
included in the calculation of ultimate net loss.

"Underwriting"  means the acceptance or rejection of individual  insurance risk,
and  determining  the amounts and the terms by which the Company will accept the
risk for an eligible crop insurance contract.

"Underwriting  gain" means the amount by which the  Company's  share of retained
net book premium exceeds its retained ultimate net losses.

"Underwriting  loss" means the amount by which the  Company's  share of retained
ultimate net losses exceeds its retained net book premium.

SECTION II.   REINSURANCE

A.     General Terms

1.   Only eligible crop  insurance  contracts  will be reinsured and  subsidized
     under this Agreement.

2.   Except as specified  below,  the Company  must offer all approved  plans of
     insurance  for all  approved  crops in any  State in  which  it  writes  an
     eligible  crop   insurance   contract  and  must  accept  and  approve  all
     applications  from all eligible  producers.  The Company may not cancel the
     crop  insurance   contract  held  by  any   policyholder  so  long  as  the
     policyholder  remains an eligible  producer  and the Company  continues  to
     write eligible crop insurance  contracts  within the State.  The Company is
     not  required to offer such plans of  insurance  as may be approved by FCIC
     under the authority of section 508(h) of the Act.  However,  if the Company
     chooses  to offer any such  plan,  it must  offer the plan in all  approved
     states in which it writes an eligible crop  insurance  contract and it must
     comply with all  provisions  of this  paragraph  as to such plan unless the
     Board determines that a separate and complete reinsurance agreement will be
     issued for the reinsurance of such plan.

3.   In exchange for the reinsurance  premiums  provided by the Company pursuant
     to this Agreement,  FCIC will provide the Company with reinsurance pursuant
     to the provisions of this Agreement.

4.   All eligible crop insurance  contracts  reinsured and subsidized under this
     Agreement must conform to the regulations published at 7 C.F.R., chapter IV
     or as approved in writing by FCIC.

5.   FCIC will not provide  reinsurance,  A&O  subsidy,  or risk subsidy for any
     eligible or ineligible crop insurance  contract that is sold or serviced in
     violation  of the terms of this  Agreement,  7  C.F.R.,  chapter  IV,  FCIC
     approved procedures or any written instructions of FCIC.

6.   No portion of the net book premium or the A&O subsidy may be rebated in any
     form to  policyholders,  except as  authorized  by the Act and  approved in
     writing by FCIC.  Neither the Company nor its agents shall  assess  service
     fees or additional charges on eligible crop insurance  contracts  reinsured
     and  subsidized  under this  Agreement  except as authorized by the Act and
     approved in writing by FCIC.

7.   Only the amount of net book premium authorized by FCIC in the approved Plan
     of  Operations  may be  reinsured  and  subsidized  under  this  Agreement.
     Whenever  the Company  reports an amount of net book  premium  greater than
     FCIC authorized as the maximum  reinsurable net book premium,  FCIC may, at
     its sole discretion, cause the net underwriting gain or loss for all States
     as defined in section  II.D.3.  payable to or by the  Company to be reduced
     according to the ratio of the excess net book premium to the total reported
     net book premium.  The excess will then be reinsured  under this Agreement.
     The Company agrees to pay FCIC an additional reinsurance premium equal to 5
     percent of the excess net book premium whenever this provision applies.

8.   To be eligible for an Agreement, or continue to hold an Agreement:

a.   The Company must have adequate financial  resources at the beginning of the
     reinsurance  year as  required by 7 C.F.R.  part 400,  subpart L. If at any
     time  during  the  reinsurance  year the  Company  no longer  has  adequate
     financial resources, the Company must timely obtain such resources.

b.   The Company, and any managing general agent that it appoints or proposes to
     appoint must:

i.   Have a satisfactory performance record;

ii.  Have the necessary  organization,  experience,  accounting and  operational
     controls,  and  technical  skills  to  fulfill  its  obligations  under the
     Agreement, or the ability to obtain them;

iii. Have  the  necessary   equipment  to  fulfill  its  obligations  under  the
     Agreement,  including,  but not limited to, EDP resources and facilities or
     the ability to obtain such equipment; and

iv.  Perform under a written contract or agreement with each other.

B.     Proportional Reinsurance

Within each State, the Company,  in accordance with its Plan of Operations,  may
     designate  eligible crop insurance  contracts to a: (1) Assigned Risk Fund;
     (2) Developmental Fund; or (3) Commercial Fund. 1. Assigned Risk Fund

a.   The Company may designate  eligible  crop  insurance  contracts,  including
     those previously designated to a Developmental Fund, that have an aggregate
     net book premium not greater than the maximum  cession limits  specified in
     section  II.B.1.d.  to the Assigned  Risk Fund for each State.  The Company
     must retain 20 percent of the net book premium and associated liability for
     ultimate net losses on these designated eligible crop insurance  contracts,
     except as provided in sections  II.B.1.c.  and II.B.4.  The  liability  for
     ultimate net losses not  retained by the Company  within each State will be
     ceded to FCIC in exchange for an equal  percentage  of the  associated  net
     book premium included in the Assigned Risk Fund in that State.

b.   The  Company  must  designate  eligible  crop  insurance  contracts  to the
     Assigned Risk Fund not later than the transaction  cutoff date for the week
     including  the 30th  calendar  day  after the  sales  closing  date for the
     eligible crop insurance contract unless:

                     i.    FCIC  determines  that  conditions  exist  that would
                           permit  the  policyholder  to  plant  crops  that are
                           alternatives  to the crops listed on the  application
                           for  insurance,  or there are eligible crop insurance
                           contracts  transferred  from the Farm Service  Agency
                           after  the  sales  closing  date.   The  Company  may
                           designate  such   alternative  or  transferred   crop
                           insurance  contracts  to the  Assigned  Risk Fund not
                           later than the  transaction  cutoff date for the week
                           containing  the 30th  calendar  day after the acreage
                           reporting date; or

                    ii.    FCIC  approves  a written  agreement  for  limited or
                           additional  coverage contracts of insurance after the
                           sales  closing date.  The Company may designate  such
                           eligible  crop  insurance  contracts  to the Assigned
                           Risk Fund not later than the transaction  cutoff date
                           for the week  containing  the 30th calendar day after
                           FCIC approval.

c.   Unless otherwise specified in the Agreement, in the event the aggregate net
     book premium for all such eligible  crop  insurance  contracts  exceeds the
     maximum  allowable  cession for any individual  State, the amount ceded for
     each  eligible  crop  insurance  contract  in such  State  will be  reduced
     pro-rata to the  maximum  allowable  cession  for that State.  The net book
     premium and  associated  liability  for ultimate net losses that exceed the
     maximum  allowable  cession for an  individual  State will be placed in the
     appropriate Developmental Funds for that State on a pro rata basis.

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d.     The Assigned Risk Fund maximum cession limits for each State are:



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             Maximum            Maximum
State       Cession  State      Cession

Alabama       50% Montana        75%
Alaska        75% Nebraska       20%
Arizona       55% Nevada         75%
Arkansas      50% New Hampshire  10%
California    20% New Jersey     50%
Colorado      20% New Mexico     55%
Connecticut   35% New York       40%
Delaware      30% North Carolina 20%
Florida       40% North Dakota   45%
Georgia       75% Ohio           25%
Hawaii        10% Oklahoma       50%
Idaho         45% Oregon         30%
Illinois      20% Pennsylvania   25%
Indiana       20% Rhode Island   75%
Iowa          15% South Carolina 55%
Kansas        20% South Dakota   30%
Kentucky      25% Tennessee      35%
Louisiana     50% Texas          75%
Maine         75% Utah           75%
Maryland      20% Vermont        15%
Massachusetts 45% Virginia       30%
Michigan      50% Washington     30%
Minnesota     20% West Virginia  75%
Mississippi   50% Wisconsin      35%
Missouri      20% Wyoming        35%


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e.   All eligible crop insurance contracts, including CAT, all revenue insurance
     plans, and all other insurance  plans,  that are designated to the Assigned
     Risk Fund will be placed  in a single  fund in each  state,  which is shown
     under "B" in sections II.C. and D.

2.   Developmental Funds

a.   The Company may designate eligible crop insurance contracts to any of three
     Developmental Funds as follows: Fund C CAT; Fund R Revenue insurance plans;
     or Fund B All other crop insurance plans.

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b.   If the Company  declares in its Plan of  Operations  that it will forgo the
     use of the Commercial Fund in all States,  then all eligible crop insurance
     policies not  designated  to the  Assigned  Risk Fund will be placed in the
     appropriate Developmental Fund.

c.   Designations to Developmental Funds must be made:

                           i. For carryover  crop  insurance  contracts  insured
                           with the Company the previous year that have contract
                           change dates  occurring on or after July 1, not later
                           than  the  transaction   cutoff  date  for  the  week
                           containing  the 30th  calendar day after the contract
                           change  date for the  applicable  crop and  insurance
                           plan for each reinsurance year;

                           ii. For carryover  crop insurance  contracts  insured
                           with the Company the previous year that have contract
                           change dates occurring  before July 1, not later than
                           the  transaction  cutoff date for the week containing
                           August 1 of the reinsurance year; and

                           iii. For all other eligible crop insurance contracts,
                           not later than the  transaction  cutoff  date for the
                           week  containing the 30th day after the sales closing
                           date for the eligible crop insurance contract.

d.   The  Company  must  retain at least 35 percent of the net book  premium and
     associated  liability  for ultimate net losses on eligible  crop  insurance
     contracts  placed into each of the  Developmental  Funds within each State.
     The Company  may retain a greater  percentage  of the net book  premium and
     associated  liability for ultimate net losses within any State  whenever it
     designates  percentages  greater than 35 percent in its Plan of  Operations
     for any reinsurance year. Such percentage designations must be in 5 percent
     increments. The three Developmental Funds' retention percentages may differ
     within a State.  The  liability for ultimate net losses not retained by the
     Company  within each State will be ceded to FCIC in  exchange  for an equal
     percentage of the associated net book premium included in the Developmental
     Funds in that State.

3.   Commercial Funds

a.   Any eligible crop  insurance  contract not designated by the Company to the
     Assigned Risk Fund or a  Developmental  Fund will be placed in one of three
     Commercial Funds as follows: Fund C CAT; Fund R Revenue insurance plans; or
     Fund B All other crop insurance plans.

b.   The  Company  must  retain at least 50 percent of the net book  premium and
     associated  liability  for ultimate net losses on eligible  crop  insurance
     contracts designated to each of the Commercial Funds within each State. The
     Company may retain  percentages  of the net book  premiums  and  associated
     liability for ultimate net losses  within any State  whenever it designates
     percentages  greater  than 50  percent  in its Plan of  Operations  for any
     reinsurance  year. Such percentage  designations  must be made in 5 percent
     increments.  The three Commercial  Funds' retention  percentages may differ
     within a State.  The  liability for ultimate net losses not retained by the
     Company  within each State will be ceded to FCIC in  exchange  for an equal
     percentage of the  associated  net book premium  included in the Commercial
     Funds in that State.

4.   Company Minimum Retention

a.   After all  proportional  reinsurance  cessions  under this  Agreement,  the
     Company  must  retain a  percentage  of net  book  premium  and  associated
     liability  for ultimate net losses that equals or exceeds 35 percent of its
     book of business. However, if more than 50 percent of the Company's book of
     business is in the Assigned  Risk Fund or the Company  designates  eligible
     crop insurance  contracts only to the Assigned Risk Fund and  Developmental
     Funds,  the  Company  must  retain a  percentage  of net book  premium  and
     associated  liability  for  ultimate net losses of at least 22.5 percent of
     its book of business.

b.   In the  event  that  the  Company  fails to  retain  the  required  minimum
     percentage of its book of business under this Agreement, the percent of net
     book  premiums  and  associated  liability  for ultimate net losses for all
     eligible crop insurance contracts included in the Assigned Risk Fund in all
     States will be increased on a pro-rata basis from the 20 percent  retention
     stated in section II.B.1.a.  to the retention necessary to meet the minimum
     retention stated in section II.B.4.a.
C.     Non-Proportional Reinsurance

1.   Company's Responsibility for Ultimate Net Losses

The  non-proportional  reinsurance  provided  hereunder applies to the Company's
retained book of business in each individual  Fund and State after  proportional
cessions  under  subsection  II.B.  For  each  Fund  and  State,  the  Company's
responsibility for ultimate net losses will be determined as follows:

a.   The Company will retain the  following  percentages  of the amount by which
     its retained  ultimate net losses in each individual  State and Fund exceed
     100  percent  but are less than or equal to 160  percent  of the  Company's
     retained net book premium in that State and Fund for the reinsurance year.
                                   (B)                 (C)               (R)
i.   Commercial Fund       50.0 percent         50.0 percent       57.0 percent
ii.   Developmental Fund   25.0 percent         25.0 percent       30.0 percent
iii.   Assigned Risk Fund  5.0 percent              - - -              - - -

b.   In addition to the amount determined under section  II.C.1.a.,  the Company
     will retain the following  percentages  of the amount by which its retained
     ultimate  net losses in each  individual  State and Fund exceed 160 percent
     but are less than or equal to 220  percent of the  Company's  retained  net
     book premium in that State and Fund for the reinsurance year.
                                   (B)                 (C)                  (R)
i.    Commercial Fund       40.0 percent        40.0 percent        43.0 percent
ii.   Developmental Fund    20.0 percent        20.0 percent        22.5 percent
iii.   Assigned Risk Fund   4.0 percent            - - -              - - -

c.   In addition to the amounts  determined under paragraphs  II.C.1.a.  and b.,
     the Company will retain the  following  percentages  of the amount by which
     its retained  ultimate net losses in each individual  State and Fund exceed
     220  percent  but are less than or equal to 500  percent  of the  Company's
     retained net book premium in that State and Fund for the reinsurance year.
                                 (B)                (C)                  (R)
i.   Commercial Fund         17.0 percent       17.0 percent        17.0 percent
ii.   Developmental Fund     11.0 percent       11.0 percent        11.0 percent
iii.   Assigned Risk Fund     2.0 percent             - - -              - - -

d.   FCIC will assume  ultimate net losses in excess of the  Company's  retained
     ultimate losses as determined  under  paragraphs  II.C.1.a.,  b., and c. In
     addition, FCIC will assume 100 percent of the amount by which the Company's
     retained  ultimate net losses in each individual  State and Fund exceed 500
     percent of the  Company's  retained net book premium in that State and Fund
     for the reinsurance year.

D.     Company's Retention of Underwriting Gain

1.   The amount of underwriting  gain retained by the Company will be calculated
     separately for each Fund within each State as follows:

a.   When the loss  ratio  equals or  exceeds  65  percent  but is less than 100
     percent of the Company's  retained net book premium in a Fund and State for
     the reinsurance year, the Company will retain the following  percentages of
     the underwriting gain:
                             (B)                (C)                  (R)
    i.   Commercial Fund           94.0 percent 75.0 percent  94.0 percent
    ii.   Developmental Fund       60.0 percent 45.0 percent  60.0 percent
    iii.   Assigned Risk Fund      15.0 percent    - - -      - - -

b.   In addition to the amounts of underwriting  gain determined in the range of
     loss ratios under section II.D.1.a.,  when the loss ratio equals or exceeds
     50 percent but is less than 65 percent of the  Company's  retained net book
     premium in a Fund and State for the  reinsurance  year,  the  Company  will
     retain in that Fund and State the following percentages of the underwriting
     gain:

                                  (B)               (C)                   (R)
    i.   Commercial Fund        70.0 percent   50.0 percent      70.0 percent
    ii.   Developmental Fund    50.0 percent   30.0 percent        50.0 percent
    iii.  Assigned Risk Fund     9.0 percent       - - -               - - -

c.   In addition to the amounts of underwriting  gain determined in the range of
     loss ratios under  sections  II.D.1.a.  and b., when the loss ratio is less
     than 50 percent of the  Company's  retained  net book premium in a Fund and
     State for the  reinsurance  year,  the Company will retain in that Fund and
     State the following percentages of the underwriting gain:
                                       (B)               (C)            (R)
    i.   Commercial Fund           11.0 percent   8.0 percent   11.0 percent
    ii.   Developmental Fund       6.0 percent    4.0 percent     6.0 percent
    iii.   Assigned Risk Fund      2.0 percent     - - -               - - -

2.   The underwriting  gain or loss for each individual Fund will be totaled for
     each State to determine the net underwriting gain or loss for that State.

3.   The Company's net underwriting  gain or loss will be determined by totaling
     the net underwriting  gains or losses for all States.  Any net underwriting
     gain will be paid by FCIC to the  Company  at annual  settlement  except as
     provided in section II.D.4.  Any net underwriting  loss of the Company will
     be paid to FCIC by the Company with each monthly summary report.


4.   Reinsurance Account

              a.    All   calculations   described  in  this  section  are  only
                    applicable  to the  annual  settlement.  The  balance in the
                    Company's  reinsurance  account is subject to the provisions
                    of section V.U.


<PAGE>


              b.    If  the  Company's  overall  gain  for  all  States  in  any
                    reinsurance  year  exceeds  17.5 percent of its retained net
                    book premium for that  reinsurance  year,  60 percent of the
                    amount  above 17.5 percent will be held by FCIC in a Company
                    reinsurance account.

              c.    If the Company  retains an overall  loss or an overall  gain
                    less than 17.5  percent of its  retained net book premium in
                    any   reinsurance   year,  any  balances  in  the  Company's
                    reinsurance  account  will  be paid  to the  Company  to the
                    extent  needed to obtain an overall  gain of 17.5 percent of
                    retained net book premium, or a lesser amount if the balance
                    in the account is not adequate to achieve this percentage.

              d.    Except  only for those  funds  that are the  subject  to the
                    provisions of section V.X. or to  litigation or  arbitration
                    between the Company and FCIC, or set-off in accordance  with
                    section V.U.,  funds from a reinsurance  year that have been
                    placed in this account for any one reinsurance  year will be
                    returned  to the  Company 2 years  after  the  first  annual
                    settlement for such reinsurance year.  Payments will be made
                    on a first in, first out basis.  (For  example,  any balance
                    remaining  from the 1998  reinsurance  year  will be paid in
                    February 2001.)

              e.    In the event of termination or nonrenewal of this Agreement,
                    balances in the reinsurance account will be paid, less those
                    funds that are subject to a claim by FCIC, as follows:

                      i.   If  terminated  by the  Company,  50  percent  of the
                           balance  will  be  paid  at the  date  of the  annual
                           settlement  that  would have  occurred  for the first
                           reinsurance  year after  termination,  and 50 percent
                           will  be  paid 1 year  later,  provided  neither  the
                           Company  nor any other  company  associated  with the
                           Company  (as  determined  by FCIC)  has  applied  for
                           reinsurance under the Act.

                    ii.    Whenever FCIC  terminates  this Agreement or does not
                           renew  this   Agreement   or  offer  any   subsequent
                           Agreement, any remaining balance shall be paid 1 year
                           after the first annual  settlement of the reinsurance
                           year terminated.

                    f.  Notwithstanding  any  provision of any earlier  Standard
                    Reinsurance  Agreement,   any  balance  in  the  reinsurance
                    account accumulated from the 1997 or prior reinsurance years
                    will be paid out in  accordance  with section  II.D.4.  This
                    provision  will be  implemented  at the  time of the  annual
                    settlement   for  the  Agreement  in  effect  for  the  1997
                    reinsurance year. No interest will be paid on such amounts.


<PAGE>


E.     Commercial Reinsurance

       The Company may  reinsure  commercially  its  liability  for ultimate net
       losses remaining after all cessions under this Agreement. When commercial
       reinsurance  is required  in order for the Company to meet the  Standards
       for Approval (7 C.F.R. part 400, subpart L), the Company must describe in
       the Plan of Operations  its commercial  reinsurance  plan and provide the
       documentation required by FCIC to assure that the potential liability for
       premiums   retained   after  such   commercial   reinsurance   meets  the
       requirements contained in the Standards for Approval.

SECTION III.  SUBSIDIES AND ADMINISTRATIVE FEES

A.     FCIC will provide risk subsidy and A&O subsidy on behalf of producers as
       follows:

       1.     Risk subsidy shall be determined as provided by the Act and will
              be provided to the Company on the monthly summary report.

       2.     A&O  subsidy  for  eligible  crop  insurance   contracts  will  be
              determined  as set forth  below and will be paid to the Company on
              the monthly  summary  report after the Company  submits,  and FCIC
              accepts,  the  information  needed  to  accurately  establish  the
              premium   for   such    eligible   crop    insurance    contracts.
              Notwithstanding   the   provisions  of  this  section,   under  no
              circumstances  will A&O  subsidy  be paid in excess of the  amount
              authorized by statute.

              a.    For any eligible CAT crop insurance contract, 0 percent of
                    net book premium.

              b.    For revenue insurance plans that can not increase  liability
                    whenever  the  market  price at harvest  exceeds  the market
                    price at the time of planting,  27.0 percent of the net book
                    premium   attributed  to  such   eligible   crop   insurance
                    contracts,  not to exceed  the  amount  that would have been
                    paid  had  each  eligible  producer   purchased  limited  or
                    additional  coverage  under an  insurance  plan that insures
                    loss of individual yield.

              c.    For  revenue  insurance  plans that can  increase  liability
                    whenever the market price at the time of harvest exceeds the
                    market price at the time of planting,  23.25  percent of the
                    net book premium  attributed to such eligible crop insurance
                    contracts.

              d.    For eligible crop insurance  contracts that provide coverage
                    under  the  GRP,  25.0  percent  of  the  net  book  premium
                    attributed to such eligible crop insurance contracts.

              e.    For limited or additional coverage not included in sections
                     III.A.2. b., c., and d., 27.0  percent of net book
                    premium attributed to such eligible crop insurance
                    contracts.



<PAGE>


                    f.   The amounts payable under sections III.A.2.b., c., d.,
                    and e., will be reduced by the amount of administrative
                   fees applicable to such policies retained by the Company.

                    g. If the amount of A&O  subsidy  payable to the Company for
                    any limited  coverage  eligible crop  insurance  contract is
                    less than the  administrative fee retained by the Company on
                    such  contract,  the  administrative  fee will be considered
                    payment in full for the A&O subsidy on such contract.

B.     The Company shall collect administrative fees from producers and may
       retain only such amounts as set forth herein:

       1.     For CAT, $50 for each eligible  crop  insurance  contract,  not to
              exceed $200 per county and $600 for all counties combined for each
              eligible producer. The Company shall retain not more than $100 per
              county for each eligible producer as compensation for the costs of
              selling and servicing the eligible CAT crop  insurance  contracts.
              In the event the eligible producer is a limited resource farmer as
              defined in the regulations,  the Company shall submit the required
              evidence to FCIC and FCIC shall pay the  Company  the  appropriate
              fee on the monthly summary report.

       2.     For limited  coverage,  $50 per eligible crop insurance  contract,
              not to exceed $200 per county and $600 for all  counties  combined
              for each eligible producer. The Company shall retain not more than
              $100 per county for each eligible  producer.  Any fees retained by
              the Company will be offset against the A&O subsidy.

       3.     For additional coverage, $10 per eligible crop insurance contract
               to be paid to FCIC by the Company.

C.     The amount of A&O subsidy may be adjusted to a level that FCIC determines
       to be equitable if issuing or servicing eligible crop insurance contracts
       involve expenses that vary significantly from the basis used to determine
       the A&O subsidy under this section:  Provided: That such A&O subsidy does
       not exceed the maximum amount specified by statute.

D.     In the event the Company  determines  that it can deliver  eligible  crop
       insurance  contracts  for  less  than the A&O  subsidy  paid  under  this
       section,  it may  apply to FCIC for  approval  to  reduce  the  amount of
       producer premium charged to  policyholders by an amount  corresponding to
       the value of the efficiency.


<PAGE>


E.     With the exception of raisins,  the Company may not submit estimated data
       for the purpose of establishing  premium,  liability,  or indemnity.  For
       raisins,  the Company may submit  estimated  reports not to exceed 2 tons
       per acre,  which will be used to determine  the estimated A&O subsidy for
       eligible raisin crop insurance contracts.  In the event the actual raisin
       net book premium is less than this estimate, the Company will include the
       excess A&O subsidy as an amount owed to FCIC in the first monthly summary
       report after the actual raisin tonnage is known. Interest on this amount,
       at the  rate set  forth in  section  V.C.2.  calculated  from the date of
       payment by FCIC to the date of the monthly  summary report upon which the
       actual tonnage is reported, must be included as an amount owed to FCIC.

F.     The billing statement provided to the policyholder will contain the
       following information:

       1.     The total premium calculated by adding 2 and 3 below;

       2.     The risk subsidy and A&O subsidy paid or provided by FCIC
              to the Company on behalf of the policyholder; and

       3.     The amount of premium and any administrative fees due the
              Company from the policyholder.

G.     All data on which  liabilities and premiums are based must be reported by
       the Company and accepted by FCIC not later than the  transaction  cut-off
       date for the twelfth week after the week that includes the latest acreage
       reporting  date  specified  in the  actuarial  data  master  file for any
       eligible crop insurance  contract  insured by the  policyholder.  The A&O
       subsidy for eligible crop insurance  contracts  under this Agreement will
       be reduced if the data are  delayed,  unless the delay is caused in whole
       or in part by FCIC, as follows:

       Data Received

       During Weeks                                         Reduction

       13th through 15th                                 1.5 percent
         --           --
       16th through 17th                                  3.0 percent
         --           --
       18th or more                                       4.5 percent
         --

H.     No A&O subsidy for eligible crop insurance contracts under this
       Agreement will be paid if the agent or loss adjuster SSN is not
       submitted and accepted by FCIC.

I.     A&O  subsidy  will be paid to the  Company  beginning  with  the  October
       monthly summary report.  It will be paid in one installment  based on the
       data obtained from accepted acreage reports  (preliminary  tonnage report
       for  eligible  raisin  crop  insurance   contracts)  in  accordance  with
       processing provisions contained in Manual 13.

SECTION IV.   LOSS ADJUSTMENT EXPENSES



<PAGE>


A.     For eligible CAT crop insurance  contracts,  FCIC will pay to the Company
       an amount equal to 4.7 percent of the total net book premium for eligible
       CAT crop  insurance  contracts  computed at 65 percent of the recorded or
       appraised  average  yield  indemnified  at 100  percent of the  projected
       market price, or equivalent  coverage,  for loss adjustment expense.  The
       loss adjustment expense specified in this section will be included in the
       monthly summary report  containing the data obtained from acreage reports
       that  have met the  processing  provisions  specified  in  Manual  13. In
       addition to the amounts stated in this subsection:

1.   If the actual loss ratio on the  Company's net book premium of all eligible
     CAT crop insurance  contracts for the  reinsurance  year exceeds 60 percent
     but is not greater than 160 percent,  FCIC will pay to the Company, as loss
     adjustment  expense, an additional 0.017 percent of the net book premium on
     all eligible CAT crop insurance  contracts  reinsured  under this Agreement
     for each full point  between a 60 percent and 160 percent  loss ratio.  The
     loss  adjustment  expense  payable to the Company under this paragraph will
     not exceed 1.7 percent.  The loss adjustment expense payable to the Company
     under this paragraph for such eligible CAT crop insurance  contracts  shall
     be  computed  on  premium  determined  at 65  percent  of the  recorded  or
     appraised  average yield indemnified at 100 percent of the projected market
     price, or equivalent coverage.


2.   In  addition to the amounts  stated in section  IV.A.1,  if the actual loss
     ratio on the Company's net book premium of all eligible CAT crop  insurance
     contracts for the reinsurance year exceeds 160 percent but not greater than
     260  percent,  FCIC  will pay to the  Company,  as excess  loss  adjustment
     expense,  an  additional  0.007  percent  of the net  book  premium  on all
     eligible CAT crop insurance  contracts  reinsured  under this Agreement for
     each full point  between a 160  percent and 260  percent  loss  ratio.  The
     excess loss adjustment expense payable under this paragraph will not exceed
     0.7  percent.  The  excess  loss  adjustment  expense  payable  under  this
     paragraph for such eligible CAT crop insurance  contracts shall be computed
     on premium  determined  at 65 percent of the recorded or appraised  average
     yield  indemnified at 100 percent of projected  market price, or equivalent
     coverage.

B.   Loss  adjustment  expenses  under  section  IV.A.  will be  included in the
     monthly  summary  report that  contains  losses  exceeding  the  thresholds
     specified  in  section  IV.A.  and  that  meet  the  processing  provisions
     specified in Manual 13.

SECTION V.   GENERAL PROVISIONS

A.     Collection of Information and Data

The  Company is  required  to collect  and provide to FCIC the SSN or the EIN as
     authorized and required by the Food, Agriculture,  Conservation,  and Trade
     Act of 1990 (Pub. L. 101-624), and the regulations  promulgated thereunder,
     as codified in 7 C.F.R. part 400, subpart Q.



<PAGE>




B.     Reports

       1.     The Company must submit  accurate and  detailed  contract  data to
              FCIC through the DAS in accordance with the requirements of Manual
              13.  The DAS  will  only  accept,  and the  Company  will  only be
              required to submit data through the  automated  system for 3 years
              following the first annual  settlement for the  reinsurance  year.
              Settlement  of claims  still in  litigation,  arbitration,  or any
              administrative   proceeding   3  years  after  the  first   annual
              settlement for such  reinsurance year must be reported to FCIC and
              will be processed  manually  following  final  resolution  of such
              action.

       2.     All reports submitted for reimbursement must be certified by an
              authorized officer or authorized employee of the
              Company.  The required certification statements are contained in
              Manual 13.

       3.     Failure  of the  Company  to comply  with the  provisions  of this
              Agreement,  including timely  submission of the monthly and annual
              settlement data and reports,  or any other report required by this
              Agreement  does not  excuse  or delay the  requirement  to pay any
              amount due to FCIC by the dates specified  herein.  Failure of the
              Company to make payment in accordance  with the provisions of this
              Agreement  is a  default  of this  Agreement  by the  Company.  In
              addition to the payment of applicable  interest,  such actions may
              be a basis to suspend or terminate this Agreement.

       4.     Producer premiums and administrative fees collected by the Company
              must be reported on the monthly  summary  report  submitted in the
              next  calendar  month  after  collection.  Producer  premiums  and
              administrative  fees that are  uncollected  for each  billing date
              must be reported by the Company on the monthly  summary report for
              the month following the month containing the billing date.

       5.     All  payments  due FCIC  from the  Company  will be  netted on the
              monthly and annual settlement reports with amounts due the Company
              from FCIC.  Any amount due FCIC as a result of the netting  effect
              must be deposited on or before the Company's payment date directly
              into FCIC's  account in the U. S. Treasury by EFT. FCIC will remit
              amounts due the Company by EFT on or before the FCIC payment date.
              Any amounts due FCIC or the Company  that are not timely  remitted
              are subject to the interest rate  provisions  contained in section
              V. C., with such interest  accruing from the date such payment was
              due to the date of payment.

       6.     In the event that a payment would be due to the Company except for
              the erroneous rejection of data by FCIC, the Company
              shall be entitled to interest accrued on these amounts
              for the period of such delay, at the rate provided in section V.
              C.1.




<PAGE>




       7.     In addition to the reporting  requirements contained in Manual 13,
              the Company will provide  other  information  relating to policies
              reinsured hereunder as may be requested by FCIC.

       8.     All payments and reports are subject to post audit by FCIC in
              accordance with section V. X.

C.     Interest

       1.     Any interest that FCIC is required to pay the Company under the
              terms of this Agreement will be paid in accordance with
              the interest provisions of the Contract Disputes Act
              (41 U.S.C. 601 et seq.).

       2.     Any  interest  that the  Company is required to pay FCIC under the
              terms of this Agreement  will be paid at the simple  interest rate
              of 15 percent per annum.

       3.     The  Company  will repay  with  interest  any  amount  paid to the
              Company by FCIC that FCIC or the Company  subsequently  determines
              was not due.

       4.     FCIC will repay with interest any amount paid by the Company to
              FCIC which FCIC subsequently determines was not due.

D.     Escrow Account

       1.     At the Company's request, FCIC will allow the Company to establish
              an escrow account in the name of FCIC at a bank  designated by the
              Company,  and  approved  by FCIC,  to  reimburse  the  Company for
              payment  of losses  to  eligible  producers  by the  Company.  The
              Company's bank must pledge collateral as required by 31 C.F.R. 202
              in the amount determined by FCIC. The requirements for funding the
              escrow  account and monthly  balancing  are contained in Manual 13
              and the Escrow Agreement.

       2.     Any Company  that  elects not to utilize  escrow  funding  will be
              reimbursed  for paid losses  validated and accepted on the monthly
              summary report.

       3.     For the  purpose of this  Agreement,  any loss will be  considered
              paid by the Company  when the  instrument  or  document  issued as
              payment of the indemnity has cleared the Company's bank account.

E.     Form Approval

       The Company  must submit for FCIC's  approval all forms  incorporated  by
       reference into the eligible crop insurance contracts reinsured under this
       Agreement.  Any such forms must not be used by the Company until approved
       or otherwise authorized in writing by FCIC.


<PAGE>




F.     Supplemental Insurance

       1.     The Company  must not sell any  contract of  insurance  or similar
              instrument  that may shift risk to or otherwise  increase the risk
              of any eligible crop insurance contract sold or reinsured by FCIC.
              The Company  must submit any  contracts  of  insurance  or similar
              instruments to FCIC for review and approval prior to selling them.
              FCIC will not reimburse  the Company for any loss  occurring on an
              eligible crop insurance contract if the Company sold a contract of
              insurance  that  FCIC  determines  to  have  shifted  risk  to  or
              increases  the  risk  of such  eligible  crop  insurance  contract
              reinsured under this Agreement,  or if the Company administers the
              contract of insurance in a manner inconsistent with its submission
              and the FCIC approval.

       2.     The Company must  maintain and make  available to FCIC the SSN and
              EIN and  underwriting  information  pertaining  to any contract of
              insurance  written in  conjunction  with eligible  crop  insurance
              contracts  reinsured under this Agreement,  including the contract
              number of the related eligible crop insurance contract.

G.     Insurance Operations

       1.     Plan of Operations

              a.    This  Agreement   becomes  effective  with  respect  to  any
                    reinsurance  year upon  approval  of the  Company's  Plan of
                    Operations by FCIC. The Plan of Operations must be submitted
                    to FCIC by April 1 preceding the reinsurance year.

              b.    The Plan of Operations must meet the requirements and be in
                    the format as contained in appendix 2.

              c.    The Company  may submit a request to amend an approved  Plan
                    of  Operations  at any  time to  reflect  changing  business
                    considerations and sales expectations.  Such amendments must
                    be in writing and must be approved by FCIC in writing before
                    implementation by the Company. The request will be evaluated
                    following  the  procedures  applicable  to  a  timely  filed
                    original plan,  except that FCIC will also consider  whether
                    FCIC's risk is materially increased.  Requests for amendment
                    where  the  risk  has  materially  increased  will  only  be
                    considered if FCIC, at its sole discretion,  determines that
                    its  actions or those of USDA have  substantially  increased
                    the risk of  underwriting  loss on eligible  crop  insurance
                    contracts previously written by the Company.

              d.    The Plan of Operations is incorporated in this Agreement by
                    reference.  Material failure to follow the Plan of
                    Operations may be a basis for FCIC to terminate this
                    Agreement.





<PAGE>


       2.     General Operations

              a.    All eligible crop insurance  contracts  reinsured under this
                    Agreement  must be sold by  properly  trained  and  licensed
                    agents. Employees, agents, brokers, solicitors, or any other
                    sales representatives of the Company who quote premium rates
                    and  coverages or provide other  information  in the sale of
                    eligible crop insurance  contracts to current or prospective
                    policyholders   must  be  licensed  or   certified  in  crop
                    insurance if available, or in the property and casualty line
                    of insurance if a crop insurance license or certification is
                    not available.

              b.    The  Company  shall  not  permit  its sales  agents,  agency
                    employees, sales supervisors, or any spouse or family member
                    residing  in the same  household  as any such  sales  agent,
                    agency  employee,  or sales supervisor to be involved in any
                    way with the following activities in any county or adjoining
                    county where the sales agent, agency employee, any competing
                    agency or sales supervisor performs any sales functions:

                      i.   The supervision, control, or adjustment of any loss;

                     ii.   A determination of a claim or cause of loss; or

                    iii.   Verification of yields for the purpose of
                           establishing any insurance coverage or guarantee.

              c.    The Company shall not permit its claims  supervisors  or any
                    employee or contractor  involved in the determination of the
                    amount or cause of any loss to be  involved  in any way with
                    the sales of any  eligible  crop  insurance  contract in any
                    county or  adjoining  county in which they  perform any loss
                    adjustment or claims services.

              d.    The Company shall not permit its sales agents, the owners or
                    employees of its sales agencies,  its sales supervisors,  or
                    any spouse or family member  residing in the same  household
                    as any such  person,  to be  involved  in  underwriting  any
                    eligible crop insurance contract written by any such person.

                    e.  Any  person  employed  by the  Company  for the  general
                    supervision  of the crop  insurance  program  in an area may
                    supervise    activities    associated   with   the   general
                    administration  of the crop insurance  program in that area,
                    which may include  training,  servicing,  underwriting,  and
                    loss adjusting. However, all quality control reviews must be
                    conducted  by objective  and  unbiased  persons who were not
                    involved in  establishing  the  guarantee or  adjusting  the
                    loss, or the sales or  supervision of sales for the policies
                    reviewed.


<PAGE>


              f.    The  Company  must  verify all yields and other  information
                    used  to  establish   insurance   guarantees  and  indemnity
                    payments in accordance with the procedures approved by FCIC.
                    Guarantees   must  be  verified  in   accordance   with  the
                    requirements  of  the  approved  Manual  14  and  applicable
                    procedures.

              g.    The Company must use crop  insurance  contracts,  standards,
                    procedures,  methods, and instructions as issued or approved
                    by  FCIC in the  sales,  service,  and  loss  adjustment  of
                    eligible crop insurance contracts.

       3.     Managing General Agents

              If the  Company  will  perform  its  responsibilities  under  this
              Agreement  through a MGA,  the Company must certify to FCIC in the
              Plan of Operations  that such MGA is in full  compliance  with the
              laws  and   regulations   of  the  State  in  which  such  MGA  is
              incorporated or, in the absence of such laws and regulations, with
              the National  Association  of Insurance  Commissioners'  Model Act
              governing MGAs.

H.     Access to Records and Operations

       Upon written request, unless otherwise authorized by the Manager of FCIC,
       the Company must provide FCIC reasonable access to its offices, personnel
       (including  agents and loss  adjusters),  and all records that pertain to
       the business  conducted  under this  Agreement at any time during  normal
       business hours for the purpose of  investigation,  audit or  examination,
       including access to records on the operation of the Company.  The Company
       must designate in its Plan of Operations  each location where records and
       documents are retained.  Records  pertaining to premium or liability must
       be  retained  until 3 years  after  the  annual  settlement  date for the
       respective reinsurance year. FCIC may require on a case-by-case basis the
       Company to retain certain  specified records for a longer period if it so
       notifies  the  Company  in  writing at any time  before  disposal  of the
       record.  The Company should be aware that the statute of limitations  for
       bringing  a suit for any  breach of this  Agreement  is 6 years.  For the
       purpose of this  section the term  "FCIC"  includes  all U.S.  Government
       agencies  including but not limited to USDA Office of Inspector  General,
       the General Accounting Office, and the Department of Labor.

I.     Compliance and Corrective Action

       1.     The Company  must be in  compliance  with the  provisions  of this
              Agreement, the laws and regulations of the United States, the laws
              and  regulations of the States and locales in which the Company is
              conducting  business under this  Agreement,  unless such State and
              local laws and  regulations  are in conflict with this  Agreement,
              and all  bulletins,  handbooks,  instructions,  and  procedures of
              FCIC.

       2.     The Company must cooperate with FCIC in the review of Company
              operations.




<PAGE>




       3.     If FCIC finds that the Company has not complied with any provision
              of this Agreement, and the Company has not taken appropriate steps
              to correct the  reported  act of  non-compliance,  FCIC may at its
              discretion, require that the Company take corrective action within
              45 days of the  date of such  written  demand.  The  Company  must
              provide  FCIC  with  satisfactory   documentary  evidence  of  the
              corrective   action   taken  to  address  the   reported   act  of
              non-compliance.

       4.     Whenever an act or omission by the Company  materially affects the
              existence or amount of the  indemnity  or premium paid  (including
              but not limited to incorrect APH calculations; improper adjustment
              of  loss;  sales  agents  or  sales  supervisors  involved  in the
              adjustment of losses; failure to verify eligibility for insurance,
              acreage  planted or prevented  from  planting,  insurable  shares,
              insurable   causes  of  loss,  unit   divisions,   or  nonstandard
              classifications)  and FCIC is able to determine the correct amount
              of indemnity or premium that should have been paid:

              a.    FCIC shall require the Company to report to FCIC through
                    the DAS system the correct amount of indemnity or
                    premiums, and

              b.     FCIC may require the Company to refund any A&O subsidy
                     that exceeds the amount the Company was entitled to
                     receive.

       5.     The Company provides  valuable program delivery services for which
              payment is made in the form of A&O  subsidy.  FCIC and the Company
              agree that FCIC is damaged by a failure of the  Company to provide
              services or to comply with FCIC  requirements  and  procedures and
              that the value of such  service or failure to comply is  difficult
              to  determine  because  damages  are  uncertain  and the amount of
              services or failure to comply is difficult  to quantify.  FCIC and
              the Company agree that in view of the  difficulty  of  determining
              the exact  value of each  service,  the amounts  stated  below are
              reasonable estimates of the value of such services.

              a.     If the Company's loss adjustment  performance and practices
                     are not carried out in accordance  with this  Agreement and
                     FCIC assumes the Company's loss adjustment obligations, the
                     Company shall pay FCIC an amount equal to 10 percent of the
                     net book premium on all eligible crop  insurance  contracts
                     adjusted or readjusted by FCIC.

              b.     If this  Agreement  should be  terminated  for  cause,  the
                     Company shall pay FCIC the  equivalent of 10 percent of the
                     net book premium for all eligible crop insurance contracts.

              c.     In the event of the following failures to comply with the
                     terms and conditions of this Agreement, the Company
                     shall pay FCIC as follows:



<PAGE>



                                                               154

                     i.    For failure to follow  approved  sales agent training
                           requirements contained in Manual 14, 1 percent of the
                           net  book   premium  for  eligible   crop   insurance
                           contracts  written  by sales  agents  not  trained in
                           accordance  with  Manual 14 if, for the  purposes  of
                           this  subparagraph  only,  the  number of such  sales
                           agents   exceeds  5  percent  of  all  sales   agents
                           requiring training;

                     ii.   For failure to follow approved loss adjuster training
                           requirements contained in Manual 14, 1 percent of the
                           net  book   premium  for  eligible   crop   insurance
                           contracts  adjusted by loss  adjusters not trained in
                           accordance  with  Manual 14 if, for the  purposes  of
                           this subparagraph  only, the number of loss adjusters
                           exceeds 5  percent  of the loss  adjusters  requiring
                           training; and

                     iii.  For failure to follow approved quality control review
                           requirements  in Manual 14, 1 percent of the net book
                           premium for eligible  crop  insurance  contracts  not
                           reviewed in accordance with Manual 14, but which were
                           required to be reviewed, if the number of reviews not
                           performed exceeds 5 percent of the number required.

              d.     For  failure  to  follow  FCIC  approved   procedure   that
                     materially impacts the existence or amount of the loss, the
                     Company shall pay to FCIC 3 percent of the net book premium
                     of all eligible contracts for which each failure occurred.


<PAGE>


              e.    The total amount payable under sections V. I. 5. c.
                    and d. may not exceed 4.5 percent of the net book
                    premium on each eligible crop insurance contract for which
                    any payment is due FCIC under sections V. I. 5. c. or d.

6.     Any payment due from or paid by the Company  under this section  shall be
       in addition to and without  prejudice to any other rights of FCIC, or the
       United States,  if the deficiency in compliance with terms and conditions
       of this  Agreement  result from the  Company's  violation  of criminal or
       civil false claims statutes.

       7.     FCIC may, at its sole discretion, waive, reduce or delay
              repayment.

       8.     Any  amounts due from or paid by the  Company  under this  section
              shall be paid by the Company to FCIC on the next  monthly  summary
              or annual settlement  report after a final  determination by FCIC.
              Any  payment  not timely  paid will be subject  to  provisions  of
              section V.C.

       9.     If FCIC collects any amount in accordance with section V. I. 4.
              or V.I.5.a. or b., then FCIC will not require the
              Company to pay any amount under section V. I. 5.d. on the same
              eligible crop insurance contracts.

       10.    Nothing  in this  subsection  prevents  FCIC from  collecting  any
              amounts due under this  subsection from the Company and suspending
              or terminating this Agreement.

J.     Suspension

       FCIC may suspend this  Agreement  for cause due to a material  failure to
       perform  or  comply  with  obligations  under  this  Agreement.  If  this
       Agreement is suspended for cause:

       1.     The suspension  will remain in effect until FCIC  determines  that
              the  Company  has  corrected  the  failure  and has taken steps to
              prevent its occurrence.

       2.     While  suspended,  the Company may not sell any new crop insurance
              contracts under this Agreement.  However, if required by FCIC, the
              Company  must  service all eligible  crop  insurance  contracts in
              effect at the time of the suspension.

       3.     If the Company does not properly  service  existing crop insurance
              contracts as required by section  V.J.2.  or has not corrected the
              failure  within 45 days of the date the Company is notified of the
              suspension, this Agreement will automatically terminate at the end
              of the reinsurance year.

K.     Termination

       1.     FCIC may  terminate  this  Agreement  for cause due to a  material
              failure  to  perform  or  comply  with   obligations   under  this
              Agreement.  If this Agreement is terminated  for cause,  FCIC will
              not provide  reinsurance  for eligible  crop  insurance  contracts
              issued or  renewed  after the date of the  termination.  FCIC will
              provide  reinsurance  for  eligible  crop  insurance  contracts in
              effect  as  of  the  date  of  the  termination   until  the  next
              cancellation date.

       2.     If FCIC  terminates  this  Agreement  for the  convenience  of the
              government,  FCIC will not provide  reinsurance  for any  eligible
              crop  insurance  contract  renewed  or  issued  after  the date of
              termination.  FCIC will  continue  to provide  A&O  subsidy,  risk
              subsidy,   and  reinsurance  to  the  extent  allowed  under  this
              Agreement  for eligible crop  insurance  contracts in effect as of
              the date of the termination until the next  cancellation  date. No
              additional  damages or amounts will accrue to the Company  because
              of such termination.

L.     Disputes and Appeals

       1.     The Company may appeal any actions, finding, or decision of FCIC
              under this Agreement in accordance with the provisions
              of 7 C.F.R. 400.169.




<PAGE>


       2.     FCIC shall generally issue a fully  documented  decision within 90
              days of the  receipt  of a notice of  dispute  accompanied  by all
              information  necessary to render a decision.  If a decision cannot
              be issued  within 90 days FCIC will notify the Company  within the
              90 day period of the reasons why such a decision  cannot be issued
              and when it will be issued.

M.     Renewal

       This  Agreement  will continue in effect from year to year with an annual
       renewal date of July 1 of each succeeding year unless FCIC gives at least
       180 days advance notice in writing to the Company that the Agreement will
       not be  renewed.  This  Agreement  will  automatically  terminate  if the
       Company  fails to  submit a Plan of  Operations  by the date such Plan of
       Operations is due unless such other date is approved by FCIC in writing.

N.     Appropriation Contingency

       The payment of  obligations  of FCIC under this  Agreement are contingent
       upon  the  availability  of  appropriations.  Notwithstanding  any  other
       provision  of this  Agreement,  FCIC's  ability to sustain the  Agreement
       depends  upon  the  FCIC's  appropriation.  If  FCIC's  appropriation  is
       insufficient to pay the obligations under this Agreement, and FCIC has no
       other source of funds for such payments, FCIC will reduce its payments to
       the Company on a pro rata basis or on such other method as  determined by
       FCIC to be fair and equitable.

O.     Replacement

       This  Agreement  replaces any  previous  Standard  Reinsurance  Agreement
       between  FCIC and the  Company,  except that any  obligations  continuing
       under  any  previous  Agreement  will  remain  subject  to the  terms and
       conditions of such previous Agreement.

P.     Cut-Through and Preemption of State Law

1.   Whenever the Company and its policy issuing  company,  if  applicable,  are
     unable to fulfill  their  obligations  to any  policyholder  by reason of a
     directive or order duly issued by any Department of Insurance, Commissioner
     of  Insurance,  or by any court of law having  competent  jurisdiction,  or
     under  similar  authority  of any  jurisdiction  to which  the  Company  is
     subject,  all eligible crop insurance  contracts affected by such directive
     or order that are in force and subject to this  Agreement as of the date of
     such  inability or failure to perform will be  immediately  transferred  to
     FCIC without  further action of the Company by the terms of this Agreement.
     FCIC will assume all obligations for unpaid losses whether occurring before
     or after the date of  transfer,  and the Company must pay FCIC all funds in
     its possession  with respect to all such eligible crop insurance  contracts
     transferred including,  but not limited to, premiums collected. The Company
     hereby  assigns to FCIC the right to all  uncollected  premiums on all such
     policies.  No assessment for any guarantee funds or similar programs may be
     computed  or levied on the  Company  by any State for or on  account of any
     premiums payable on eligible crop insurance  contracts reinsured under this
     Agreement.

2.   The provisions of 7 C.F.R.  part 400, subpart P pertaining to preemption of
     State or local laws or regulations are specifically incorporated herein and
     made a part hereof.

Q.     Litigation and Assistance

       1.     The  Company's  expenses  incurred as a result of  litigation  are
              covered by the A&O subsidy and the  administrative fee paid by the
              producer for CAT  coverage.  FCIC has no obligation to provide any
              other funds to reimburse the Company for litigation costs.

       2.     FCIC will also provide indemnification,  as authorized by the Act,
              including  costs and  reasonable  attorney  fees  incurred  by the
              Company, that result solely from errors or omissions of FCIC.

       3.     The Company may request FCIC to provide  non-monetary  assistance,
              including  witnesses,  documents,  and  direction  or  such  other
              assistance  as FCIC deems  reasonable.  FCIC may,  at its  option,
              elect to provide such  assistance  or it may elect to intervene in
              any  legal  action.   The  Company   agrees  not  to  oppose  such
              participation.  FCIC will only agree to the Company's  request for
              litigation assistance if the Company:

              a.     Immediately notifies FCIC in writing of the requested
                     action setting forth the reasons such action would be in
                     the best interests of FCIC;

              b.     Presents all legal arguments favorable to its defense
                     including those suggested by FCIC; and

              c.     Does not join FCIC as a party to the action unless
                     FCIC agrees in writing to be joined as a party.

0.       4.   FCIC will, at its sole discretion, determine if the requested
              action under this section will be granted.  The criteria
              to determine such action will be whether such action is in
              the best interest of FCIC and the crop insurance program.




<PAGE>


R.     Suspension and Debarment

       Any person or business  entity who has been debarred or suspended by FCIC
       or any other U.S.  Government  Agency,  may not be used by the Company in
       any manner which involves performance under this Agreement.

S.     Member - Delegate

       No member of or delegate to Congress nor any resident  commissioner  will
       be admitted to any share or part of this Agreement or to any benefit that
       may arise therefrom,  except that this provision will not be construed to
       apply to a benefit from this Agreement that accrues to a corporation  for
       its general benefit.  Members of or delegates to Congress are eligible to
       purchase  a crop  insurance  contract  for any crop in which they have an
       insurable interest.

T.     Discrimination

       The Company must not  discriminate  against any  employee,  applicant for
       employment,  insured,  or applicant for insurance because of race, color,
       religion,  sex,  age,  physical  handicap,  marital  status,  or national
       origin.

 U.    Set Off

1.     1.   Funds due from the Company may be set off under the provisions of
            this Agreement or under the provisions of 31 U.S.C. chapter 37.

       2.     Any amount due the Company under this  Agreement is not subject to
              any lien,  attachment,  garnishment,  or any other similar process
              prior to that amount being paid under this Agreement,  unless such
              lien,  attachment,  or  garnishment  arises  under title 26 of the
              United States Code.

       3.     Set off as provided in this  section  will not deprive the Company
              of any right it might  otherwise have to contest the  indebtedness
              involved in the set off action by administrative appeal.

       4.     In the event a Company fails to pay any amount when due under this
              Agreement,  any further  payments to the Company from FCIC will be
              set off against any amounts  due FCIC  regardless  of  reinsurance
              year until these amounts are paid with appropriate interest.

       5.     If an assignment has been made pursuant to the provisions of
              section V.V. the following provisions will apply with
              respect to set off:

              a.     Notwithstanding the assignment, FCIC may set off:
                       i.  Any amount due FCIC under this Agreement;

                      ii.  Any  amounts for which the Company is indebted to the
                           United  States  for  taxes for which a notice of lien
                           was  filed  or  a  notice  of  levy  was   served  in
                           accordance   with  the  provisions  of  the  Internal
                           Revenue  Code  of  1954  (26  U.S.C.  6323),  or  any
                           amendments thereto or modifications  thereof,  before
                           acknowledgment  by FCIC of  receipt  of the notice of
                           assignment; and

                     iii.  Any amounts, other than amounts specified in
                           paragraphs i. and ii. above due to FCIC or any
                           other agency of the United States, if FCIC notified
                           the assignee of such amounts to be set off at or
                           before the time acknowledgment was made of receipt
                           of the notice of assignment.

V.     Assignment

       No  assignment  by the  Company  shall be made of the  Agreement,  or the
       rights  thereunder,  unless  the  Company  assigns  the  proceeds  of the
       Agreement  to a bank,  trust  company,  or other  financing  institution,
       including any federal lending agency, or to a person or firm that holds a
       lien or encumbrance at the time of assignment,  and the Company  receives
       the prior  approval of FCIC to assign the  proceeds of this  Agreement to
       any  other  person  or  firm:  Provided,  That  such  assignment  will be
       recognized  only if and when  the  assignee  thereof  files  with  FCIC a
       written  notice  of the  assignment  together  with a signed  copy of the
       instrument of assignment, and, Provided further, That any such assignment
       must cover all amounts  payable and not already paid under the Agreement,
       shall not be made to more than one  party  and  shall not be  subject  to
       further  assignment,  except that any such  assignment may be made to one
       party as agency or trustee for two or more parties.

W.     Liability for Agents and Loss Adjusters

       The Company is solely  responsible  for the  conduct and  training of its
       personnel,  agents  and loss  adjusters  within  the  parameters  of this
       Agreement.  Liability  incurred,  to the  extent it is caused by agent or
       loss  adjuster  error or  omission,  or failure to follow  FCIC  approved
       policy or  procedure,  is the sole  responsibility  of the  Company.  The
       assumption of  responsibility  under this section is only for the purpose
       of this  Agreement and may not be relied upon by any person or entity not
       a party to this  Agreement for any purpose.  Reinsurance of eligible crop
       insurance  contracts  may only be  denied if there  exists a  pattern  of
       failure to follow FCIC-approved  policies or procedures,  or allowance of
       errors or  omissions,  or the  Company  knew or should  have known of the
       failure to follow  FCIC-approved  policies  or  procedures,  or errors or
       omissions,   and  failed  to  take  appropriate  action  to  correct  the
       situation.


<PAGE>


X.     Performance Audit

       Notwithstanding  any other  provision  hereunder,  FCIC must  notify  the
       Company that the Company may be responsible  for an error,  omission,  or
       failure to follow FCIC approved policy or procedures; and that a debt may
       be owed;  within 3 years of the end of the insurance  period during which
       the error,  omission, or failure is alleged to have occurred. The failure
       to provide timely notice  required  herein shall only relieve the Company
       from  liability  for the alleged  debt owed.  Three years after the first
       annual  settlement,  such reinsurance year shall be deemed finally closed
       unless  there are claims  still  under  investigation  or in  litigation,
       including administrative  proceedings,  or arbitration.  Such time frames
       will not be applicable to errors, omissions or procedural violations that
       are willful or intentional.

Y.     Resolution of Disagreements

       If the Company  disagrees  with an act or omission of FCIC,  except those
       acts  implemented  through the  rulemaking  process,  the  Company  shall
       provide  written  notice of such  disagreement  to the  Manager  of FCIC.
       Within 10 business  days of receipt of notice,  the Manager or a designee
       will  schedule a meeting  with the  company in an attempt to resolve  the
       disagreement.  Notwithstanding  any other provision in this section,  any
       subsequent  decision by FCIC on the act or omission  will be final in the
       administrative process and, therefore subject only to review by the Board
       of Contract Appeals in a matter relating to this Agreement or to judicial
       review.  Nothing  herein  excuses the  Company's  performance  under this
       Agreement during the attempted resolution of the dispute or constitutes a
       waiver of the Company's right to any remedy authorized by law.


<PAGE>


SECTION VI.   Certification

       The  undersigned  acknowledges  that the Company's Board of Directors has
       authorized  the  Company  to enter  into this  Agreement  and the Plan of
       Operations.  The undersigned  acknowledges any  misrepresentation  in the
       submission  of this  Agreement and  information  contained in the Plan of
       Operations  may  result  in  civil  or  criminal  liability  against  the
       undersigned or their representatives.

                            APPROVED AND ACCEPTED FOR

      THE FEDERAL CROP

INSURANCE CORPORATION                          THE COMPANY



              Signature                                          Signature

              Name                                                   Name

              Title                                                  Title

              Date                                                    Date