THIS REINSURANCE AGREEMENT


                                is made between


                  STANDARD LIFE INSURANCE COMPANY OF INDIANA

                           of Indianapolis, Indiana
                  (hereinafter referred to as "the Company")


                                      and


                        THE MERCANTILE AND GENERAL LIFE
                        REASSURANCE COMPANY OF AMERICA
                       (A MEMBER OF THE SWISS RE GROUP)

                             of Lansing, Michigan
      Executive Offices:  161 Bay Street, Suite 3000, Canada Trust Tower
                           Toronto, Ontario  M5J 2T6
                 (hereinafter referred to as "the Reinsurer")


                   The following Articles, qualified by the
                     Exhibits of the Agreement, will form
                          the basis of the Agreement.





         This Agreement may be referred to as Agreement No. SBA206-97



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                              TABLE  OF  CONTENTS


                                   ARTICLES

I       Business Covered - Forms, Manuals, Issue Rules

II      Automatic Coverage - Facultative Coverage

III     Reinsurance Basis - Reinsurance Premiums - Currency

IV      Mode of Submission - Data Notification

V       Premium Accounting

VI      Policy Changes - Lapses - Reinstatements - Minimum Reinsurance Limit

VII     Increase in Retention - Recapture

VIII    Liability

IX      Claims

X       Oversights - Arbitration

XI      Insolvency

XII     DAC Tax - Taxes and Expenses

XIII    Alterations to Agreement - Parties to Agreement - Good Faith -

      Confidentiality

XIV     Duration of Agreement - Severability - Benefit - Construction



                                   EXHIBITS

A-I     Business Covered

A-II    Underwriting Forms and Issue Rules

B       Application for Reinsurance

C       Premium Rates and General Terms, Administration Instructions

D       The Company's Retention Limits and Issue Limits

E       The Reinsurer's Acceptance Limits

F       Reinsurance Reports

G       DAC Tax Election



                                  ARTICLE  I

Business    This Agreement applies to all insurance policies and 
Covered     supplementary benefits and riders attached thereto (hereinafter 
            referred to as "policies"), as listed in Exhibit A-I,  which  
            have  been  issued  directly  by  the  Company in accordance  
            with  its  underwriting  rules,  premium rates and policy forms
            provided to the Reinsurer.

            The Company will cede, and the Reinsurer will accept amounts of 
            these policies in accordance with the terms and conditions of 
            this Agreement.

            The amounts retained by the Company on the business covered by
            this Agreement shall  not  be  reinsured  elsewhere by the 
            Company on any basis whatsoever without prior written consent 
            from the Reinsurer.



Forms       The Company shall provide full disclosure of all material facts 
Manuals,    regarding the policies.  The forms, manuals  and  issue rules the 
ISSUE RULES Company shall file with the Reinsurer include but are not limited  
            to  the copies of the applicable policy forms, rates, retention 
            schedules, application  forms,  underwriting requirements    
            (inspection   limits,   non-smoking   criteria,   financial 
            questionnaires, smoking  questionnaires  etc.)  and 
            authorization forms for release of medical information.
            The underwriting evidence and issue rules to be filed with the 
            Reinsurer are also listed  in Exhibit  A-II. The Company hereby 
            declares that its forms are in accordance with current M.I.B. 
            regulations.

           IF NEW MATERIAL IS PUBLISHED, OR CHANGES ARE MADE IN THE MATERIAL 
           ALREADY FILED, THE COMPANY  AGREES  TO  PROMPTLY PROVIDE THE 
           REINSURER WITH COPIES OF SUCH MATERIAL.  ANY MATERIAL CHANGE IN 
           THE UNDERWRITING AND ISSUE RULES SHALL BE SUBJECT TO THE APPROVAL 
           OF  THE  REINSURER BEFORE BEING APPLIED TO POLICIES COVERED BY 
           THIS AGREEMENT.


              


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                                  ARTICLE  II

Automatic  Except  as provided below for facultative coverage, the Company 
Coverage   will retain the amount  stipulated  in  Exhibit  D  according  to 
           the age and morbidity rating  at the time of underwriting.  The 
           Company will  automatically  cede the amount  of  reinsurance  
           to  the  Reinsurer  according to the Automatic Acceptance Limits 
           specified in Exhibit E, taking into  account  the age and
           morbidity rating at the time of underwriting.

           If  any of the following situations have occurred, the Reinsurer 
           may revise the Automatic  Acceptance  Limits  in  Exhibit E by 
           giving ninety (90) days written notice to the Company of the new 
           limits and their effective date:

           (a) the  Reinsurer  has  conducted an audit  of  the  records,  
           books and documents relating to the reinsurance under this 
           Agreement;

           (b) the Company has changed its practices and procedures 
           applicable to the policies covered under this Agreement;

           (c) a material change in the  underwriting  personnel  of  the 
           Company has occurred.

                                        
           It is  understood  that  the  amount retained by the Company shall 
           include its critical illness retention under any in force policies.

Facultative Ifthe Company receives an application that meets any of the 
reinsurance criteria below, the Coverage shall be on a facultative basis:

            (a) the amount applied for  exceeds  the  sum  of  the Company's 
            Retention Limit set out in Exhibit D and the Automatic Acceptance
            Limit set out in Exhibit E;

            (b) the  total  of  the  new  reinsurance  required and the 
            amount already reinsured on that life under this Agreement and 
            all other Agreements between  the  Reinsurer  and  the  Company,  
            exceeds the Automatic Acceptance Limits set out in Exhibit  E;

            (c) the Company intends to retain less than the Retention Limit 
            set out in Exhibit  D  taking  into  account  the  applicant's 
            age and morbidity rating;


            (d) the  amount  applied  for  and the amount already in force on 
            the same life exceeds the Jumbo Limit set out in Exhibit  E;

            (e) the  application  is on a life  for  which  an  application  
            had  been submitted by the Company  on  a facultative basis to 
            the Reinsurer or any other reinsurer, within the  last  3  years 
            unless the reason for submitting facultatively no longer applies.


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 Any application  for  a policy on any plan, supplementary benefits or rider
 shown in Exhibit  A-I may be offered facultatively.

 The relevant terms and  conditions  of  this Agreement shall apply to those
 facultative applications that are accepted by the Reinsurer.

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                                 ARTICLE  III

Reinsurance  Policies reinsured under this Agreement shall  be  on  the basis 
Basis        set out in Exhibit C.

Reinsurance  The  premiums  to  be  paid to the Reinsurer by the Company for 
Premiums     reinsurance shall be in accordance with the terms set out in 
             Exhibit  C.

Currency     All submissions under this  Agreement  shall  be  effected  in 
             the currency specified  in  Exhibit  A-I  and  the  premiums  
             and  liabilities shall  be expressed and payable in that currency.


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                                  ARTICLE  IV

Mode of                                 AUTOMATIC SUBMISSIONS
Submission For all automatic submissions the Company shall advise the 
           Reinsurer in the manner described in Exhibit  F.

           The  Company  agrees  to  send to the Reinsurer upon request, 
           copies of the application, underwriting papers  and  other  papers  
           on any life reinsured automatically under this Agreement.

                                        FACULTATIVE  SUBMISSIONS
           The Company may apply for reinsurance by sending to the Reinsurer, 
           copies of  all  pertinent  papers,  including  the  original  
           application, medical examination,  inspection reports, physician's 
           statements,  urinalyses,  and all  other  information   which  the  
           Company  may  have  relating  to  the insurability of the risk 
           along  with  an  Application  for  reinsurance,  a sample of which 
           is attached as Exhibit  B.

           After  consideration  of  the  reinsurance  application  and  
           papers, the Reinsurer  shall  promptly inform the Company of its 
           underwriting decision.
           
           If the underwriting decision is acceptable to the Company and the 
           Company's policy is subsequently  placed  in  force  in  
           accordance with the issuance rules provided to the Reinsurer, the 
           Company shall  advise the Reinsurer in the manner described in 
           Exhibit  F.

           If any application to the Reinsurer is not to be placed with the 
           Reinsurer, the  Company  shall  advise the Reinsurer in writing 
           (indicating the reason for non-placement) so that the Reinsurer 
           can complete its records.


Data          For all business reinsured  under  this Agreement, the Company 
Notification  shall self-administer reinsurance transactions in  a  format 
              in substantial accordance with the Society of Actuaries 
              Guidelines.  The  Company  shall  provide the Reinsurer  with  
              the  reports as set out in Exhibit  F.  The Company,  upon
              request, will provide the Reinsurer with any additional 
              information related to the business reinsured  under  this  
              Agreement  and  which the Reinsurer requires in order to 
              complete its financial statements.


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                                  ARTICLE  V

Premium      Reporting
Accountin    The Company  undertakes  to  send  to  the  Reinsurer, during 
             each accounting period, a report as set out in Exhibit  F 
             showing  all first year and renewal premiums  which  became  
             due  during  the previous accounting  period.   Also included 
             will be any adjustments made necessary  by  changes  in  
             reinsurance effective during the previous period, or changes 
             due to any corrections  to a previous report.

             The  balance  due shall then become payable.  If the balance so 
             calculated is due to the Reinsurer,  the  Company  shall forward 
             a remittance in settlement with the report. If the balance is 
             due  to  the  Company, the Reinsurer shall forward a remittance 
             in settlement within fifteen (15) days of receipt of the report.

             Interest may be charged on overdue premiums.

             NON-PAYMENT OF PREMIUMS
             The  Reinsurer  may terminate its liability for any reinsurance 
             for which the reinsurance premiums have not been paid within 
             sixty (60) days after billing,by giving fifteen  (15) days 
             written notice by registered mail of such action to the Company.

             The  Reinsurer's  right  to  terminate reinsurance for 
             non-payment of premium shall  not  prejudice its right  to  
             collect  premiums  for  the  period  the reinsurance was in 
             force.

             During the period  premiums  are  outstanding,  the  Reinsurer 
             may offset the amount of any premiums in arrears against amounts 
             owed to the Company.

             The  Company  shall  not  force  termination  under  the 
             provisions  of  this paragraph  solely  to  avoid  the recapture 
             requirements or  to  transfer  to another reinsurer the block of 
             business reinsured under this Agreement.




             UNEARNED PREMIUM
             The  Company  shall take credit, without interest, for any 
             unearned premiums, net of allowances,  arising  due  to 
             reductions or lapses or cancellations or critical illness claims 
             or death claims,  in  its  account. The Company shall pay the 
             balance of arrears of premiums due under a reinstated policy.  
             In the event  of  termination,  lapse, or critical illness 
             claim,  or  death  claim, unearned premiums, net of allowances
             and policy fees, will be refunded.


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                                  ARTICLE  VI

Policy     Changes  to  policies  reinsured  under  this  Agreement  shall  
Changes    be  made  in accordance with the provisions set out below.

           If the change affects the  plan,  the  amount  of  reinsurance,  
           premiums  or allowances  under  the  submission, the Company shall 
           inform the Reinsurer in the subsequent Reinsurance Report as set 
           out in Exhibit  F.


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       PLAN  CHANGES
       (i) Automatic Submissions:

       Unless  otherwise  agreed,  whenever  the  plan of insurance on any 
       policy reinsured hereunder is being changed to a  new  critical  
       illness plan, including  internal  replacements,  and  the  Company  
       is not obtaining evidence  in  accordance  with  the  Company's full 
       new business issue underwriting rules, the reinsurance shall  remain  
       in  effect  with the Reinsurer on the following basis;

                   (a)   the  reinsurance  rates  and  the  durations shall 
                   be based on those applicable to the original submission;

                   (b)   the reinsurance amount at risk shall  be determined 
                   according to the terms of this Agreement but in no event  
                   shall  be  more than the original submission at the time 
                   of the change in plan.

       (ii) Facultative Submissions: 
       Any  changes  shall  be  subject  to  the Reinsurer's approval only 
       if the Company  is obtaining evidence in accordance  with  the  
       Company's  new business underwriting rules.  The applicable 
       reinsurance terms shall be agreed by the Company and the Reinsurer.

       INCREASE  IN  AMOUNT  AND  REUNDERWRITING

       (i) Automatic  Submissions:
       Any reunderwriting,  (including  any  change in morbidity rating), or 
       non-contractual increase in amount at risk  for  any  submission  
       shall  be subject  to  the  Company's  full new business underwriting 
       rules or as agreed otherwise with the Reinsurer.

       The amount of the increase shall  be  subject  to  the  terms  set  
       out in Exhibit C.

       If the amount of the policy shall increase above the jumbo limit 
       (Exhibit E)  or  if  the  amount  to be reinsured exceeds the 
       automatic coverage limits, the increase shall be subject to the 
       Reinsurer's approval.

       (ii) Facultative  Submissions:
       Any  reunderwriting  or  non-contractual increase, including any 
       change in morbidity rating shall be subject to the Reinsurer's 
       approval.

       REDUCTIONS
       If the amount of insurance of a policy issued by the Company is 
       reduced then the amount  of  reinsurance on that life shall be reduced 
       effective the same date by the lesser  of  the full amount of the 
       reduction under the original policy or the full amount of reinsurance, 
       unless the reinsurance is a quota share of the policy issued by the  
       Company,  in  which  case  the  reduction would be proportional.

       The reduction will first apply to any reinsurance on the policy being 
       reduced and then in a chronological order according to policy date 
       ("first in, first out") to any reinsurance on other critical illness 
       policies in force on the life.  However,  the  Company  shall not be 
       required to  assume a risk for an amount in excess of its regular  
       retention  for  the  age  at  issue  and the morbidity rating of the 
       policy under which reinsurance is being terminated.

       If the reinsurance for a policy has been placed with more than one 
       reinsurer, the reduction shall be applied to all reinsurers in 
       proportion to the amounts originally reinsured with each reinsurer.

       SPECIAL  CHANGES
       If  any special or unusual change, which is not covered above and 
       which may affect the terms of the submission in question, is requested, 
       the Reinsurer's approval shall be obtained before such a change 
       becomes effective.

Lapses          When a reinsured policy lapses, the submission in question 
                shall be canceled effective the same date.

Reinstatements  If a policy reinsured on an automatic basis is reinstated in 
                accordance with its terms  or  the  rules  of  the Company, 
                as provided to the Reinsurer, the reinsurance  shall  be  
                reinstated   automatically  by  the  Reinsurer.   The 
                Reinsurer's approval is required only  for the reinstatement 
                of a facultative policy  when the Company's regular 
                reinstatement  rules  indicate  that  more evidence than a 
                Statement of Good Health is required.


Minimum         The minimum amount to be reinsured shall be as set out in 
Reinsurance     Exhibit  C.
LIMIT



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                                 ARTICLE  VII
Increase in  The  reinsurance  under this Agreement shall be maintained in 
Retention    force without reduction except as specifically provided for 
             elsewhere in this Agreement.

             The Company may increase  the  maximum  dollar  amount(s) of its  
             limits of retention, as opposed to its quota share of each  
             policy,  on  new business being issued at any time by giving 
             written notice to the Reinsurer  of  the new  limits  of  
             retention  and  the  effective  date of such new retention
             schedule.

             The Company's critical illness retention limits are set out in 
             Exhibit  D.

Recapture    The  Company  may  apply  the  new  limits of critical illness 
             retention to existing reinsurances and reduce reinsurance in 
             force provided:

             (a) The Company gives the Reinsurer  written  notice  of  its 
             intention to recapture within 90 days of the effective date of 
             the increase in its retention.

             (b) Such  reductions  are  made  on  the  next  anniversary of 
             each policy affected and with no reduction being made until  
             such reinsurance has been in force for the period stated in 
             Exhibit  C.

             (c) The  Company  had  retained its full critical illness 
             retention (not a special retention limit)  for  the  plan, age 
             and morbidity rating at the time the policy was issued.

             (d) The  Company  has  applied  its  increase in retention in a 
             consistent manner to all categories of its Retention  Limits  
             set out in Exhibit D.

              No reduction shall be made if the Company has either obtained 
              or increased stop loss  reinsurance  coverage  as  
              justification  for  the  increase  in retention.

              In applying its new retention to existing reinsurance, the 
              rating at the time of issue and the issue age of the existing 
              reinsurance shall be used to determine the amount of the 
              Company's new retention.

              Recapture as provided herein shall be optional with the 
              Company, but if any reinsurance is recaptured, all reinsurance 
              eligible for recapture under the provisions of this Article 
              must be recaptured.  If there is reinsurance in other companies 
              on risks eligible for recapture, the necessary reduction is to 
              be applied pro rata to the total outstanding reinsurance.

              The amount of reinsurance eligible for recapture is based on 
              the reinsurance net amount at risk  as of the date of recapture.

              The Reinsurer shall not be liable, after the effective date of 
              recapture, for any reinsured policies or portions of such 
              policies eligible for recapture, which the Company has 
              overlooked.  The Reinsurer shall be liable only for a credit of 
              the premiums received after the recapture date, less any 
              allowance and without interest.

              The terms and conditions for the Company to recapture 
              reinsurance in force under this Agreement due to the 
              insolvency of the Reinsurer are set out in the Insolvency 
              clause in Article  XI of this Agreement.

              If the Company transfers business which is reinsured under this 
              Agreement to a successor company, then the successor company 
              has the option to recapture the reinsurance, in accordance with 
              the recapture criteria outlined in this Article, only if the 
              successor company has a higher retention limit than the Company.


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                            ARTICLE  VIII

Liability    AUTOMATIC REINSURANCE
             The  Reinsurer's  liability  for  any policy ceded automatically 
             under this Agreement  shall  begin  simultaneously   with  the  
             Company's  contractual liability for the policy reinsured.

             FACULTATIVE REINSURANCE
             If  a  policy  covered under this Agreement is offered 
             facultatively to the Reinsurer only,  then  the Reinsurer's 
             liability shall begin simultaneously with the Company's 
             contractual  liability for this facultative policy.  The amount 
             of the Reinsurer's liability  shall be the lesser of the 
             Reinsurer's offer  or  the Automatic Acceptance Limits  set  
             out  in  Exhibit  E.   The Reinsurer's  liability  ceases  if 
             the Reinsurer declines the risk and duly notifies the Company. 
             The Reinsurer's  liability  would  also cease if the Company 
             declines the Reinsurer's offer.

             If,  however,  a policy is offered facultatively to any other 
             reinsurer, in addition to the  Reinsurer,  the  liability of the 
             Reinsurer shall commence when  the  Reinsurer  has received 
             notice  from  the  Company,  during  the lifetime of the 
             insured,  that the Reinsurer's offer has been accepted. The
             Company shall have one hundred  and  twenty (120) days from the 
             date of the Reinsurer's  final  offer  in  which  to  place the   
             policy with the insured/owner,  after  which time the 
             Reinsurer's offer shall expire unless the Reinsurer explicitly  
             states  in writing that the offer is extended for some further 
             period.

             The  Reinsurer may assume liability for claims arising prior to 
             the time of notification  if  it is shown to the satisfaction of 
             the Reinsurer that the policy would have been reinsured with the 
             Reinsurer.

             DURATION
             The  liability  of  the  Reinsurer for all submissions under 
             this Agreement shall cease at the same time  as  the  liability  
             of the Company ceases and shall not exceed the Company's 
             contractual liability under the terms of its policies.

             Notwithstanding  the  foregoing,  the Reinsurer may terminate 
             its liability for any policies for which premium  payments  are  
             in arrears, according to the terms set out in Article V of this 
             Agreement.

             It  is understood that the Reinsurer's liability for a claim 
             shall be based on the reinsured net amount at risk as of the 
             date the claim is incurred.

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                                  ARTICLE  IX

Claims         Notice
               The Company will notify the Reinsurer as soon as reasonably 
               possible after the  Company  receives the claim.  All papers 
               in connection with the claim shall be submitted to the 
               Reinsurer and the Company shall wait for up to ten days from 
               the date of  submission  for  the Reinsurer's recommendation
               before conceding liability or making settlement to the claimant.

               The  Company  shall provide the Reinsurer with  all  further  
               reports  and papers required by the Reinsurer for its 
               consideration of the claim.

               PAYMENT
               Provided there is no existing breach of this Agreement by the 
               Company,  the Reinsurer shall be  liable  to  the Company for 
               the benefits reinsured and the reinsurance shall not exceed  
               the  Company's contractual liability under the terms of its 
               policies. The Reinsurer's  share of interest, which is based 
               on the critical illness proceeds paid by the  Company,  shall  
               be payable in addition to the critical illness claim settlement.


               CONTESTED CLAIMS
               The  Company  will  notify  the  Reinsurer  of  its  intention  
               to contest,  compromise  or  litigate a claim involving a 
               reinsured policy. The Company will also provide the Reinsurer  
               prompt  notice  of any legal proceedings initiated against the 
               Company in response to its denial of a claim on a reinsured  
               policy.  Should  any  claim  be  settled on a reduced compromise
               basis,  or  should a contested claim be settled  for  a  
               reduced sum, the Company and the Reinsurer shall participate  
               in such reductions in proportion to their respective  
               liabilities  under  the  policy or policies reinsured.

               EXPENSES
               The  Reinsurer  shall  pay  its share of reasonable 
               investigation and legal expenses incurred in adjudicating  
               or litigating the claim.  The Reinsurer shall not be liable  
               for  any portion of any  routine  investigative  or 
               administrative expenses incidental  to  the  settlement  of 
               claims (such as compensation of salaried employees) which are 
               incurred by  the Company; nor for  any expenses incurred in 
               connection with a dispute or contest  arising out of  
               conflicting  claims  of  entitlement to policy proceeds or 
               benefits that the Company admits are payable.

               In the event that the Reinsurer does not deem it advisable to 
               contest a claim, and pays the Reinsurer's share of the 
               critical illness benefit, the Reinsurer shall not be liable 
               for any subsequent expenses incurred by the Company.

               EXTRA CONTRACTUAL OBLIGATIONS
               Extra contractual obligations include punitive damages, bad 
               faith damages, compensatory damages, other damages or 
               statutory penalties which may arise from the willful and/or 
               negligent acts or omissions by the Company.

              The Reinsurer is not liable for extra contractual obligations 
              unless it concurred in writing and in advance of the Company's  
              actions which ultimately led to the imposition of the extra 
              contractual obligations.

              In such circumstances, the Company and the Reinsurer shall 
              share in extra contractual obligations, in equitable 
              proportions, but all factors being equal, the division of any 
              such assessments would be in proportion to the total risk 
              accepted by each party for the plan of insurance involved.

              Notwithstanding anything stated herein, this Agreement will not 
              apply to any extra contractual obligations incurred by the 
              Company as a result of any fraudulent and/or criminal act by 
              any employee of the Company acting individually, collectively  
              or in collusion in the presentation, defense, or settlement of 
              any claim.

              MISSTATEMENT OF AGE OR SEX
              In the event of an increase or reduction in the amount payable
              under a policy due to misstatement in age or sex, the 
              proportionate liabilities under this Agreement shall be the  
              basis for determining each party's share of any increase or 
              reduction in settlement of the claim.   The Reinsurance shall 
              be rewritten from commencement on the basis of the adjusted  
              amounts using premiums and amounts at risk for the correct ages 
              and sex, and the proper adjustment for the difference in 
              reinsurance premiums, without interest, shall be made.


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                                   ARTICLE X

Oversights    Any  unintentional or accidental failure to comply with the 
              terms of this Agreement which can be shown to be the result of  
              an oversight, misunderstanding or clerical error on the part of 
              either party shall not be deemed to be an abrogation of the 
              Agreement or an invalidation of the reinsurance.  Upon 
              discovery, the error shall be promptly corrected by both
              parties being  restored  to  the  position they would have 
              occupied had the oversight, misunderstanding or clerical  
              error not occurred.  Should it not be  possible  to  restore  
              both  parties  to such  a  position, the party responsible 
              for the oversight, misunderstanding  or clerical error shall 
              be responsible for any resulting liabilities and expenses.

              This  provision  shall  apply  only  to  oversights,  
              misunderstandings or clerical  errors relating to the 
              administration of reinsurance  covered  by this Agreement  
              and not to the administration of the insurance provided by
              the Company to its insured.   Any negligent or deliberate acts 
              or omissions by the Company regarding the insurance  provided  
              are the responsibility of the  Company  and  its  liability  
              insurer, if any, but not that of the Reinsurer. For example, 
              if the Company decides to perform an alpha index search only 
              on its applications for amounts over a certain  limit, then 
              the Reinsurer shall not be liable for any amounts not reported 
              for reinsurance as a result of this practice.


Arbitration   Any  controversy  or  claim arising out of or relating to this 
              contract, or the breach thereof, shall  be  settled by 
              arbitration, and the arbitrators, who shall regard this 
              Agreement  from  the standpoint of practical business as well 
              as the law, are empowered to determine  as to the 
              interpretation of the treaty obligation.


              Each  party  shall  appoint  one arbitrator and these two 
              arbitrators shall select a third arbitrator within  two  weeks  
              of the appointment of the second.  The second arbitrator is to 
              be selected within two weeks after the notice is provided that 
              the first arbitrator is selected.  Should the two arbitrators 
              not  agree  on  the  choice of the third, then each party shall
              name four (4) candidates to serve as the arbitrator.

              Beginning with the party who did not initiate arbitration, each 
              party shall eliminate one candidate from the eight  listed 
              until one candidate remains. If this candidate declines to 
              serve as the  arbitrator,  the candidate last eliminated will  
              be approached to serve.  This process shall be repeated until a 
              candidate has agreed to serve as the third arbitrator.  All 
              three arbitrators must be officers of Life Insurance Companies  
              or Life Reinsurance Companies, excluding however, officers of 
              the two parties to this Agreement, their affiliates or 
              subsidiaries or past employees of any of these entities.  The  
              place of meeting of the arbitrators shall be decided by a 
              majority vote of the arbitrators.  The  written  decision of a
              majority of the arbitrators shall be final and binding on both  
              parties and their respective successors and assigns.  All costs 
              of the arbitration and expenses and fees of the arbitrators 
              shall be borne equally by the parties, unless otherwise ordered 
              by the arbitrators.

              The  arbitrators  shall  render  a  decision  within  four  
              months of the appointment of the third arbitrator, unless both 
              parties agree otherwise.
              In the event no decision  is  rendered  within four months, new 
              arbitrators shall be selected as above.

              Alternatively,  if  both parties consent, any controversy may 
              be settled by arbitration in accordance with the rules of the  
              American Arbitration Association.

              Judgement  upon  the  award rendered by the arbitrator(s) may 
              be entered in any court having jurisdiction thereof.

              It is specifically the intent of both parties that these 
              arbitration provisions shall replace and be in lieu of any 
              statutory arbitration provision, if the law so permits.


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                                                           1


                             ARTICLE XI

Insolvency   For the purpose of this Agreement, the Company or the Reinsurer 
             shall be deemed "insolvent" when it:

             (a) applies  for or  consents  to  the  appointment  of  a  
             rehabilitator, conservator, liquidator or statutory successor 
             of its properties or assets; or

             (b) makes an assignment for the benefit of its creditors; or

             (c) is adjudicated as bankrupt or insolvent; or

             (d) files or consents  to  the filing of a petition in 
             bankruptcy, seeks reorganization or an arrangement with 
             creditors or takes advantage of any bankruptcy, dissolution,  
             liquidation, or similar law or statute; or

             (e) becomes  the  subject  of  an  order  to  rehabilitate  or 
             an order to liquidate as defined by the insurance code of the 
             jurisdiction of the domicile of the Company or the Reinsurer, as 
             the case may be.

             In the event of the insolvency of either the Reinsurer or the 
             Company, any amounts owed by the Company to the Reinsurer and 
             by the Reinsurer to the Company with respect to this Agreement  
             shall be set-off and only the balance shall be paid.

             The Reinsurer shall be liable only for the amounts reinsured and 
             shall not be or become liable for any amounts or reserves to be 
             held by the Company on policies reinsured under this Agreement.

             In the event of the insolvency of the Company, the reinsurance 
             obligations under this Agreement shall be payable by the  
             Reinsurer directly to the Company, its liquidator, 
             rehabilitator, conservator or statutory successor, immediately 
             upon demand,  with reasonable provision for verification on the
             basis of the claims allowed  against  the insolvent company by 
             any court of competent jurisdiction or by any rehabilitator,  
             conservator, liquidator or statutory  successor  having  
             authority  to  allow  such   claims   without diminution  
             because  of  the  insolvency  of  the  Company,  or because the
             rehabilitator, conservator, liquidator or statutory successor 
             has failed to pay all or a portion of any claims.

             It is  understood,  however,  that  in  the  event  of  such  
             insolvency,  the rehabilitator,  conservator,  liquidator  or  
             statutory successor of the Company shall give written notice of 
             the pendency of a claim against the Company on the policy 
             reinsured  within  a reasonable time after such claim is filed 
             in the insolvency proceedings, and  that  during  the  pendency 
             of such claim the Reinsurer may investigate such claim and 
             interpose, at its own  expense, in the proceedings where such 
             claim is to be adjudicated, any defense or defenses which it  
             may deem available to the Company or its liquidator, 
             rehabilitator, conservator or statutory successor.


             It is further understood that the expense thus incurred by the 
             Reinsurer shall be  chargeable, subject to court approval, 
             against the Company as part of the expense of conservation or 
             liquidation to the extent of a proportionate share of the 
             benefit which  may accrue to the Company solely as a result of
             the defense undertaken by the  Reinsurer.  Where two or more 
             reinsurers are involved in the same claim and a majority in  
             interest elect to interpose defense to such claim, the expense 
             shall be apportioned in accordance with the terms of the 
             Agreement as though such expense had been incurred by the
             Company.

             In the event of the insolvency of the Reinsurer, the Company may 
             cancel this Agreement for new business by promptly providing  
             the  Reinsurer, its rehabilitator, conservator, liquidator or 
             statutory successor  with written notice  of  the  cancellation  
             effective the date on which the Reinsurer's insolvency is 
             established by the authority responsible for such determination.   
             Any requirement for a notification period prior to the 
             cancellation of the Agreement would not apply under such 
             circumstances.

             In addition, the Company may provide the Reinsurer,  its 
             rehabilitator, conservator, liquidator or statutory successor 
             with written notice of its intent to recapture all reinsurance   
             in force under this Agreement regardless of the duration the 
             reinsurance has been in force or the amount retained by the 
             Company on the policies reinsured hereunder.  The effective
             date of a recapture due to insolvency would be the date on 
             which the Reinsurer's insolvency is established by the authority 
             responsible for such determination.   Such a recapture would be 
             subject to the monetary terms specified in Exhibit C.


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                                                           1



                            ARTICLE  XII

DAC Tax    The Company and the Reinsurer agree to the DAC Tax Election 
           pursuant to Section 1.848-2(g)(8) of the Income Tax Regulation 
           under Section 848 of the Internal Revenue code of 1986, as amended, 
           whereby:

           (a) the party with the net  positive  consideration for this 
           Agreement for each taxable year will capitalize specified policy  
           acquisition expenses with respect to this Agreement without regard 
           to the general deductions limitation of Section 848(c)(1); and 

            (b) both parties agree to exchange information pertaining to the 
            amount of net consideration under this Agreement each year to 
            ensure consistency.

            The term "net consideration" will refer to either net 
            consideration as defined in Regulation Section 1.848-2(f)
            (or gross amount of premiums and other consideration as defined 
            in Regulation Section 1.848-3(b), as appropriate).

            The method and timing of the exchange of this information is set 
            out in Exhibit G.

            This DAC Tax Election shall be effective for all years for which 
            this Agreement remains in effect.

            The Company and the Reinsurer represent and warrant that they are 
            subject to U.S. taxation under either the provisions of 
            subchapter L of Chapter 1 or the provisions of subpart F of  
            subchapter N of Chapter 1 of the Internal Revenue Code of 1986, 
            as amended.


Taxes and  Apart from any taxes, allowances, refunds, and expenses 
Expenses   specifically referred to elsewhere in this Agreement,  
           no  allowances, taxes or proportion of any expense shall be paid 
           by the Reinsurer to the Company in respect of any submission.


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                                                           1



                                 ARTICLE  XIII

Alterations     Any  alteration to this Agreement shall be null and void unless
to Agreement    attached to the Agreement and signed by both parties.

Parties to      This is  an  Agreement  solely  between the Company and the 
Agreement       Reinsurer.  The acceptance of reinsurance hereunder  shall  
                not create any right or legal relation between the Reinsurer 
                and the insured, beneficiary, or any other party to any 
                policy of the Company which may be reinsured hereunder.

                This Agreement represents the entire agreement between the 
                Company and the Reinsurer and supersedes, with respect to its 
                subject matter, any prior oral or written agreements between 
                the parties.

Good Faith      The Company and Reinsurer agree that  all  matters  with  
                respect  to  this Agreement require the utmost good faith of
                both parties.

                The  Reinsurer, or its duly appointed representatives, shall 
                have access to the records  of the Company concerning the 
                business reinsured hereunder for the purpose of  inspecting,  
                auditing and photocopying those records.  Such access shall 
                be provided at the  office  of the Company and shall be during
                reasonable business hours.

                Provided  there  is business in force under this Agreement, 
                the Reinsurer's right of access as specified above will 
                survive the term of the Agreement.

                Each party represents and warrants to the other party that it 
                is solvent on a statutory basis  in  all states in which it 
                does business or is licensed. Each party agrees to promptly  
                notify the other if it is  subsequently financially impaired.

                The  Reinsurer  has  entered  into  this  Agreement  in  
                reliance  upon the Company's representations and warranties. 
                The Company affirms that  it has and  will  continue  to 
                disclose all matters material to this Agreement and each 
                submission.  Examples  of such matters are a change in 
                underwriting or issue  practices  or  philosophy,  a change  
                in  underwriting  management personnel, or a change in the 
                Company's ownership or control.




Confidentiality   Both the Company and the Reinsurer will  hold confidential 
                  and not disclose or make competitive use of any shared 
                  proprietary information unless otherwise agreed in writing, 
                  or unless the information otherwise becomes publicly 
                  available or the disclosure of which is required for  
                  retrocession purposes or has been mandated by law.

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                                                           1



                                 ARTICLE  XIV

Duration of   This Agreement is effective as of the effective date set out 
Agreement     in Exhibit A-I and is unlimited as to its duration.  It may be 
              terminated for further new reinsurance on all or certain 
              policies specified in Exhibit  A-I by either party giving at 
              least ninety (90) days notice to that effect in writing to the 
              other party.  During the period of such ninety (90) days the
              Reinsurer shall continue to accept new reinsurance under the 
              terms of this Agreement.   This notification period would be  
              waived in the event the Reinsurer is deemed insolvent.  
              Further, the Reinsurer remains liable for all reinsured 
              policies existing at the date of the expiration set forth in
              the notice until their natural expiration, unless the parties 
              mutually decide otherwise or as specified otherwise in this 
              Agreement.

              Notwithstanding  the  above, the Company  agrees,  in  
              recognition of the Reinsurer's contribution to the product  
              development of critical illness business, to reinsure its 
              critical illness products exclusively with the Reinsurer for  
              a period of three (3) years commencing with the effective
              date of this Agreement.

              If,  during  this  initial  three  year period, circumstances 
              in the market place develop which necessitate a revision to the 
              critical illness products reinsured under this Agreement, the 
              Company is bound to work with Reinsurer in developing revised 
              critical illness  products and reinsure them with the 
              Reinsurer.  Should the Reinsurer be unable  to  support  the  
              revision, the above exclusivity provision would not apply.  
              The Company would then not be obligated to develop or reinsure 
              the revised critical illness products with the Reinsurer.


Severability  If  any  provision  of  this  Agreement  is  determined  to  be  
              invalid or unenforceable, such determination will not affect or 
              impair the validity or the enforceability of the remaining 
              provisions of this Agreement.

Benefit       Except  as  otherwise  provided,  this  Agreement shall be 
              binding upon the parties hereto and their respective successors 
              and assigns.

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                                                           1



Construction   This Agreement shall be construed and administered in 
               accordance with the laws of the State of Indiana and the 
               rights and obligations of this Agreement shall, at all times, 
               be regulated  under the laws of the State of Indiana.


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                                                           1



Made in duplicate and executed by both parties.


Signed for and on behalf of  STANDARD LIFE INSURANCE COMPANY OF INDIANA






Indianapolis, this     day of       , 19





Signed for and on behalf of THE MERCANTILE AND GENERAL LIFE REASSURANCE COMPANY
OF AMERICA (A MEMBER OF THE SWISS RE GROUP)






Toronto, this          day of       , 19






Prepared by _________________________

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                                                                   EXHIBIT  A-I


                               BUSINESS  COVERED

EFFECTIVE  DATE:
June 1, 1997.  The commencement dates for specific business are shown below.

BUSINESS  COVERED:
The policies on the plans shown below with  policy  issue  dates falling in the
period  that  begins with the Commencement Date and ends with  the  Termination
Date are covered  subject  to  any limitations shown below or elsewhere in this
Agreement.

Riders and supplementary benefits  shall also be covered in accordance with the
Limitations, Commencement Date and Termination Date of the base policy to which
they are attached unless stated otherwise.

These policies, riders and supplementary  benefits are on lives resident in the
United States or territories of the United States.

CURRENCY:  US$

LIMITATIONS:
1.      A seventy percent (70%) first dollar  quota share of each policy, up to
      the limits specified in Exhibit E, is eligible  for automatic coverage on
      all policies on lives with surnames commencing with  the  letters  A to Z
      inclusive.  (Any application may be offered on a facultative basis.)

PLANS,  RIDERS  AND  BENEFITS:

PLAN(S) AND                EXHIBIT              COMMENCEMENT    TERMINATION
Form  No(s).               Reference      Limitations`   Date            Date

Critical Choice, S/NS     C, C- I          1.      June 1, 1997
Policy Form: CIS197A

RIDERS

N/A

SUPPLEMENTARY BENEFITS

N/A

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                                                         EXHIBIT A-II


                COMPANY'S  UNDERWRITING  FORMS   AND

                          EVIDENCE  AND  ISSUE  RULES

The following information and items are to be provided to the Reinsurer:

1.      Policy Application Form

2.      Policy Delivery Rules and Reinstatement Rules

3.      Non-medical and Medical Requirements

4.      Financial and Non-smoking Questionnaires

5.      Preferred Underwriting Guidelines, if applicable

It is understood that the Company will be using the Reinsurer's critical
illness underwriting manual.

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                                                                     EXHIBIT  C

                                GENERAL  TERMS

1.      REINSURANCE BASIS:  Coinsurance

2.      RATE CRITERIA: The rates set out in the  sub-section(s)  of  Exhibit  C
      shall  be  used  for automatic reinsurance of any policy covered by  this
      Agreement.  These  rates  also  apply to the reinsurance of a facultative
      policy covered by this Agreement provided the Company retains:

              (i) at least 25% of the policy to be reinsured, or

              (ii) the Company's maximum retention then available for the issue
            age and rating applicable to the policy to be reinsured.

3.      ALLOWANCE  LIMIT: The allowances  set  out  in  the  sub-section(s)  of
      Exhibit C will  apply  to all reinsurances, provided the total of the new
      reinsurance amount and the  amount  already  reinsured  on the life under
      this  Agreement,  and all other Agreements with the Reinsurer,  does  not
      exceed the amount shown  in  the  table  below.  Individual consideration
      will be given to the allowances for any amounts  over  the limit shown in
      the table below.

Issue Age                             STD. (100%) - 250%
[S]                                         [C]
20                                    $500,000
                   - 64

4.      AGE BASIS:  Last

5.      PREMIUM TAX: There shall be no separate reimbursement of Premium Tax.

6.      RATE GUARANTEE: The reinsurance rates set out in the sub-section(s)  of
      Exhibit  C of this Agreement cannot be guaranteed for more than one year.
      The Reinsurer reserves the right to increase the reinsurance rates if the
      Company has increased its rates.

7.      MINIMUM  REINSURANCE  LIMIT:  $10,000 Individual
                                                    7,000 Worksite

8.                        RECAPTURE: Due to Increase in the Company's Retention.
                                Inforce Period: 10 Years.
                                Due to Insolvency of the Reinsurer.
                                Inforce Period:  Not Applicable.
                                                            EXHIBIT C
                                                                         Page 2


                                                        The Recapture Fee
                        applicable shall be mutually agreed upon by the Company
                        and the Reinsurer, its rehabilitator, conservator,
                        liquidator, or statutory successor.

9.      RETURN OF  PREMIUMS:   If  death occurs after the 10th policy year, all
      premiums paid will be refunded without interest.


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                                                                   EXHIBIT  C-I

                       INSTRUCTIONS  FOR  ADMINISTRATION

1.     BASIS OF REINSURANCE:  The Company  shall  pay  to the Reinsurer a basic
      premium  at  the same rate of premium as is applicable  on  the  original
      policy but not including any policy fee payable on the original policy.

       The premium rates  set  out  in  Exhibit  C-I shall be payable on a cash
      basis, with the Company matching the  mode  of  payment  of  the premiums
      under  the  original  insurance.  The  Company shall continue to pay  the
      appropriate premium to the Reinsurer as long as the policy is in force.

       On  all policies the due proportion of any  extra  premiums  payable  on
      account of additional morbidity risk shall be payable to the Reinsurer.

         Premiums remain level to age 100.

        Modal factors are as follows:

monthly       .09

quarterly      .2625

semi-annual  .515

        Premium bands are as follows:


                              Individual                   Worksite
[S]                           [C]                          [C]
                              $15,000 - $49,999            $10,000 - $49,999
                              $50,000 - $99,999            $50,000 - $99,999
                              $100,000 - $500,000          $100,000 - $500,000



2.     ALLOWANCES:

             (a) ON BASIC PLAN(S)
                  The   Reinsurer  shall  pay  to  the  Company  the  following
            allowances on the premiums payable hereunder:

YEAR 1                   YEARS 2 THROUGH 9                  THEREAFTER

100%                     10%                                 2%


              (b) ON  MULTIPLE  EXTRA  PREMIUMS
                    The same allowances as those payable on the basic policy.
                                                          EXHIBIT C-I
                                                                         Page 2


                      DEFINITIONS OF COVERED IMPAIRMENTS
                             and POLICY CONDITIONS

Covered Impairments:
1.      ALZHEIMER'S DISEASE  - The diagnosis by a Physician who is a consultant
      neurologist resulting in  the inability to perform independently three or
      more of the following activities  of  daily  living:  bathing,  dressing,
      toileting,  transferring (moving in or out of a bed or chair), continence
      and feeding.   Systemic  disorders  and  other brain diseases which could
      account  for  the loss of independent performance  must  be  specifically
      ruled  out.   "Diagnosis"  means  clinical  diagnosis  not  dependent  on
      pathological confirmation, but employing nationally accepted criteria.

2.      BLINDNESS - Permanent  and uncorrectable loss of sight in both eyes, as
      confirmed by Physician who  is  an ophthalmologist.  The corrected visual
      acuity must be worse than 20/200 in both eyes or the field of vision must
      be less than 20 degrees in both eyes.

3.      CANCER (LIFE THREATENING) - An invasive malignancy characterized by the
      uncontrolled growth and spread of  malignant  cells  and  the invasion of
      tissue.  Cancers NOT covered by this definition include:

                <section> Stage A prostate cancer;
                <section> Pre-malignant lesions, benign tumors or polyps;
                <section> Carcinoma in situ;
                <section>  Any skin cancer, except invasive malignant  melanoma
              into the dermis or deeper.

4.      CORONARY ARTERY BYPASS  SURGERY  -  The  undergoing of heart surgery to
      correct  narrowing  or  blockage of one or more  coronary  arteries  with
      bypass grafts.  Surgery must  have been recommended by a Physician who is
      a  cardiologist.

5.      CORONARY ANGIOPLASTY - The undergoing  of  balloon angioplasty or laser
      embolectomy  to correct narrowing or blockage of  one  or  more  coronary
      arteries.  Surgery  must  have  been  recommended by a Physician who is a
      cardiologist.

6.      DEAFNESS - Permanent loss of hearing  in  both  ears,  with an auditory
      threshold of more than 90 decibels, as confirmed by Physician  who  is an
      otolaryngologist.


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                                                                    EXHIBIT C-I
                                                                         Page 3


7.      Heart  Attack  -  (Myocardial Infarction) The death of a portion of the
      heart muscle resulting  from a blockage of one or more coronary arteries.
      The  diagnosis  is based on  an  event  which  consists  of  all  of  the
      following:

                <section> Chest pain;
                <section> Associated new electrocardiographic (EKG) changes
              consisting of new Q waves and localized T wave Inversions; and
                <section> Elevation of cardiac (heart) enzymes.

8.      PARALYSIS - Complete and permanent loss of the use of two or more limbs
      through paralysis,  for  a  continuous period of 180 days, confirmed by a
      Physician.

9.      STROKE - Cerebrovascular accident caused by infarction of brain tissue,
      hemorrhage  or  embolism,  producing   measurable   neurological  deficit
      persisting for at least 30 days following the occurrence  of  the stroke.
      Conditions  NOT  covered by this definition include, but are not  limited
      to, transient ischemic attack (TIA).



Policy Conditions:
1.      WAITING PERIOD -   Coverage  commences  30  days after the Policy Issue
      Date  (or  the Policy Reinstatement Date, if applicable).    The  Waiting
      Period would  be waived if a covered impairment was caused by an accident
      which occurred while the policy was in force.

2.      SURVIVAL PERIOD  -  Benefits are payable provided the insured is living
      30 days after the date  the  clinical  or  pathological  diagnosis  of  a
      covered impairment is made by a physician.

3.      CURRENT  BENEFIT AMOUNT - The initial Benefit Amount less any amount of
      partial benefits paid to date.


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                                                                    EXHIBIT C-I
                                                                         Page 4


                         SCHEDULE OF BENEFITS PAYABLE


IMPAIRMENT COVERED        SHARE OF BENEFIT AMOUNT *

 1.   Alzheimer's                 25%
      Disease


 2.   Blindness                   25%


 3.   Cancer**                    100%
      (Life Threatening)


 4.   Coronary Artery             25%
      Bypass Surgery


 5.   Coronary                    10%
      Angioplasty


 6.   Deafness                    25%


 7.   Heart Attack                100%


 8.   Paralysis                   100%


 9.   Stroke                      100%

10. Death                         Return of Premiums***



                                                          EXHIBIT C-I
                                                                         Page 5


*       The Benefit  Amount after age 65 is equal to 50% of the Current Benefit
      Amount.  For policies  with  issue  ages 61 - 64, the benefit amount will
      remain level for the first five (5) years, then will reduce by 50%.

**      If the first diagnosis of breast cancer,  testicular cancer or invasive
      malignant melanoma occurs after the waiting period  and before the policy
      has been in force for 151 days, the benefit will be limited to 10% of the
      benefit  amount.   Subsequent  cancer  claims will be paid  only  if  the
      subsequent cancer is determined to be new  and  unrelated to the previous
      cancer.

***     A  death  benefit,  equal  to  the  sum of all premiums  paid,  without
      interest, is payable provided that death occurs after the policy has been
      in force for ten (10) years.  (A limited death benefit of $500 payable if
      death occurs during the first 10 policy  years  may be applicable in some
      states.)




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                                                                     EXHIBIT  D


                  THE  COMPANY'S  RETENTION  AND ISSUE LIMITS

                            FOR  CRITICAL  ILLNESS


RETENTION LIMIT:

Thirty percent (30%) of each policy issued up to a maximum  of  $50,000  on any
one life.


ISSUE LIMIT:

$500,000  per life

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                                                                     EXHIBIT  E


                     THE  REINSURER'S  ACCEPTANCE  LIMITS

                            FOR  CRITICAL  ILLNESS


AUTOMATIC  LIMIT:

To  be  mutually  agreed  upon at a later date.  Initially all policies will be
issued on a facultative basis.


JUMBO  LIMIT:

$500,000 inforce and applied for on any one life.


PARTICIPATION  LIMIT:

$500,000 per life (maximum total inforce with all companies).

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                                                                     EXHIBIT  F


                             REINSURANCE  REPORTS

DATA  NOTIFICATION:  The Company  shall  send  to  the  Reinsurer  reports,  in
substantial  compliance  with the Society of Actuaries Guidelines, at the times
indicated below:

     REPORT                      FREQUENCY    DUE  DATE     EXAMPLE  REFERENCE

1.   Policy Detail Report        Monthly        21st        Exhibit  F, p. 2
     (Reinsurance Ceded)

2.   Accounting & Policy         Monthly        21st        Exhibit  F, p. 3
     Exhibit (Movement Summary)

3.   Valuation Reserve           Annually     Jan.  10th    Exhibit  F, p. 4
     Certification

4.   Quarterly Valuation         Quarterly    10 days       Exhibit  F, p. 4
     Reserve                                  after quarter

5.   Tax Reserve Certification   Annually     June 1st      Exhibit  F, p. 5


NOTIFICATION OF ACCEPTANCE  OF  FACULTATIVE OFFER:  The Company will advise the
Reinsurer of its acceptance of the Reinsurer's underwriting decision pertaining
to  facultative business by sending  written  notice  to  the  Reinsurer.   The
Company  shall  provide the full details of the facultative new business on the
next Policy Detail Report.

ERRORS AND OMISSIONS:   Should  any  items  be  inadvertently  omitted  from or
entered  in  error on a reinsurance report, such omissions or errors shall  not
affect the liability  of  the  Reinsurer  in  regard  to any submission and the
mistakes shall be rectified upon discovery.  This does  not  waive  any  rights
outlined in Article X.

RESERVES:

FIRST   THREE  QUARTERS'  RESERVES:  Actual reserve figures are required within
10 days after the close of each of the first 3 quarters.  Any estimated figures
provided should be confirmed by actual reserve figures.

YEAR END  RESERVES:  The Company shall advise the Reinsurer by January  10th of
each year of  the  amount  of  reserves  calculated on the reinsurance in force
under this Agreement as of December  31st  of  the preceding year and will also
indicate the valuation method used.  These reserves  shall  be certified by the
Company's valuation actuary.

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                                                                      EXHIBIT F
                                                                         Page 4

                             VALUATION RESERVE FOR
                      SELF-ADMINISTERED BUSINESS CEDED TO
              THE MERCANTILE AND GENERAL LIFE REASSURANCE COMPANY
                                  OF AMERICA
                            FROM (NAME OF COMPANY)

Inforce  and  Reserves  at                        19xx:

                                                  Plan:  Type:
SM/NSM/AGGR/TOTAL

Inforce  Reinsured  Amount:     _____________

Inforce  Number  of  Policies:  _____________

Valuation  Reserve  as  at                        19xx:


                                RESERVE                      RESERVE  BASIS
TYPE                            AMOUNT  ($)                 (TABLE, INTEREST
                                                            RATE AND METHOD)

Health

Substandard Life

Other (specify)

Total



As  the  valuation  actuary  of  the  above  named company I certify  that  the
information above is correct as shown.  *

Name:

Signature:

Actuarial Designation:

Title:

Date:

* Required only for Year End Valuation Reserves.


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                                                                      EXHIBIT F
                                                                         Page 5

                         TAX RESERVE CERTIFICATION FOR
                      SELF-ADMINISTERED BUSINESS CEDED TO
           THE  MERCANTILE  AND  GENERAL  LIFE REASSURANCE  COMPANY
                                  OF AMERICA
                            FROM (NAME OF COMPANY)

Inforce  and  Reserves  at  December 31,          19xx:

                                                  Plan:  Type:
SM/NSM/AGGR/TOTAL

Inforce  Reinsured  Amount:     _____________

Inforce  Number  of  Policies:  _____________

Tax Reserve as at December 31, 19xx:


                                RESERVE                      RESERVE  BASIS
TYPE                            AMOUNT  ($)                  (TABLE, INTEREST
                                                             RATE AND METHOD)

Health

Substandard Life

Other (specify)

Total



As  the  valuation  actuary  of  the above named company  I  certify  that  the
information above is in compliance with the tax code.

Name:

Signature:

Actuarial Designation:

Title:

Date:


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                                                                      EXHIBIT G


                              DAC  TAX  ELECTION

                       Method of Exchanging Information

The Reinsurer and the Company agree  to  the  DAC  Tax Election and accordingly
will exchange information in the following manner:

1.      The Reinsurer will submit a Schedule to the  Company  by May 1, of each
      year,  of  its  calculation of the net consideration (as referred  to  in
      Article XII) for the preceding calendar year.

2.      The  Company,  in  turn,  will  complete  the  Schedule  by  indicating
      acceptance of the Reinsurer's calculations of the net consideration or by
      noting any discrepancies.  The Company will return the completed Schedule
      to the Reinsurer by June 1, of each year.

3.      If  there  are  any   discrepancies   between  the  Company's  and  the
      Reinsurer's calculation of the net consideration, the parties will act in
      good faith to resolve the discrepancies by July  1, of each year.

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