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                                                                   EXHIBIT 10.46






                              AMERICAN EAGLE GROUP
                        AMERICAN EAGLE INSURANCE COMPANY
                 SPECIAL UNDERLYING GENERAL AVIATION LIABILITY
                      EXCESS OF LOSS REINSURANCE AGREEMENT


                       1996 RENEWAL FINAL PLACEMENT SLIP



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COMPANY:                      AMERICAN EAGLE INSURANCE COMPANY
                              a Texas corporation
                              and any company now or hereafter affiliated
                              with American Eagle Group, Inc.

                                                          and/or

                              VIRGINIA SURETY COMPANY, INC.
                              an Illinois Corporation
                              (as respects business underwritten by American Eagle Group, Inc.,
                              and any subsidiaries of American Eagle Group, Inc.)

                                                          and/or

                              THE REINSURANCE CORPORATION OF NEW YORK
                              a New York corporation
                              (as respects business underwritten by American Eagle Group, Inc.,
                              and any subsidiaries of American Eagle Group, Inc.)

                                                          and/or

                              ZURICH REINSURANCE CENTRE, INC.
                              a New York corporation
                              (as respects business underwritten by American Eagle Group, Inc.,
                              and any subsidiaries of American Eagle Group, Inc.)

                                                          and/or

                              TIG INSURANCE COMPANY
                              a California corporation
                              (as respects business underwritten by American Eagle Group, Inc.,
                              and any subsidiaries of American Eagle Group, Inc.)
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AMERICAN EAGLE INSURANCE COMPANY              SPECIAL U/L AVIATION LIABILITY XOL





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INCEPTION:                    12:01 a.m. standard time (as defined in the Company's policies),
                              July 1, 1994, as respects written and renewal business.


EFFECTIVE:                    Continuous and to take effect 12:01 a.m. standard time,
                              July 1, 1996, as respects written and renewal business.


CANCELLATION:                 Any July 1 by either party via 90 days prior notice by certified or registered mail.

                              If at any time the Company or any Reinsurer loses the whole or part of its paid up
                              capital, becomes insolvent, is placed in conservation, rehabilitation, or liquidation, or
                              has a receiver appointed, or is acquired or controlled by, merged with, or reinsures its
                              entire business with any other company or corporation, the other party will have the right
                              to cancel this reinsurance by giving 90 days notice by certified or registered mail.

                              In the event of cancellation, the Company will have the option of terminating Reinsurers'
                              liability in force at cancellation date ("cut-off"), or of continuing Reinsurers'
                              liability ("run-off").

                              In the event the Company elects run-off, Reinsurers' liability will continue until the
                              first anniversary date following cancellation, but in no event will Reinsurers' liability
                              continue for more than 12 months plus odd time, not to exceed 18 months in all.  Premium
                              to Reinsurers for the run-off period calculated at the rates applicable at cancellation
                              date, applied to the GNEP developed during the run-off period on risks protected
                              hereunder.

                              Regardless of the cancellation option elected by the Company, coverage to continue:

                             1.      As respects any policy the Company is unable to cancel due to regulatory action,
                                     until the Company is able to cancel or non-renew such policy.
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AMERICAN EAGLE INSURANCE COMPANY              SPECIAL U/L AVIATION LIABILITY XOL





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                             2.      As respects aggregate coverage provided by this Agreement, until the next normal
                                     anniversary or renewal date of the policies following cancellation date of this
                                     Agreement.


BUSINESS                      All business classified by the Company as General Aviation Liability.
COVERED:


EXCLUSIONS:                   As attached.


TERRITORY:                    To follow the Company's policies.


LIMIT AND                     $300,000 each and every risk, each and every occurrence, excess of
RETENTION:                    
                              $200,000 each and every risk, each and every occurrence, in turn excess of

                              an annual aggregate deductible of $3,000,000, or an amount equal to 5.45% of GNEP,
                              whichever the greater.

                              The definition of "occurrence" will follow the Company's policy.

                              Reinsurers' limit and Company's retention to apply on an aggregate loss basis where the
                              Company's policies provide such aggregate limits for the hazards of Products and Completed
                              Operations only.

                              Company will be the sole judge of what constitutes one risk.  Any such determination shall
                              be made by the Company with utmost good faith, giving due consideration to the interest of
                              the Company and the Reinsurer.


LOSS                          Prorated in proportion to each party's share of loss and in addition to
EXPENSE:                      limit hereof except where the Company's policy includes all loss
                              expenses within the policy limits.
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AMERICAN EAGLE INSURANCE COMPANY             SPECIAL U/L AVIATION LIABILITY XOL




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WARRANTY:                     No more than [BLACKOUT] helicopters in total, to be subject to this Agreement, or so
                              deemed.


REIN-                         Unlimited free reinstatements.  However, helicopter losses will be
STATEMENT:                    limited to [BLACKOUT] or [BLACKOUT] of GNEP whichever the greater for
                              each Agreement Year.


PREMIUM,                      Retrospectively rated (three-year blocks):
REPORTS AND
REMITTANCES:                  1.     Annual Deposit Premium:  [BLACKOUT], payable [BLACKOUT] in equal installments
                                     quarterly in arrears.

                              2.     Ceding Commission:  [BLACKOUT] of deposit premium only (no ceding commission to be
                                     taken or returned on retrospective premium adjustment).

                              3.     Retrospective Premium Adjustment:  Ultimate reinsurance premium to be based on the
                                     sum of the incurred losses plus [BLACKOUT] of GNEP, subject, however, to the
                                     following:

                                              Provisional Rate:     [BLACKOUT] of GNEP

                                              Minimum Rate:         [BLACKOUT] of GNEP

                                              Maximum Rate:         [BLACKOUT] of GNEP


                              4.     This is the third year of a three-year retrospective rating block which incepted
                                     July 1, 1994, with cumulative interim adjustments annually beginning July 1, 1995,
                                     for the first Agreement Year, and annually thereafter until all losses for the
                                     three-year block are closed.  However, there shall be no return premium due (i.e.,
                                     no adjustment of premium below the provisional rate) prior to 48 months from the
                                     inception of each three-year block.

                              5.     Retrospective adjustments to be made within 60 days after the end of each Agreement
                                     year, and recalculated annually thereafter until all losses are settled.
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SUBJECT TO A REQUEST FOR
CONFIDENTIAL TREATMENT



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AMERICAN EAGLE INSURANCE COMPANY              SPECIAL U/L AVIATION LIABILITY XOL





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DEFINITION                    "Agreement Year" will be the 12-month period beginning each
OF                            July 1, and will include all premiums earned and losses incurred
AGREEMENT                     arising from written and renewal policies taking effect during the
YEAR:                         Agreement year in question.


OTHER                         Company permitted to purchase facultative and other treaty 
REINSURANCE:                  reinsurance and to deduct the premium thereof if it inures to the
                              benefit of this Agreement.  Company permitted to carry contingency
                              reinsurance, recoveries under which will inure to its sole benefit.


FUNDING:                      Letters of Credit and/or Trust Agreements required from unauthorized Reinsurers for
                              outstanding losses and expenses, recoverables, and IBNR.


AGENCY:                       For all purposes of this Agreement, the reinsured company that is set forth first in the
                              "COMPANY" section of this Placement Slip will be deemed the agent of all other reinsured
                              companies referenced in said section.  In no event, however, will any reinsured company be
                              deemed the agent of another with respect to the terms of the Insolvency Article.


ORIGINAL                      The liability of the Reinsurers under each and every policy covered
CONDITIONS                    under this Agreement will be subject in all respects to the same
AND LIABILITY                 interpretations, terms, conditions, waivers, modifications,
OF REINSURERS:                alterations, and cancellations as the respective policies of the
                              Company to which this Agreement relates.

                              The Company will be the sole judge as to what will constitute a claim or loss covered
                              under the Company's  policy and as to the Company's liability thereunder, and will at its
                              sole discretion adjust, settle, or compromise all claims and losses.  All such
                              adjustments, settlements, and compromises will be binding on the Reinsurers in proportion
                              to their participation, provided they are within the terms and conditions of this
                              Agreement.  Ex Gratia payments made by the Company will be included in this Agreement
                              subject to the approval of the Lead Reinsurer.
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AMERICAN EAGLE INSURANCE COMPANY             SPECIAL U/L AVIATION LIABILITY XOL





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                              While the Reinsurers do not have the duty to investigate or defend claims or suits, they
                              will nevertheless have the right and the opportunity, with the full cooperation of the
                              Company, to associate with the Company at the Reinsurers' expense in the defense of any
                              claim, suit, or proceeding that is likely to involve this Agreement.


OTHER                         Access to Records Clause
PROVISIONS:                   Amendments Clause
                              Aon Re Inc. Intermediary Clause
                              Arbitration Clause
                              Aviation Grounding Liability Clause (1988 Amendment)
                              Currency Clause (U.S. Dollars)
                              Delays, Errors, or Omissions Clause
                              Entire Agreement Clause
                              Extra Contractual Obligations (90%) and
                                  Excess of Policy Limits (90%) Clause
                              Insolvency Clause (as attached)
                              Loss and Loss Expense Clause (including the Company's own costs and legal expenses
                                     incurred in direct connection with costs of declaratory judgment actions)
                              Net Retained Liability Clause
                              Loss Notices and Settlements Clause
                              Offset Clause
                              Service of Suit Clause
                              Taxes/FET Clauses



ESTIMATED
SUBJECT
GNEP:                         [BLACKOUT]  (Liability only)


                            *              *                *                *                *
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AMERICAN EAGLE INSURANCE COMPANY              SPECIAL U/L AVIATION LIABILITY XOL





In accordance with your instructions, we have placed reinsurance with the
Reinsurer listed hereon, subject to the terms and conditions hereinabove
stated.  We ask that you promptly advise us if the terms, conditions, or
Reinsurer vary in any respect from your instructions.  Aon Re Inc. will not be
responsible for the financial or other obligations of any Reinsurer.  Should
you desire financial information regarding the Reinsurer listed hereon, please
contact us and we will furnish it.

The Reinsurer's obligations under this Agreement are several and not joint and
are limited solely to the extent of their individual participation.  The
Reinsurer is not responsible for the participation of any co-subscribing
Reinsurer that for any reason does not satisfy all or part of its obligations.

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            REINSURED WITH:                                              % PARTICIPATION
                                                                         ---------------
         <S>                              <C>                              <C>
         Zurich Reinsurance Centre, Inc.  {06-1325038}                     [BLACKOUT]

              TOTAL PLACEMENT                                              [BLACKOUT]
                                                                           ==========
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Assuming that you find everything in order, please indicate your acceptance and
approval by signing and returning this Final Placement Slip to Aon Re Inc., 201
California Street, Suite 900, San Francisco, California  94111.



ACCEPTED AND
APPROVED BY:   /s/ PHILIP GUTHRIE            DATED:         8/9/96
              ------------------------------         ----------------------



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AMERICAN EAGLE INSURANCE COMPANY             SPECIAL U/L AVIATION LIABILITY XOL





                                 EXCLUSION LIST



No reinsurance indemnity will be afforded under this Agreement for:

         A.      Aircraft policies covering aircraft with more than 40
                 passenger seats, operated by the policy named insured for the
                 commercial transportation of passengers.

         B.      Satellite Business.

         C.      Assumed treaty reinsurance, except as respects intracompany
                 reinsurance, and not to exclude business assumed from another
                 insurer where said insurer's policy is issued in place of the
                 Company's because of licensing or rating reasons.

         D.      Residual Value Insurance.

         E.      Unearned Premium Insurance, written as such.

         F.      Burning Cost Insurance and Profit Commissions.

         G.      Financial Guarantee.

         H.      Errors and Omissions Insurance, written as such.

         I.      Directors' and Officers' Liability.

         J.      Seepage and Pollution, per Clause AVN46B or its equivalent.
                 Nevertheless, for the purposes of this Agreement, it is agreed
                 that in respect of Aviation fueling, defueling, refueling, and
                 products legal liability policies, paragraph 1(b) of Clause
                 AVN46B or its equivalent is amended to read "Pollution and
                 contamination of any kind whatsoever other than pollution and
                 contamination of a product or products sold or supplied."

         K.      Hot Air Balloon Liability.



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AMERICAN EAGLE INSURANCE COMPANY              SPECIAL U/L AVIATION LIABILITY XOL





Notwithstanding the foregoing, any Exclusion (other than Exclusions A, C, and
J) will not apply when the operations or exposures outlined in those exclusions
are, in the Company's opinion, only incidental to and a comparatively small
part of the original insured's major activities or total operations not to
exceed 15% of the original policy premium.  Furthermore, should the judicial
entity having legal jurisdiction invalidate any exclusion of the Company's
policy, any amount of loss for which the Company would not be liable except for
such invalidation shall not be subject to any of the Exclusions of this
Agreement.

Should the Company, by reason of an inadvertent act, error, or omission, be
bound to afford coverage excluded hereunder, or should an existing insured
extend its operations to include coverage excluded hereunder, the Reinsurers
will waive the exclusion(s) with the exception of A, C, and J.  The duration of
said waiver will not extend beyond the time that notice of such coverage has
been received by the responsible underwriting authority of the Company plus 60
days thereafter.

The Company may submit to the Reinsurers, for special acceptance hereunder,
business not covered by this Agreement.  If said business is accepted by the
Reinsurers, it will be subject to the terms of this agreement, except as such
terms are modified by such acceptance. Any special acceptance business covered
under the reinsurance Agreement being replaced by this Agreement will be
automatically covered hereunder. Further, should Reinsurers become a party to
this Agreement subsequent to the acceptance of any business not normally
covered hereunder, they will automatically accept same as being a part of this
Agreement.



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AMERICAN EAGLE INSURANCE COMPANY              SPECIAL U/L AVIATION LIABILITY XOL



                                   INSOLVENCY

In the event of the insolvency of the Company, this reinsurance will be payable
on demand, with reasonable provision for verification, on the basis of claims
allowed against the insolvent Company by any court of competent jurisdiction or
by any liquidator, receiver, or statutory successor of the Company having
authority to allow such claims, without diminution because of such insolvency
or because such liquidator, receiver, or statutory successor has failed to pay
all or a portion of any claims. Such payments by the Reinsurers will be made
directly to the Company or its liquidator, receiver, or statutory successor,
except as provided by Section 4118(a) of the New York Insurance Law or except
(a) where the Agreement specifically provides another payee of such reinsurance
in the event of the insolvency of the Company, or (b) the Reinsurers with the
consent of the direct insured or insureds have assumed such policy obligations
of the Company as direct obligations of the Reinsurers to the payees under such
policies and in substitution for the obligations of the Company to such payees.

It is agreed, however, that the liquidator, receiver, or statutory successor of
the insolvent Company will give written notice to the Reinsurers of the
pendency of a claim against the Company indicating the policy or bond reinsured
which claim would involve a possible liability on the part of the Reinsurers
within a reasonable time after which claim is filed in the insolvency
proceeding, and that during the pendency of such claim, the Reinsurers may
investigate such claim and interpose, at their own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses that they may
deem available to the Company or its liquidator, receiver, or statutory
successor. The expense, thus incurred by the Reinsurers will be chargeable,
subject to the approval of the court, against the Company as part of the
expense of liquidation to the extent of a pro rata share of the benefit which
may accrue to the Company solely as a result of the defense undertaken by the
Reinsurers. 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 will
be apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the insolvent Company.

This Article will apply severally to each Company named in the Preamble to this
Agreement.  Notwithstanding the foregoing, the American Eagle Insurance Company
(hereinafter called "AEIC") has entered into agreements with The Reinsurance
Corporation of New York (hereinafter called "RECO") and Zurich Reinsurance
Centre (hereinafter called "ZRC") where the AEIC will attach Assumption of
Liability Endorsements to certain policies within the scope of this Agreement,
under which RECO or ZRC will assume the direct policy obligations of the AEIC
to certain insureds (as payees of RECO or ZRC) upon the AEIC's insolvency.  In
such event, RECO or ZRC, as the case may be, is considered the payee of the
Reinsurers under this Agreement and payment to RECO or ZRC under this Agreement
will extinguish the Reinsurers' liability hereunder to the extent of such
payment.  In no event will the Reinsurers be subject to multiple liability for
any loss or expense payable under this Agreement.  Any amount paid by the
Reinsurers to RECO or ZRC will be deemed as payment by the Reinsurers under
this Agreement and will not be recoverable from the Reinsurers under this
Agreement by the AEIC or its liquidator, receiver, or statutory successor.




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