REINSURANCE
                                   AGREEMENT
                                                                              











                                    Between
                                       
                     WESTERN UNITED LIFE ASSURANCE COMPANY
                                       
                                      and
                                       
                      OLD STANDARD LIFE INSURANCE COMPANY










                                       
                                       
                                       

                               TABLE OF CONTENTS
                                                                  Page

A.    REINSURANCE COVERAGE                                          1
B.    EFFECTIVE DATE OF AGREEMENT AND OF REINSURANCE                2
C.    AMOUNT DUE FROM REINSURED                                     2
D.    AMOUNT DUE FROM REINSURER                                     2
E.    MONTHLY REPORTS AND PAYMENT SCHEDULE                          2
F.    ANNUAL REPORTS                                                3
G.    TAX TREATMENT                                                 3
H.    UNUSUAL EXPENSES AND ADJUSTMENTS                              3
I.    POLICY ADMINISTRATION                                         4
J.    POLICY CHANGES                                                4
K.    ASSIGNMENT OF REINSURANCE                                     5
L.    ERRORS                                                        5
M.    REDUCTIONS AND CANCELLATIONS                                  5
N.    AUDIT OF RECORDS AND PROCEDURES                               5
O.    ARBITRATION                                                   6
P.    CHOICE OF LAW AND FORUM                                       6
Q.    INSOLVENCY                                                    6
R.    PARTIES TO AGREEMENT                                          7
S.    SUSPENSION AND REACTIVATION                                   7
T.    DURATION AND TERMINATION                                      8
U.    MISCELLANEOUS                                                 8
V.    EXECUTION                                                     9
            SCHEDULES
            SCHEDULE I                                             10
            SCHEDULE II                                            11
            SCHEDULE III                                           13
            SCHEDULE IV                                            14
            SCHEDULE V                                             15
            SCHEDULE VI                                            17

                  R E I N S U R A N C E    A G R E E M E N T
                                    between
                     WESTERN UNITED LIFE ASSURANCE COMPANY
                                      of
                             Spokane, Washington.,
                hereinafter referred to as the "REINSURED," and
                      OLD STANDARD LIFE INSURANCE COMPANY
                                      of
                                 Boise, Idaho,
                  hereinafter referred to as the "REINSURER."
                                       
                                       
                                       
                            A. REINSURANCE COVERAGE
1. The  annuity policies issued by the REINSURED listed on Schedule  I  (  the
   "Policies")  shall be reinsured with the REINSURER in accordance  with  the
   terms of this Agreement.
2. The  reinsurance shall cover all benefits provided by the Policies  in  the
   amount of the Reinsurance Share set forth in Schedule I.
3. The liability of the REINSURER shall begin:
   a. for Policies written by REINSURED from and including April 1, 1998 up to
   but  not  including  the  Effective Date of this  Agreement  (Closed  Block
   Policies) as of the date each such Policy was issued; and
   b.     for Policies issued on or after the Effective Date of this Agreement
   (Open Block Policies), concurrently with that of the REINSURED.
4.        Reinsurance  with respect to any Policy shall not be  in  force  and
   binding unless the Policy issued directly by the REINSURED is in force  and
   unless  the issuance and delivery of such Policy constituted the  doing  of
   business  in  a  state  of the United States of America,  the  District  of
   Columbia, or a country in which the REINSURED was properly licensed.
5. The  reinsurance under this Agreement with respect to any Policy  shall  be
   maintained  in  force  without reduction so long as the  liability  of  the
   REINSURED  under such reinsured Policy remains in force, without reduction,
   unless reinsurance is terminated or reduced as provided herein pursuant  to
   Sections T and M respectively.

               B. EFFECTIVE DATE OF AGREEMENT AND OF REINSURANCE
1.       The Effective Date of this Agreement shall be __________
2. Closed  Block Policies shall be reinsured in bulk on the Effective Date  of
   this Agreement,
3. Open  Block Policies shall be reinsured automatically upon the issuance  of
   any such Policy by the REINSURED.

                         C. AMOUNTS DUE FROM REINSURED
The  REINSURED shall pay the REINSURER the Reinsurance Share, as set forth  in
Schedule  I,  of  the  Premiums  received by  the  REINSURED,  plus  interest,
calculated as set forth in Schedule IV.

                         D. AMOUNTS DUE FROM REINSURER
1. Benefits
   The REINSURER shall pay the REINSURED:
   a.  the  Reinsurance  Share of the gross amount of  all  death  or  annuity
   benefits paid by the REINSURED (i.e., without deduction for reserves)  with
   respect to  the Policies reinsured hereunder; and
   b.  the  Reinsurance  Share of the cash surrender value  net  of  surrender
   charges  paid  by  the  REINSURED  with respect to the  Policies  reinsured
   hereunder, and
2. Commissions
   The  REINSURER shall pay the REINSURED the Reinsurance Share of Commissions
   paid by the REINSURED  with respect to Policies reinsured hereunder.
3. Administrative Allowances
   The  REINSURER  shall  pay the REINSURED the Administrative  Allowances  as
   defined in Schedule I as follows:
   a.  The  Policy Issuance Allowances shall be a one time charge  payable  in
   full concurrent with payment of the reinsurance Premiums by the REINSURED.
   b. The Policy Servicing Allowances shall be payable monthly by REINSURER.

                    E. MONTHLY REPORTS AND PAYMENT SCHEDULE
1. Except  as  otherwise specifically provided herein, all amounts due  to  be
   paid  by either the REINSURER or the REINSURED shall be determined and paid
   on a net basis calculated as of the last day of the calendar month to which
   such  amount is attributable, plus interest calculated and accrued pursuant
   to Schedule IV.
2. The  REINSURED  shall submit a monthly report substantially  in  accordance
   with Schedule II (the "Monthly Report") not later than the fifteenth day of
   each  calendar month, regarding reinsurance occurring during the  preceding
   calendar month.
3.       Any amounts indicated in the Monthly Report as due from the REINSURED
   to the REINSURER shall accompany such report.  Any amounts indicated in the
   Monthly Report as due from the REINSURER to the REINSURED shall be paid  by
   the  REINSURER  within fifteen (15) days after REINSURER'S receipt  of  the
   Monthly Report plus interest accrued up to the date of such payment.
4.       Interest shall be calculated and accrue as specified in Schedule IV.

                               F. ANNUAL REPORTS
1. Not  later  than thirty (30) days after the end of each calendar year,  the
   REINSURED  shall submit to the REINSURER an Annual Report substantially  in
   accordance with Schedule III.
2. Each  year  the REINSURED shall provide the REINSURER with a  copy  of  its
   annual  financial reports prepared in accordance with GAAP, if  applicable,
   and its annual statutory statement, as soon as they are available.

                               G. TAX TREATMENT
The  parties  elect to have this Agreement treated in accordance with  Section
1.848-2(g)(8) of the Income Tax Regulations issued under Section  848  of  the
Internal Revenue Code of 1986. Specific details of this election are set forth
in Schedule VI.

                      H. UNUSUAL EXPENSES AND ADJUSTMENTS
1. Any unusual expenses, as hereinafter defined, incurred by the REINSURED  in
   defending  or investigating a claim for liability on a Policy or rescinding
   a  Policy reinsured hereunder shall be participated in by the REINSURER  in
   the same proportion as its Reinsurance Share.
2. Unusual expenses shall include, but not be limited to, penalties, attorneys
   fees,  and  interest imposed automatically by statute against the REINSURED
   and  arising solely out of a judgment rendered against the REINSURED  in  a
   suit for Policy benefits reinsured hereunder.
3. The  following categories of expenses or liabilities shall not be  "unusual
   expenses":
   a. routine investigative or administrative expenses;
   b. expenses incurred in connection with a dispute or contest arising out of
   conflicting claims of entitlement to Policy proceeds or benefits which  the
   REINSURED admits are payable;
   c.  expenses,  fees,  settlements,  or  judgments  arising  out  of  or  in
   connection  with  claims against the REINSURED for  punitive  or  exemplary
   damages; and
   d.  expenses,  fees,  settlements,  or  judgments  arising  out  of  or  in
   connection  with claims made against the REINSURED and based on alleged  or
   actual bad faith, failure to exercise good faith, or tortious conduct.

                           I. POLICY ADMINISTRATION
1. The  Policies  reinsured pursuant to the terms of this Agreement  shall  be
   administered by the REINSURED in accordance with the terms of  each  Policy
   and in compliance with applicable statutes, regulations and rules.
2. Administrative expenses incurred in connection with administration  of  the
   Policies reinsured hereunder shall be paid by REINSURED and reimbursable by
   REINSURER pursuant to Section H hereinabove and Schedule I.

                               J. POLICY CHANGES
1. All Policies shall be underwritten in accordance with the REINSURED'S
   underwriting rules applicable to such Policies as of the Effective Date of
   this Agreement.
2. If  the  REINSURED intends to make a change in the terms or  conditions  or
   underwriting  rules  of  a Policy reinsured hereunder  including,  but  not
   limited  to a change in the method used to calculate the statutory  reserve
   on  the  Policy  and  such change is likely to affect  the  risk  reinsured
   hereunder  in  respect  of  such Policy, the  REINSURED  shall  notify  the
   REINSURER of such proposed change.
3. For  purposes  of  this Agreement, any change made to  a  Policy  reinsured
   hereunder  which has not been approved by the REINSURER shall be deemed  to
   be  the issuance of a new policy form by the REINSURED. The REINSURER shall
   inform  the  REINSURED whether the REINSURER will include such  new  policy
   form  under  this  Agreement or will terminate or  modify  the  reinsurance
   hereunder in respect of such policy.
4. Unless  otherwise agreed by the REINSURER and the REINSURED,  the  interest
   rates  credited  on  the Policies reinsured hereunder shall  be  determined
   according to interest rates credited by the REINSURED.

                         K. ASSIGNMENT OF REINSURANCE
If  the  REINSURED proposes to sell, assumption reinsure or otherwise transfer
the  Policies  or risks that are reinsured under this Agreement to  any  third
party, it shall require that the third party agree in writing to an assignment
of  all  rights  and  obligations of the REINSURED under this  Agreement.  The
REINSURER may object to any assignment that would result in a material adverse
economic impact to the REINSURER. If the REINSURER objects to an assignment on
this  basis,  the  REINSURED  and the REINSURER  shall  mutually  agree  on  a
termination charge which shall be paid by the REINSURED to the REINSURER.

                                   L. ERRORS
If  either  party  identifies an error in the Monthly  Reports  or  any  other
inadvertent  clerical error, then such error shall be corrected  by  restoring
both the REINSURED and the REINSURER to the positions they would have occupied
had no such error occurred.  If the error relates to a Monthly report or other
report, the REINSURED shall promptly provide a revised report to REINSURER.

                        M. REDUCTIONS AND CANCELLATIONS
1. If  a portion of a Policy is terminated, the REINSURER shall return to  the
   REINSURED  any reinsurance Premiums on that Policy in the amount  that  the
   Reinsurance Share bears to the amount of the reduction.
2. If  a  Policy  is  cancelled in accordance with a thirty  day  cancellation
   provision, the REINSURED shall refund the entire Policy Issuance  Allowance
   to  the  REINSURER,  and the REINSURER shall refund the entire  Reinsurance
   Share  of  the  Premiums to REINSURED each as they relate to the  cancelled
   Policy
3.        Payments made pursuant to a reduction or cancellation shall  include
   interest and be paid pursuant to Section E.

                      N. AUDIT OF RECORDS AND PROCEDURES
1. The  REINSURER and the REINSURED each shall have the right to audit, at the
   office  of  the  other, all records and procedures relating to  reinsurance
   under this Agreement.
2. Upon  reasonable  notice  to  the  REINSURED,  the  REINSURER  may  require
   additional monthly or annual reports from the REINSURED in order to  obtain
   the  data  REINSURER reasonably needs to properly administer this Agreement
   or to prepare its financial statements.

                                O. ARBITRATION
If the REINSURED and the REINSURER cannot mutually resolve a dispute regarding
the  interpretation  or  operation of this Agreement,  the  dispute  shall  be
decided  through  arbitration as set forth in the Schedule V. The  arbitrators
shall  base  their  decision on the terms and conditions  of  this  Agreement.
However,  if  the  terms and conditions of this Agreement  do  not  explicitly
dispose  of an issue in dispute between the parties, the arbitrators may  base
their  decision on the customs and practices of the insurance and  reinsurance
industry  rather  than  solely on an interpretation  of  applicable  law.  The
arbitrators' decision shall take into account the right to offset mutual debts
and  credits as provided in this Agreement. There shall be no appeal from  the
arbitrators'  decision. Any court having jurisdiction over the subject  matter
and over the parties may reduce the arbitrators' decision to judgment.

The  parties  intend  this section to be enforceable in  accordance  with  the
Federal Arbitration Act (9 U.S.C., Section 1) including any amendments to that
Act which are subsequently adopted. In the event that either party refuses  to
submit  to arbitration as required by paragraph 1, the other party may request
a  United  States Federal District Court to compel arbitration  in  accordance
with the Federal Arbitration Act. Both parties consent to the jurisdiction  of
such  court to enforce this section and to confirm and enforce the performance
of any award of the arbitrators.

                          P. CHOICE OF LAW AND FORUM
Idaho law shall govern the terms and conditions of the Agreement. In the  case
of an arbitration, the arbitration hearing shall take place in Boise, Idaho,
                                       
                                 Q. INSOLVENCY
1. In  the event of the insolvency of the REINSURED, all reinsurance shall  be
   payable  directly  to the liquidator, receiver, or statutory  successor  of
   said  REINSURED,  without  diminution because  of  the  insolvency  of  the
   REINSURED.
2. In  the event of the insolvency of the REINSURED, the liquidator, receivor,
   or  statutory  successor shall give the REINSURER  written  notice  of  the
   pendency  of a claim on a Policy reinsured within a reasonable  time  after
   such  claim  is filed in the insolvency proceeding. During the pendency  of
   any such claim, the REINSURER may investigate such claim and interpose,  in
   the   name  of  the  REINSURED  (its  liquidator,  receiver,  or  statutory
   successor), but at its own expense, in the proceeding where such  claim  is
   to  be  adjudicated, any defense or defenses which the REINSURER  may  deem
   available  to  the  REINSURED  or its liquidator,  receiver,  or  statutory
   successor.
3. The expense thus incurred by the REINSURER shall be chargeable, subject  to
   court approval, against the REINSURED as part of the expense of liquidation
   to  the extent of a proportionate share of the benefit which may accrue  to
   the  REINSURED  solely  as  a  result of  the  defense  undertaken  by  the
   REINSURER. Where two or more reinsurers are participating in the same claim
   and  a majority in interest elect to interpose a defense or defenses to any
   such  claim, the expense shall be apportioned in accordance with the  terms
   of  the  reinsurance agreement as though such expense had been incurred  by
   the REINSURED.
4. Any  debts  or  credits, matured or unmatured, liquidated or  unliquidated,
   regardless  of  when they arose or were incurred, in favor  of  or  against
   either  the  REINSURED or the REINSURER with respect to this  Agreement  or
   with  respect to any other claim of one party against the other are  deemed
   mutual debts or credits, as the case may be, and shall be set off, and only
   the balance shall be allowed or paid.

                            R. PARTIES TO AGREEMENT
This  is  an agreement for indemnity reinsurance solely between the  REINSURED
and  the  REINSURER. The acceptance of reinsurance hereunder shall not  create
any right or legal relation whatever between the REINSURER and the insured  or
the  beneficiary under any Policy reinsured hereunder, and the REINSURED shall
be  and  remain  solely liable to such insured or beneficiary under  any  such
Policy.

                        S. SUSPENSION AND REACTIVATION
1.        This  Agreement may be suspended at any time and from time  to  time
   with  respect to all or any of the Policy forms upon five (5) days  written
   notice  from  either party with respect to reinsurance not  yet  placed  in
   force.  The REINSURER shall continue to accept reinsurance during the  five
   (5)  day  notice period, and shall remain liable on all Policies placed  in
   effect  under this Agreement until the effective date of the suspension  of
   this Agreement.
2.        This  Agreement may be by reactivated at any time, and from time  to
   time,  with  respect to all or any of the Policy forms upon  five  (5)  day
   written  notice from either party.  The REINSURER shall accept  reinsurance
   at  the end of the five (5) day notice period and be liable on all Policies
   placed  in  effect  under  this Agreement until the  Agreement  is  further
   suspended or terminated.

                          T. DURATION AND TERMINATION
1. Except as otherwise provided herein, this Agreement shall be unlimited in
   duration.
2. This Agreement may be terminated at any time by either the REINSURER or the
   REINSURED upon thirty (30) days' written notice with respect to reinsurance
   not yet placed in force. The REINSURER shall continue to accept reinsurance
   during  the thirty (30) day notice period, and shall remain liable  on  all
   reinsurance placed in effect under this Agreement until the termination  or
   expiration of the Policy reinsured.
3. Upon ninety (90) days' written notice to the the other party, REINSURER and
   REINSURED  shall  have  the  right  to  terminate  reinsurance  under  this
   Agreement with respect to those Policies which have attained the  tenth  or
   any  subsequent  anniversary of having been reinsured hereunder.  Any  such
   termination  shall  apply to all Policies which  attain  the  same  or  any
   subsequent  anniversary within the twelve (12) month period  following  the
   effective  date of such notice of termination. Termination with respect  to
   each  affected  Policy  shall be effective as of the  anniversary  of  such
   Policy  having  been reinsured hereunder. The REINSURER shall  pay  to  the
   REINSURED  a surrender benefit equal to the surrender value of each  Policy
   for which reinsurance is terminated.
4. The  termination  of this Agreement or of the reinsurance in  effect  under
   this  Agreement  shall  not  extend to or  affect  any  of  the  rights  or
   obligations  of the REINSURED and the REINSURER applicable  to  any  period
   prior  to  the  effective  date of such termination.  In  the  event  that,
   subsequent  to  the  termination of this Agreement, an adjustment  is  made
   necessary  with  respect  to  any  accounting  hereunder,  a  supplementary
   accounting shall take place. Any amount owed to either party by  reason  of
   such  supplementary accounting shall be paid promptly upon  the  completion
   thereof.

                               U. MISCELLANEOUS
1. This  Agreement represents the entire agreement between the  REINSURED  and
   REINSURER  and  supersedes, with respect to its subject matter,  any  prior
   oral or written agreements between the parties.
2. No  modification  of  any provision of this Agreement  shall  be  effective
   unless set forth in a written amendment to this Agreement which is executed
   by both parties.
3. A  waiver  shall  constitute a waiver only with respect to  the  particular
   circumstance  for  which  it  is given and  not  a  waiver  of  any  future
   circumstance.

                                 V. EXECUTION
                              IN WITNESS WHEREOF
                     WESTERN UNITED LIFE ASSURANCE COMPANY
                                      of
                             Spokane, Washington.,
                                      and
                      OLD STANDARD LIFE INSURANCE COMPANY
                                      of
                                 Boise, Idaho,
have by their respective officers executed this Agreement in duplicate on  the
dates shown below.
WESTERN UNITED LIFE ASSURANCE COMPANY

By                                  By
      Title:                              Title:

Date                                Date

OLD STANDARD LIFE INSURANCE COMPANY


By                                  By
   Title:                              Title:


Date                                Date
                                  SCHEDULE I
                                       
      POLICIES SUBJECT TO REINSURANCE, AMOUNT OF REINSURANCE & ALLOWANCES
                                       


                         Reinsurance Share            Administrative Allowances
                                                                          
Trade Name      Premiums      Policy      Commissions    Policy        Policy
                             Reserves                   Issuance      Servicing
                             Claims &
                             Benefits
                                                                          
Opti-Max I         75%          75%           75%         1.50%        0.0333%
TD-Max I           75%          75%           75%         1.50%        0.0333%
TD-Max III         75%          75%           75%         1.50%        0.0333%
TD Max V           75%          75%           75%         1.50%        0.0333%
Navigator II       75%          75%           75%         1.50%        0.0333%
Unimax III         75%          75%           75%         1.50%        0.0333%
Spectrum           75%          75%           75%         1.50%        0.0333%
Prism              75%          75%           75%         1.50%        0.0333%
Value-Max VII      75%          75%           75%         1.50%        0.0333%
Value-Max X        75%          75%           75%        1.50%.        0.0333%
Opti-Max III       75%          75%           75%         1.50%        0.0333%
Opti-Max V         75%          75%           75%         1.50%        0.0333%
Opti-Max VII       75%          75%           75%         1.50%        0.0333%
Opti-Max X         75%          75%           75%         1.50%        0.0333%
TD Max V-V         75%          75%           75%         1.50%        0.0333%
                                                                          
Basis for         Gross       Policy      Commissions  Reinsurance   Reinsurance
charge          Premiums     Reserves,     Incurred    Quota Share   Quota Share
                           Policy Claims                of Gross         of
                            & Benefits                  Premiums     Acct Value
                                                                           
                                  SCHEDULE II
                     Annuity Reinsurance Monthly Report to
                                       
                      OLD STANDARD LIFE INSURANCE COMPANY
                                       

Amounts Due OLD STANDARD LIFE INSURANCE COMPANY
Premiums received during the month by REINSURED multiplied by
the Reinsurance Share applicable to each Policy                   $


Sum of amounts due to OLD STANDARD LIFE INSURANCE COMPANY         $

Amounts Due WESTERN UNITED LIFE ASSURANCE COMPANY

Commission Allowance (Attach detailed worksheet of calculations)  $

Policy Issue Allowances (Attach detailed worksheet of
calculations)                                                     $

Monthly Administrative Servicing  Allowances (Attach
detailed worksheet of calculations)                               $

Surrender values paid during the month multiplied by
the Reinsurance Share percentage                                  $

Policy Reductions paid during the month multiplied by the
Reinsurance Share                                                 $__________

Death benefits paid during the month multiplied by the
Reinsurance Share percentage                                      $

Policy Cancellations (Attach detailed worksheet of calculations)1 $

Sum of amounts due to WESTERN UNITED LIFE ASSURANCE COMPANY       $

Net of amount due (sum of amounts due OLD STANDARD LIFE INSURANCE
Company minus sum of amounts due to WESTERN UNITED LIFE
ASSURANCE)                                                        $

Interest on the above amount calculated pursuant to Schedule IV   $__________

Net amount due plus interest                                      $

Note:  If  the  net amount due is negative, then that amount is due  from  OLD
STANDARD LIFE INSURANCE COMPANY to WESTERN UNITED LIFE ASSURANCE COMPANY.

Additional Items:

A monthly listing of statutory and GAAP reserves, account values, and interest
credited.
                                 SCHEDULE III
                                       
                                 ANNUAL REPORT

The annual report shall provide the following information:

      (a) Exhibit 8 from the NAIC-prescribed annual statement
      
      (b)  a  breakdown  of the reserves by withdrawal characteristic  of  the
      annuity contract
      
      (c)  "Analysis of Increase in Reserves" from the NAIC-prescribed  annual
      statement
      
      (d) "Exhibit of Annuities" from the NAIC-prescribed annual statement
      
      (e) an actuarial certification of the reported statutory reserves
      
      (f) tax reserves and required interest.

                                  SCHEDULE IV
                                       
INTEREST RATE

The  rate of interest shall be equal to the effective annual yield of  the  90
day Treasury bill determined at the close of business on the last business day
of the month for the amount owed is being determined.

INTEREST ACCRUAL CALCULATION
Interest shall be calculated on the monthly ending amount due and accrued from
the preceding 15th day of such month.

                                  SCHEDULE V
                                       
                             ARBITRATION SCHEDULE

To  initiate  arbitration, either the REINSURED or the REINSURER shall  notify
the other party in writing of its desire to arbitrate, relating the nature  of
its dispute and the remedy sought. The party to which the notice is sent shall
respond to the notification in writing within ten (10) days of its receipt.

The arbitration hearing shall be before a panel of three arbitrators, each  of
whom  must  be  a  present or former officer of a life insurance  company.  An
arbitrator may not be a present or former officer, attorney, or consultant  of
the REINSURED or the REINSURER or either's affiliates.

The  REINSURED and the REINSURER shall each name five (5) candidates to  serve
as  an  arbitrator.  The  REINSURED and the REINSURER shall  each  choose  one
candidate from the other party's list, and these two candidates shall serve as
the  first two arbitrators. If one or more candidates so chosen shall  decline
to  serve as an arbitrator, the party which named such candidate shall add  an
additional  candidate to its list, and the other party shall again choose  one
candidate  from  the list. This process shall continue until  two  arbitrators
have been chosen and have accepted. The REINSURED and the REINSURER shall each
present their initial lists of five (5) candidates by written notification  to
the other party within twenty-five (25) days of the date of the mailing of the
notification initiating the arbitration. Any subsequent additions to the  list
which  are  required shall be presented within ten (10) days of the  date  the
naming party receives notice that a candidate that has been chosen declines to
serve.

The  two arbitrators shall then select the third arbitrator from the eight (8)
candidates  remaining on the lists of the REINSURED and the  REINSURER  within
fourteen (14) days of the acceptance of their positions as arbitrators. If the
two  arbitrators cannot agree on the choice of a third, then this choice shall
be  referred  back to the REINSURED and the REINSURER. The REINSURED  and  the
REINSURER  shall  take  turns  striking the  name  of  one  of  the  remaining
candidates  from  the initial eight (8) candidates until  only  one  candidate
remains.  If  the  candidate so chosen shall decline to  serve  as  the  third
arbitrator,  the candidate whose name was stricken last shall be nominated  as
the  third arbitrator. This process shall continue until a candidate has  been
chosen  and  has accepted. This candidate shall serve as the third arbitrator.
The  first turn at striking the name of a candidate shall belong to the  party
that  is  responding to the other party's initiation of the arbitration.  Once
chosen, the arbitrators are empowered to decide all substantive and procedural
issues by a majority of votes.

It  is agreed that each of the three arbitrators should be impartial regarding
the  dispute  and  should resolve the dispute on the basis  described  in  the
Agreement and this ARBITRATION Schedule. Therefore, at no time will either the
REINSURED  or the REINSURER contact or otherwise communicate with  any  person
who  is  to be or has been designated as a candidate to serve as an arbitrator
concerning   the   dispute,  except  upon  the  basis   of   jointly   drafted
communications  provided  by both the REINSURED and the  REINSURER  to  inform
those candidates actually chosen as arbitrators of the nature and facts of the
dispute.  Likewise, any written or oral arguments provided to the  arbitrators
concerning the dispute shall be coordinated with the other party and shall  be
provided simultaneously to the other party or shall take place in the presence
of  the other party. Further, at no time shall any arbitrator be informed that
the arbitrator has been named or chosen by one party or the other.

The arbitration hearing shall be held on the date fixed by the arbitrators. In
no event shall this date be later than six (6) months after the appointment of
the  third  arbitrator. As soon as possible, the arbitrators  shall  establish
prearbitration  procedures  as  warranted by  the  facts  and  issues  of  the
particular case. At least ten (10) days prior to the arbitration hearing, each
party  shall  provide  the  other party and the arbitrators  with  a  detailed
statement  of  the  facts  and arguments it will present  at  the  arbitration
hearing.  The arbitrators may consider any relevant evidence; they shall  give
the  evidence  such weight as they deem it entitled to after consideration  of
any  objections  raised  concerning it. The party initiating  the  arbitration
shall  have the burden of proving its case by a preponderance of the evidence.
Each  party may examine any witnesses who testify at the arbitration  hearing.
Within  twenty  (20)  days  after  the end of  the  arbitration  hearing,  the
arbitrators shall issue a written decision that sets forth their findings  and
any  award  to  be  paid  as  a  result of the arbitration,  except  that  the
arbitrators  may  not award punitive or exemplary damages. In their  decision,
the  arbitrators  shall also apportion the costs of arbitration,  which  shall
include, but not be limited to, their own fees and expenses.

                                  SCHEDULE VI
                                       
                        SECTION 1.848-2(g)(8) ELECTION

The  REINSURED  and the REINSURER agree to the following pursuant  to  Section
1.848-2(g)(8) of the Income Tax Regulations issued under Section  848  of  the
Internal Revenue Code of 1986 (hereinafter "Section 1.848-2(g)(8).")
      1.    As used below, the term "party" will refer to the REINSURED or the
            REINSURER as appropriate.
      2.    As   used   below,   the  phrases  "net  positive  consideration",
            "capitalize  specified  Policy  acquisition  expenses",   "general
            deductions  limitation", and "net consideration"  shall  have  the
            meaning used in Section 1.848-2(g)(8).
      3.    The  party with net positive consideration for this Agreement  for
            any  taxable  year beginning with the taxable year  prescribed  in
            paragraph  5  below  will capitalize specified Policy  acquisition
            expenses  with  respect to this Agreement without  regard  to  the
            general deductions limitation.
      4.    The parties agree to exchange information pertaining to the amount
            of  net  consideration under this Agreement to ensure consistency.
            This will be accomplished as follows:
                  (a)   The  REINSURED  shall submit to the REINSURER  by  the
                        fifteenth day of March in each year its calculation of
                        the net consideration for the preceding calendar year.
                        Such  calculation will be accompanied by  a  statement
                        signed by an officer of the REINSURED stating that the
                        REINSURED  will report such net consideration  in  its
                        tax return for the preceding calendar year.
                  
                  (b)   The   REINSURER   may  contest  such  calculation   by
                        providing  an alternative calculation to the REINSURED
                        in  writing within thirty (30) days of the REINSURER'S
                        receipt  of  the  REINSURED'S  calculation.   If   the
                        REINSURER  does  not  so  notify  the  REINSURED,  the
                        REINSURER   will  report  the  net  consideration   as
                        determined  by  the REINSURED in the  REINSURER'S  tax
                        return for the previous calendar year.
                  
                  (c)   If  the REINSURER contests the REINSURED'S calculation
                        of the net consideration, the parties will act in good
                        faith  to reach an agreement as to the current  amount
                        within  thirty  (30)  days of the date  the  REINSURER
                        submits  its alternative calculation. If the REINSURED
                        and  the REINSURER reach agreement on an amount of net
                        consideration, each party shall report such amount  in
                        their   respective  tax  returns  for  the   preceding
                        calendar year.

5.    This election shall be effective for 1998 and all subsequent taxable
years for which the Reinsurance Agreement remains in effect.