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                                                                   EXHIBIT 10.16

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                     Platinum Underwriters Reinsurance, Inc.
                               Baltimore, Maryland
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                       PROPERTY CATASTROPHE EXCESS OF LOSS
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2003

                         issued to and duly executed by

                           Glencoe Group of Companies
                     and its Quota Share Reinsurers, if any
                                    including
                             Glencoe Insurance Ltd.
                                Hamilton, Bermuda
                          Stonington Insurance Company
                                  Dallas, Texas
                       Stonington Lloyds Insurance Company
                                  Dallas, Texas
                                       and
                             Lantana Insurance Ltd.
                                Hamilton, Bermuda

The Subscribing Reinsurer hereby accepts the following percentage shares in the
interests and liabilities of the "Reinsurer" as set forth in the attached
Contract captioned above:

          5.00%  of the First Property Catastrophe Excess of Loss Reinsurance
          5.00%  of the Second Property Catastrophe Excess of Loss Reinsurance
          5.00%  of the Third Property Catastrophe Excess of Loss Reinsurance
          5.00%  of the Fourth Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Local Standard Time, July
1, 2003, and shall continue in force until 12:01, Local Standard Time, July 1,
2004, unless earlier terminated in accordance with the provisions of the
attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and
apart from the shares of the other reinsurers, and shall not be joint with the
shares of the other reinsurers, it being understood that the Subscribing
Reinsurer shall in no event participate in the interests and liabilities of the
other reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the undermentioned at:

New York, New York, this the 25th day of September in the year 2003.

                  /s/ Joseph A. Barrett, Jr. (Vice President)
                  -------------------------------------------
                  Platinum Underwriters Reinsurance, Inc.

<PAGE>

                       PROPERTY CATASTROPHE EXCESS OF LOSS
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2003

                                    issued to

                           Glencoe Group of Companies
                     and its Quota Share Reinsurers, if any
                                    including
                             Glencoe Insurance Ltd.
                                Hamilton, Bermuda
                          Stonington Insurance Company
                                  Dallas, Texas
                       Stonington Lloyds Insurance Company
                                  Dallas, Texas
                                       and
                             Lantana Insurance Ltd.
                                Hamilton, Bermuda

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
                                                 PAGE
                                                 ----
<S>                                              <C>
ARTICLE
      I   Classes of Business Reinsured            1
     II   Commencement and Termination             2
    III   Territory                                3
     IV   Exclusions                               3
      V   Retention and Limit                      5
     VI   Reinstatement                            5
    VII   Definitions                              7
   VIII   Other Reinsurance                        9
     IX   Loss Occurrence                          9
      X   Loss Notices and Settlements            11
     XI   Salvage and Subrogation                 12
    XII   Reinsurance Premium                     12
   XIII   Offset (BRMA 36C)                       13
    XIV   Access to Records                       13
     XV   Liability of the Reinsurer              13
    XVI   Net Retained Lines (BRMA 32E)           13
   XVII   Errors and Omissions (BRMA 14E)         13
  XVIII   Currency (BRMA 12A)                     14
    XIX   Taxes (BRMA 50C)                        14
     XX   Federal Excise Tax (BRMA 17A)           14
    XXI   Reserves and Letters of Credit          14
   XXII   Insolvency                              17
  XXIII   Arbitration                             17
   XXIV   Service of Suit (BRMA 49C)              18
    XXV   Entire Agreement                        19
   XXVI   Agency Agreement                        19
  XXVII   Intermediary (BRMA 23A)                 19
          Schedule A
</TABLE>

<PAGE>

                       PROPERTY CATASTROPHE EXCESS OF LOSS
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2003

                                    issued to

                           Glencoe Group of Companies
                     and its Quota Share Reinsurers, if any
                                    including
                             Glencoe Insurance Ltd.
                                Hamilton, Bermuda
                          Stonington Insurance Company
                                  Dallas, Texas
                       Stonington Lloyds Insurance Company
                                  Dallas, Texas
                                       and
                             Lantana Insurance Ltd.
                                Hamilton, Bermuda
             (hereinafter referred to collectively as the "Company")

                                       by

                   The Subscribing Reinsurer(s) Executing the
                     Interests and Liabilities Agreement(s)
                                 Attached Hereto
                  (hereinafter referred to as the "Reinsurer")

ARTICLE I - CLASSES OF BUSINESS REINSURED

A.    By this Contract the Reinsurer agrees to reinsure the excess liability
      which may accrue to the Company under its policies, contracts, binders,
      certificates and other obligations, whether written or oral, of insurance
      or reinsurance (hereinafter called "policies") in force at the effective
      date hereof or issued or renewed on or after that date, and classified by
      the Company as Property business, including quota share treaties and
      excess facultative reinsurance, subject to the terms, conditions and
      limitations set forth herein and in Schedule A attached to and forming
      part of this Contract.

B.    Notwithstanding the provisions of paragraph A above, the Company shall
      have the right to exclude specific programs, including quota share
      treaties and excess facultative reinsurance, subject to appropriate file
      notation at the time of writing.

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ARTICLE II - COMMENCEMENT AND TERMINATION

A.    This Contract shall become effective at 12:01 a.m., Local Standard Time,
      July 1, 2003, with respect to losses arising out of loss occurrences
      commencing at or after that time and date, and shall remain in force until
      12:01 a.m., Local Standard Time, July 1, 2004.

B.    Notwithstanding the provisions of paragraph A above, the Company may
      terminate a Subscribing Reinsurer's percentage share in this Contract at
      any time by giving written notice to the Subscribing Reinsurer in the
      event any of the following circumstances occur:

      1.    The Subscribing Reinsurer's policyholders' surplus at the inception
            of this Contract has been reduced by more than 25.0% of the amount
            of surplus (or stamp capacity, in respect of Lloyds Syndicates) 12
            months prior to that date; or

      2.    The Subscribing Reinsurer's policyholders' surplus at any time
            during the term of this Contract has been reduced by more than 25.0%
            of the amount of surplus (or stamp capacity, in respect of Lloyds
            Syndicates) at the date of the Subscribing Reinsurer's most recent
            financial statement filed with regulatory authorities and available
            to the public as of the inception of this Contract; or

      3.    The Subscribing Reinsurer's A.M. Best's rating has been assigned or
            downgraded below A- and/or Standard and Poor's rating has been
            assigned or downgraded below BBB+; or

      4.    The Subscribing Reinsurer has become merged with, acquired by or
            controlled by any other company, corporation or individual(s) not
            controlling the Subscribing Reinsurer's operations previously; or

      5.    A State Insurance Department or other legal authority has ordered
            the Subscribing Reinsurer to cease writing business; or

      6.    The Subscribing Reinsurer has become insolvent or has been placed
            into liquidation or receivership (whether voluntary or involuntary)
            or proceedings have been instituted against the Subscribing
            Reinsurer for the appointment of a receiver, liquidator,
            rehabilitator, conservator or trustee in bankruptcy, or other agent
            known by whatever name, to take possession of its assets or control
            of its operations; or

      7.    The Subscribing Reinsurer has reinsured its entire liability under
            this Contract without the Company's prior written consent, except
            that this provision shall not apply to any intercompany reinsurance
            or intercompany pooling arrangements entered into by the Subscribing
            Reinsurer; or

      8.    The Subscribing Reinsurer has ceased assuming new and renewal
            property and casualty treaty reinsurance business.

C.    If this Contract is terminated or expires while a loss occurrence covered
      hereunder is in progress, the Reinsurer's liability hereunder shall,
      subject to the other terms and conditions of this Contract, be determined
      as if the entire loss occurrence had occurred prior to the

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      termination or expiration of this Contract, provided that no part of such
      loss occurrence is claimed against any renewal or replacement of this
      Contract.

ARTICLE III - TERRITORY

The liability of the Reinsurer shall be limited to losses under policies
covering property located within the territorial limits of the United States of
America, its territories or possessions, Puerto Rico, the District of Columbia,
Canada, and the Islands of the Caribbean; but this limitation shall not apply to
moveable property if the Company's policies provide coverage when said moveable
property is outside the aforesaid territorial limits.

ARTICLE IV - EXCLUSIONS

This Contract does not apply to and specifically excludes business classified by
the Company as follows:

      1.    Insolvency and Mortgage Impairment insurances and reinsurances.

      2.    Loss or liability excluded under the provisions of the "Pools,
            Associations and Syndicates Exclusion Clause" attached to and
            forming part of this Contract.

      3.    All liability of the Company arising by contract, operation of law,
            or otherwise, from its participation or membership, whether
            voluntary or involuntary, in any insolvency fund. "Insolvency fund"
            includes any guaranty fund, insolvency fund, plan, pool,
            association, fund or other arrangement, however denominated,
            established or governed, which provides for any assessment of or
            payment or assumption by the Company of part or all of any claim,
            debt, charge, fee or other obligation of an insurer, or its
            successors or assigns, which has been declared by any competent
            authority to be insolvent, or which is otherwise deemed unable to
            meet any claim, debt, charge, fee or other obligation in whole or in
            part.

      4.    Loss or damage caused by or resulting from war, invasion,
            hostilities, acts of foreign enemies, civil war, rebellion,
            insurrection, military or usurped power, or martial law or
            confiscation by order of any government or public authority, but
            this exclusion shall not apply to loss or damage covered under a
            standard policy with a standard War Exclusion Clause.

      5.    Nuclear risks as defined in the "Nuclear Incident Exclusion Clause -
            Physical Damage - Reinsurance (U.S.A.)" and the "Nuclear Incident
            Exclusion Clause - Physical Damage - Reinsurance (Canada)" attached
            to and forming part of this Contract.

      6.    Loss and/or damage and/or costs and/or expenses arising from seepage
            and/or pollution and/or contamination, other than contamination from
            smoke. Nevertheless, this exclusion does not preclude payment of the
            cost of removing debris of property damaged by a loss otherwise
            covered hereunder, subject always to a limit of 25% of the Company's
            property loss under the applicable original policy.

      7.    Financial Guarantee.

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      8.    Losses in respect of transmission and distribution lines and their
            supporting structures other than those on or within 150 meters (or
            500 feet) of the insured's premises.

      9.    Retrocessional business.

      10.   Loss, damage, cost or expense directly or indirectly caused by,
            contributed to by, resulting from or arising out of or in connection
            with any "act of terrorism" as defined in the Terrorism Risk
            Insurance Act of 2002 (the "Act"), regardless of any other cause or
            event contributing concurrently or in any sequence to the loss.

            Notwithstanding the above and subject otherwise to the terms,
            conditions and limitations of this Contract, this Contract will pay
            actual loss or damage (but not related cost or expense) caused by
            any act of terrorism which does not meet the definition of "act of
            terrorism" set forth in the Act or meets the definition of "act of
            terrorism" as set forth in the Act but results in loss under a
            policy that is not included in "property and casualty insurance" as
            defined in the Act, provided, in either case, (a) such loss or
            damage occurs in a line of insurance otherwise covered by this
            Contract, and (b) in no event will this Contract provide coverage
            for loss, damage, cost or expense directly or indirectly caused by,
            contributed to by, resulting from, or arising out of or in
            connection with biological, chemical or nuclear explosion,
            pollution, contamination and/or fire following thereon.

ARTICLE V - RETENTION AND LIMIT

A.    As respects each excess layer of reinsurance coverage provided by this
      Contract, the Company shall retain and be liable for the first amount of
      ultimate net loss, shown as "Company's Retention" for that excess layer in
      Schedule A attached hereto, arising out of each loss occurrence. The
      Reinsurer shall then be liable, as respects each excess layer, for the
      amount by which such ultimate net loss exceeds the Company's applicable
      retention, but the liability of the Reinsurer under each excess layer
      shall not exceed the amount, shown as "Reinsurer's Per Occurrence Limit"
      for that excess layer in Schedule A attached hereto, as respects any one
      loss occurrence.

B.    As respects each excess layer of reinsurance coverage provided by this
      Contract, the Company shall retain at least 5.0% part of a 100% share in
      the interests and liabilities of the "Reinsurer" under each excess layer
      of this Contract.

C.    It is warranted that no claim shall be made under any excess layer of
      coverage provided by this Contract in any one loss occurrence unless at
      least two risks insured or reinsured by the Company are involved in such
      loss occurrence. For purposes hereof, the Company shall be the sole judge
      of what constitutes one risk, but in no event shall a building and its
      contents be considered more than one risk.

ARTICLE VI - REINSTATEMENT

A.    In the event all or any portion of the reinsurance under any excess layer
      of reinsurance coverage provided by this Contract is exhausted by loss,
      the amount so exhausted shall be reinstated immediately from the time the
      loss occurrence commences hereon. For each amount so reinstated the
      Company agrees to pay additional premium equal to the product of the
      following:

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      1.    The percentage of the occurrence limit for the excess layer
            reinstated (based on the loss paid by the Reinsurer under that
            excess layer); times

      2.    The earned reinsurance premium for the excess layer reinstated for
            the term of this Contract (exclusive of reinstatement premium).

B.    Whenever the Company requests payment by the Reinsurer of any loss under
      any excess layer hereunder, the Company shall submit a statement to the
      Reinsurer of reinstatement premium due the Reinsurer for that excess
      layer. If the earned reinsurance premium for any excess layer for the term
      of this Contract has not been finally determined as of the date of any
      such statement, the calculation of reinstatement premium due for that
      excess layer shall be based on the annual deposit premium for that excess
      layer and shall be readjusted when the earned reinsurance premium for that
      excess layer for the term of this Contract has been finally determined.
      Any reinstatement premium shown to be due the Reinsurer for any excess
      layer as reflected by any such statement (less prior payments, if any, for
      that excess layer) shall be payable by the Company concurrently with
      payment by the Reinsurer of the requested loss for that excess layer. Any
      return reinstatement premium shown to be due the Company shall be remitted
      by the Reinsurer as promptly as possible after receipt and verification of
      the Company's statement.

C.    Notwithstanding anything stated herein, the liability of the Reinsurer
      under any excess layer of reinsurance coverage provided by this Contract
      shall not exceed either of the following:

      1.    The amount, shown as "Reinsurer's Per Occurrence Limit" for that
            excess layer in Schedule A attached hereto, as respects loss or
            losses arising out of any one loss occurrence; or

      2.    The amount, shown as "Reinsurer's Annual Limit" for that excess
            layer in Schedule A attached hereto, in all during the term of this
            Contract.

ARTICLE VII - DEFINITIONS

A.    "Ultimate net loss" as used herein is defined as the sum or sums
      (including loss in excess of policy limits, extra contractual obligations
      and loss adjustment expense, as hereinafter defined) paid or payable by
      the Company in settlement of claims and in satisfaction of judgments
      rendered on account of such claims, after deduction of all salvage, all
      recoveries and all claims on inuring insurance or reinsurance, whether
      collectible or not. With respect to losses arising out of mycotoxins, mold
      or other fungi (hereinafter together referred to as "mold-related
      losses"), only those mold-related losses directly arising out of loss
      occurrences covered hereunder will be included in ultimate net loss.
      Mold-related losses, in and of themselves, shall not be considered an
      event. Nothing herein shall be construed to mean that losses under this
      Contract are not recoverable until the Company's ultimate net loss has
      been ascertained.

      All salvages and recoveries made or received subsequent to a loss
      settlement under this Contract shall be applied as if recovered or
      received prior to the said settlement, and all necessary adjustments shall
      be made by the parties hereto.

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B.    "Loss in excess of policy limits" and "extra contractual obligations" as
      used herein shall be defined as follows:

      1.    "Loss in excess of policy limits" shall mean 80.0% of any amount
            paid or payable by the Company in excess of its policy limits, but
            otherwise within the terms of its policy and within the terms of
            this Contract, such loss in excess of the Company's policy limits
            having been incurred because of, but not limited to, failure by the
            Company to settle within the policy limits or by reason of the
            Company's alleged or actual negligence, fraud or bad faith in
            rejecting an offer of settlement or in the preparation of the
            defense or in the trial of an action against its insured or in the
            preparation or prosecution of an appeal consequent upon such an
            action. For purposes of this Contract, loss in excess of policy
            limits arising out of any one loss occurrence shall not exceed 25.0%
            of the contractual loss under all policies involved in the loss
            occurrence.

      2.    "Extra contractual obligations" shall mean 80.0% of any punitive,
            exemplary, compensatory or consequential damages paid or payable by
            the Company, not covered by any other provision of this Contract and
            which arise from the handling of any claim on business subject to
            this Contract, such liabilities arising because of, but not limited
            to, failure by the Company to settle within the policy limits or by
            reason of the Company's alleged or actual negligence, fraud or bad
            faith in rejecting an offer of settlement or in the preparation of
            the defense or in the trial of any action against its insured or in
            the preparation or prosecution of an appeal consequent upon such an
            action. For purposes of this Contract, extra contractual obligations
            arising out of any one loss occurrence shall not exceed 25.0% of the
            contractual loss under all policies involved in the loss occurrence.
            An extra contractual obligation shall be deemed, in all
            circumstances, to have occurred on the same date as the loss covered
            or alleged to be covered under the policy.

      Notwithstanding anything stated herein, this Contract shall not apply to
      any loss in excess of policy limits or any extra contractual obligation
      incurred by the Company as a result of any fraudulent and/or criminal act
      by any officer or director of the Company acting individually or
      collectively or in collusion with any individual or corporation or any
      other organization or party involved in the presentation, defense or
      settlement of any claim covered hereunder.

      If any provision of this paragraph B shall be rendered illegal or
      unenforceable by the laws, regulations or public policy of any state, such
      provision shall be considered void in such state, but this shall not
      affect the validity or enforceability of any other provision of this
      Contract or the enforceability of such provision in any other
      jurisdiction.

C.    "Loss adjustment expense" as used herein shall mean expenses assignable to
      the investigation, appraisal, adjustment, settlement, litigation, defense
      and/or appeal of specific claims, regardless of how such expenses are
      classified for statutory reporting purposes. Loss adjustment expense shall
      include, but not be limited to, court costs, costs of supersedeas and
      appeal bonds, prejudgment interest, postjudgment interest, expenses of
      outside adjusters, legal expenses and costs incurred in connection with
      coverage questions and legal actions connected thereto, and a pro rata
      share of salaries and expenses of the

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      Company's field employees and expenses of other employees who have been
      temporarily diverted from their normal and customary duties and assigned
      to the field adjustment of losses covered by this Contract. Loss
      adjustment expense shall not include salaries and expenses of the
      Company's regular employees, except as provided above, or office and
      overhead expenses.

ARTICLE VIII - OTHER REINSURANCE

The Company shall be permitted to carry the following:

      1.    Catastrophe excess of loss, including but not limited to catastrophe
            excess of loss as classified by the Company as index, Original Loss
            Warranty (OLW), swaps, and cat-linked covers;

      2.    Any other underlying reinsurance;

      recoveries under which shall inure solely to the benefit of the Company
      and be entirely disregarded in applying all of the provisions of this
      Contract.

ARTICLE IX - LOSS OCCURRENCE

A.    The term "loss occurrence" shall mean the sum of all individual losses
      directly occasioned by any one disaster, accident or loss or series of
      disasters, accidents or losses arising out of one event which occurs
      within the area of one state of the United States or province of Canada
      and states or provinces contiguous thereto and to one another, and the
      Islands of the Caribbean. However, the duration and extent of any one
      "loss occurrence" shall be limited to all individual losses sustained by
      the Company occurring during any period of 168 consecutive hours arising
      out of and directly occasioned by the same event, except that the term
      "loss occurrence" shall be further defined as follows:

      1.    As regards windstorm, hail, tornado, hurricane, cyclone, including
            ensuing collapse and water damage, all individual losses sustained
            by the Company occurring during any period of 72 consecutive hours
            arising out of and directly occasioned by the same event. However,
            the event need not be limited to one state or province or states or
            provinces contiguous thereto.

      2.    As regards riot, riot attending a strike, civil commotion, vandalism
            and malicious mischief, all individual losses sustained by the
            Company occurring during any period of 72 consecutive hours within
            the area of one municipality or county and the municipalities or
            counties contiguous thereto arising out of and directly occasioned
            by the same event. The maximum duration of 72 consecutive hours may
            be extended in respect of individual losses which occur beyond such
            72 consecutive hours during the continued occupation of an assured's
            premises by strikers, provided such occupation commenced during the
            aforesaid period.

      3.    As regards earthquake (the epicenter of which need not necessarily
            be within the territorial confines referred to in paragraph A of
            this Article) and fire following directly

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            occasioned by the earthquake, only those individual fire losses
            which commence during the period of 168 consecutive hours may be
            included in the Company's "loss occurrence."

      4.    As regards "freeze," only individual losses directly occasioned by
            collapse, breakage of glass and water damage (caused by bursting
            frozen pipes and tanks) may be included in the Company's "loss
            occurrence."

B.    For all "loss occurrences" other than those referred to in subparagraph 2
      of paragraph A above, the Company may choose the date and time when any
      such period of consecutive hours commences, provided that it is not
      earlier than the date and time of the occurrence of the first recorded
      individual loss sustained by the Company arising out of that disaster,
      accident or loss, and provided that only one such period of 168
      consecutive hours shall apply with respect to one event, except for any
      "loss occurrence" referred to in subparagraph 1 of paragraph A above where
      only one such period of 72 consecutive hours shall apply with respect to
      one event.

C.    As respects those "loss occurrences" referred to in subparagraph 2 of
      paragraph A above, the Company may choose the date and time when any such
      period of consecutive hours commences. If the disaster, accident or loss
      occasioned by the event is of greater duration than 72 consecutive hours,
      then the Company may divide that disaster, accident or loss into two or
      more "loss occurrences," provided that no two periods overlap and no
      individual loss is included in more than one such period, and provided
      that no period commences earlier than the date and time of the occurrence
      of the first recorded individual loss sustained by the Company arising out
      of that disaster, accident or loss.

D.    No individual losses occasioned by an event that would be covered by 72
      hours clauses may be included in any "loss occurrence" claimed under the
      168 hours provision.

E.    Losses directly or indirectly occasioned by:

      1.    Loss of, alteration of, or damage to; or

      2.    A reduction in the functionality, availability or operation of;

      a computer system, hardware, program, software, data, information
      repository, microchip, integrated circuit, or similar device in computer
      equipment or non-computer equipment, whether the property of the
      policyholder of the Company or not, do not in and of themselves constitute
      an event unless arising out of one or more of the following perils:

            fire, lightning, explosion, aircraft or vehicle impact, falling
            objects, windstorm, hail, tornado, cyclone, hurricane, earthquake,
            volcano, tsunami, flood, freeze or weight of snow.

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ARTICLE X - LOSS NOTICES AND SETTLEMENTS

A.    Whenever losses sustained by the Company appear likely to result in a
      claim hereunder, the Company shall notify the Reinsurer, and the Reinsurer
      shall have the right to participate in the adjustment of such losses at
      its own expense.

B.    All loss settlements made by the Company, provided they are within the
      terms of this Contract, shall be binding upon the Reinsurer, and the
      Reinsurer agrees to pay all amounts

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      for which it may be liable upon receipt of reasonable evidence of the
      amount paid (or scheduled to be paid) by the Company.

ARTICLE XI - SALVAGE AND SUBROGATION

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such rights.

ARTICLE XII - REINSURANCE PREMIUM

A.    As premium for each excess layer of reinsurance coverage provided by this
      Contract, the Company shall pay the Reinsurer the greater of the
      following:

      1.    The amount, shown as "Annual Minimum Premium" for that excess layer
            in Schedule A attached hereto (or a pro rata portion thereof if the
            term of this Contract is less than 12 months as set forth in Article
            II - Commencement and Termination); or

      2.    The percentage, shown as "Premium Rate" for that excess layer in
            Schedule A attached hereto, of the Company's net earned premium for
            the term of this Contract.

B.    The Company shall pay the Reinsurer an annual deposit premium for each
      excess layer of the amount, shown as "Annual Deposit Premium" for that
      excess layer in Schedule A attached hereto, in four equal installments of
      the amount, shown as "Quarterly Deposit Premium" for that excess layer in
      Schedule A attached hereto, on July 1, 2003, October 1, 2003, January 1,
      2004 and April 1, 2004. However, if this Contract is terminated prior to
      July 1, 2004, no deposit premium installments shall be due after the
      effective date of termination.

C.    As promptly as possible after the effective date of termination or
      expiration of this Contract, the Company shall provide a report to the
      Reinsurer setting forth the premium due hereunder for each excess layer,
      computed in accordance with paragraph A, and any additional premium due
      the Reinsurer or return premium due the Company for each such excess layer
      shall be remitted promptly.

D.    "Net earned premium" as used herein is defined as gross earned premium of
      the Company for the classes of business reinsured hereunder, less the
      earned portion of premiums ceded by the Company for reinsurance which
      inures to the benefit of this Contract.

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ARTICLE XIII - OFFSET (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract. The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.

ARTICLE XIV - ACCESS TO RECORDS

The Reinsurer or its designated representatives shall have access at any
reasonable time, with prior notice to the Company, to all records of the Company
which pertain in any way to this reinsurance.

ARTICLE XV - LIABILITY OF THE REINSURER

A.    The liability of the Reinsurer shall follow that of the Company in every
      case and be subject in all respects to all the general and specific
      stipulations, clauses, waivers and modifications of the Company's policies
      and any endorsements thereon. However, in no event shall this be construed
      in any way to provide coverage outside the terms and conditions set forth
      in this Contract.

B.    Nothing herein shall in any manner create any obligations or establish any
      rights against the Reinsurer in favor of any third party or any persons
      not parties to this Contract.

ARTICLE XVI - NET RETAINED LINES (BRMA 32E)

A.    This Contract applies only to that portion of any policy which the Company
      retains net for its own account (prior to deduction of any underlying
      reinsurance specifically permitted in this Contract), and in calculating
      the amount of any loss hereunder and also in computing the amount or
      amounts in excess of which this Contract attaches, only loss or losses in
      respect of that portion of any policy which the Company retains net for
      its own account shall be included.

B.    The amount of the Reinsurer's liability hereunder in respect of any loss
      or losses shall not be increased by reason of the inability of the Company
      to collect from any other reinsurer(s), whether specific or general, any
      amounts which may have become due from such reinsurer(s), whether such
      inability arises from the insolvency of such other reinsurer(s) or
      otherwise.

ARTICLE XVII - ERRORS AND OMISSIONS (BRMA 14E)

Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission or error had not been made, provided such delay, omission or
error is rectified upon discovery.

Page 11

<PAGE>

ARTICLE XVIII - CURRENCY (BRMA 12A)

A.    Whenever the word "Dollars" or the "$" sign appears in this Contract, they
      shall be construed to mean United States Dollars and all transactions
      under this Contract shall be in United States Dollars.

B.    Amounts paid or received by the Company in any other currency shall be
      converted to United States Dollars at the rate of exchange at the date
      such transaction is entered on the books of the Company.

ARTICLE XIX - TAXES (BRMA 50C)

In consideration of the terms under which this Contract is issued, the Company
will not claim a deduction in respect of the premium hereon when making tax
returns, other than income or profits tax returns, to any state or territory of
the United States of America, the District of Columbia or Canada.

ARTICLE XX - FEDERAL EXCISE TAX (BRMA 17A)

(Applicable to those reinsurers, excepting Underwriters at Lloyd's London and
other reinsurers exempt from Federal Excise Tax, who are domiciled outside the
United States of America.)

A.    The Reinsurer has agreed to allow for the purpose of paying the Federal
      Excise Tax the applicable percentage of the premium payable hereon as
      imposed under Section 4371 of the Internal Revenue Code to the extent such
      premium is subject to the Federal Excise Tax.

B.    In the event of any return of premium becoming due hereunder the Reinsurer
      will deduct the applicable percentage from the return premium payable
      hereon and the Company or its agent should take steps to recover the tax
      from the United States Government.

ARTICLE XXI - RESERVES AND LETTERS OF CREDIT

A.    If the Reinsurer is unauthorized in any state of the United States of
      America or the District of Columbia, or in the event the Reinsurer's A.M.
      Best's rating has been assigned or downgraded below A-, the Reinsurer
      agrees to fund its share of the Company's ceded United States outstanding
      loss and loss adjustment expense reserves (including all case reserves
      plus any reasonable amount estimated to be unreported from known loss
      occurrences) by:

      1.    Clean, irrevocable and unconditional letters of credit issued and
            confirmed, if confirmation is required by the insurance regulatory
            authorities involved, by a bank or banks meeting the NAIC Securities
            Valuation Office credit standards for issuers of letters of credit
            and acceptable to said insurance regulatory authorities; and/or

      2.    Escrow accounts for the benefit of the Company; and/or

Page 12

<PAGE>

      3.    Cash advances;

      The Reinsurer, at its sole option, may fund in other than cash if its
      method and form of funding are acceptable to the Company.

B.    If the Reinsurer is unauthorized in any province or jurisdiction of
      Canada, the Reinsurer agrees to fund 115% of its share of the Company's
      ceded Canadian outstanding loss and loss adjustment expense reserves
      (including all case reserves plus any reasonable amount estimated to be
      unreported from known loss occurrences) by:

      1.    A clean, irrevocable and unconditional letter of credit issued and
            confirmed, if confirmation is required by the insurance regulatory
            authorities involved, by a Canadian bank or banks meeting the NAIC
            Securities Valuation Office credit standards for issuers of letters
            of credit and acceptable to said insurance regulatory authorities,
            for no more than 15/115ths of the total funding required; and/or

      2.    Cash advances for the remaining balance of the funding required;

C.    With regard to funding in whole or in part by letters of credit, it is
      agreed that each letter of credit will be in a form acceptable to the
      Company, will be issued for a term of at least one year and will include
      an "evergreen clause," which automatically extends the term for at least
      one additional year at each expiration date unless written notice of
      non-renewal is given to the Company not less than 30 days prior to said
      expiration date. The Company and the Reinsurer further agree,
      notwithstanding anything to the contrary in this Contract, that said
      letters of credit may be drawn upon by the Company or its successors in
      interest at any time, without diminution because of the insolvency of the
      Company or the Reinsurer, but only for one or more of the following
      purposes:

      1.    To reimburse itself for the Reinsurer's share of losses and/or loss
            adjustment expense paid under the terms of policies reinsured
            hereunder, unless paid in cash by the Reinsurer;

      2.    To reimburse itself for the Reinsurer's share of any other amounts
            which are due hereunder, unless paid in cash by the Reinsurer;

      3.    To fund a cash account in an amount equal to the Reinsurer's share
            of any ceded outstanding loss and loss adjustment expense reserves
            (including all case reserves plus any reasonable amount estimated to
            be unreported from known loss occurrences) funded by means of a
            letter of credit which is under non-renewal notice, if said letter
            of credit has not been renewed or replaced by the Reinsurer 10 days
            prior to its expiration date;

      4.    To refund to the Reinsurer any sum in excess of the actual amount
            required to fund the Reinsurer's share of the Company's ceded
            outstanding loss and loss adjustment expense reserves (including all
            case reserves plus any reasonable amount estimated to be unreported
            from known loss occurrences), if so requested by the Reinsurer.

      In the event the amount drawn by the Company on any letter of credit is in
      excess of the actual amount required for C(1) or C(3), or in the case of
      C(2), the actual amount

Page 13

<PAGE>

      determined to be due, the Company shall promptly return to the Reinsurer
      the excess amount so drawn.

ARTICLE XXII - INSOLVENCY

A.    In the event of the insolvency of one or more of the reinsured companies,
      this reinsurance shall be payable directly to the company, or to its
      liquidator, receiver, conservator or statutory successor on the basis of
      the liability of the company without diminution because of the insolvency
      of the company or because the liquidator, receiver, conservator or
      statutory successor of the company has failed to pay all or a portion of
      any claim. It is agreed, however, that the liquidator, receiver,
      conservator or statutory successor of the company shall give written
      notice to the Reinsurer of the pendency of a claim against the company
      indicating the policy insured which claim would involve a possible
      liability on the part of the Reinsurer within a reasonable time after such
      claim is filed in the conservation or liquidation proceeding or in the
      receivership, and that during the pendency of such claim, the Reinsurer
      may investigate such claim and interpose, at its own expense, in the
      proceeding where such claim is to be adjudicated, any defense or defenses
      that it may deem available to the company or its liquidator, receiver,
      conservator or statutory successor. The expense thus incurred by the
      Reinsurer shall be chargeable, subject to the approval of the court,
      against the company as part of the expense of conservation or 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 Reinsurer.

B.    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 this Contract as though such
      expense had been incurred by the insolvent company.

ARTICLE XXIII - ARBITRATION

A.    As a condition precedent to any right of action hereunder, in the event of
      any dispute or difference of opinion hereafter arising with respect to
      this Contract, it is hereby mutually agreed that such dispute or
      difference of opinion shall be submitted to arbitration. One Arbiter shall
      be chosen by the Company, the other by the Reinsurer, and an Umpire shall
      be chosen by the two Arbiters before they enter upon arbitration, all of
      whom shall be active or retired disinterested executive officers of
      insurance or reinsurance companies or Lloyd's London Underwriters. In the
      event that either party should fail to choose an Arbiter within 30 days
      following a written request by the other party to do so, the requesting
      party may choose two Arbiters who shall in turn choose an Umpire before
      entering upon arbitration. If the two Arbiters fail to agree upon the
      selection of an Umpire within 30 days following their appointment, the two
      Arbiters shall request the American Arbitration Association to appoint the
      Umpire. If the American Arbitration Association fails to appoint the
      Umpire within 30 days after it has been requested to do so, either party
      may request a justice of a Court of general jurisdiction of the state in
      which the arbitration is to be held to appoint the Umpire.

B.    Each party shall present its case to the Arbiters within 30 days following
      the date of appointment of the Umpire. The Arbiters shall consider this
      Contract as an honorable

Page 14

<PAGE>

      engagement rather than merely as a legal obligation and they are relieved
      of all judicial formalities and may abstain from following the strict
      rules of law. The decision of the Arbiters shall be final and binding on
      both parties; but failing to agree, they shall call in the Umpire and the
      decision of the majority shall be final and binding upon both parties.
      Judgment upon the final decision of the Arbiters may be entered in any
      court of competent jurisdiction.

C.    If more than one reinsurer is involved in the same dispute, all such
      reinsurers shall constitute and act as one party for purposes of this
      Article and communications shall be made by the Company to each of the
      reinsurers constituting one party, provided, however, that nothing herein
      shall impair the rights of such reinsurers to assert several, rather than
      joint, defenses or claims, nor be construed as changing the liability of
      the reinsurers participating under the terms of this Contract from several
      to joint.

D.    Each party shall bear the expense of its own Arbiter, and shall jointly
      and equally bear with the other the expense of the Umpire and of the
      arbitration. In the event that the two Arbiters are chosen by one party,
      as above provided, the expense of the Arbiters, the Umpire and the
      arbitration shall be equally divided between the two parties.

E.    Any arbitration proceedings shall take place at a location mutually agreed
      upon by the parties to this Contract, but notwithstanding the location of
      the arbitration, all proceedings pursuant hereto shall be governed by the
      law of the State of New York.

ARTICLE XXIV - SERVICE OF SUIT (BRMA 49C)

(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities)

A.    It is agreed that in the event the Reinsurer fails to pay any amount
      claimed to be due hereunder, the Reinsurer, at the request of the Company,
      will submit to the jurisdiction of a court of competent jurisdiction
      within the United States. Nothing in this Article constitutes or should be
      understood to constitute a waiver of the Reinsurer's rights to commence an
      action in any court of competent jurisdiction in the United States, to
      remove an action to a United States District Court, or to seek a transfer
      of a case to another court as permitted by the laws of the United States
      or of any state in the United States.

B.    Further, pursuant to any statute of any state, territory or district of
      the United States which makes provision therefor, the Reinsurer hereby
      designates the party named in its Interests and Liabilities Agreement, or
      if no party is named therein, the Superintendent, Commissioner or Director
      of Insurance or other officer specified for that purpose in the statute,
      or his successor or successors in office, as its true and lawful attorney
      upon whom may be served any lawful process in any action, suit or
      proceeding instituted by or on behalf of the Company or any beneficiary
      hereunder arising out of this Contract.

Page 15

<PAGE>

ARTICLE XXV - ENTIRE AGREEMENT

This written Contract constitutes the entire agreement between the parties
hereto with respect to the business being reinsured hereunder, and there are no
understandings between the parties hereto other than as expressed in this
Contract. Any change or modification to this Contract will be made by amendment
to this Contract and signed by the parties.

ARTICLE XXVI - AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, Glencoe
Insurance Ltd. shall be deemed the agent of the other reinsured companies for
purposes of sending or receiving notices required by the terms and conditions of
this Contract, and for purposes of remitting or receiving any monies due any
party.

ARTICLE XXVII - INTERMEDIARY (BRMA 23A)

Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract
for all business hereunder. All communications (including but not limited to
notices, statements, premium, return premium, commissions, taxes, losses, loss
adjustment expense, salvages and loss settlements) relating thereto shall be
transmitted to the Company or the Reinsurer through Benfield Inc., 3600 West
80th Street, Minneapolis, Minnesota 55431. Payments by the Company to the
Intermediary shall be deemed to constitute payment to the Reinsurer. Payments by
the Reinsurer to the Intermediary shall be deemed to constitute payment to the
Company only to the extent that such payments are actually received by the
Company.

IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Contract as of the date undermentioned at:

Hamilton, Bermuda, this 18th day of September in the year 2003.

                     /s/ William J. Ashley
                     ---------------------
                     Glencoe Insurance Ltd. (for and on behalf of the "Company")

Page 16

<PAGE>

                                   SCHEDULE A

                       PROPERTY CATASTROPHE EXCESS OF LOSS
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2003

                                    issued to

                           Glencoe Group of Companies
                     and its Quota Share Reinsurers, if any
                                    including
                             Glencoe Insurance Ltd.
                                Hamilton, Bermuda
                          Stonington Insurance Company
                                  Dallas, Texas
                       Stonington Lloyds Insurance Company
                                  Dallas, Texas
                                       and
                             Lantana Insurance Ltd.
                                Hamilton, Bermuda

<TABLE>
<CAPTION>
                                       FIRST          SECOND           THIRD          FOURTH
                                      EXCESS          EXCESS          EXCESS          EXCESS
                                   ------------    ------------    ------------    ------------
<S>                                <C>             <C>             <C>             <C>
Company's Retention                $ 35,000,000    $ 50,000,000    $ 75,000,000    $100,000,000

Reinsurer's Per Occurrence Limit   $ 15,000,000    $ 25,000,000    $ 25,000,000    $ 50,000,000

Reinsurer's Annual Limit           $ 30,000,000    $ 50,000,000    $ 50,000,000    $100,000,000

Annual Minimum Premium             $  3,600,000    $  4,800,000    $  3,800,000    $  6,000,000

Premium Rate                                1.8%            2.4%            1.9%            3.0%

Annual Deposit Premium             $  4,500,000    $  6,000,000    $  4,750,000    $  7,500,000

Quarterly Deposit Premium          $  1,125,000    $  1,500,000    $  1,187,500    $  1,875,000
</TABLE>

The figures listed above for each excess layer shall apply to each Subscribing
Reinsurer in the percentage share for that excess layer as expressed in its
Interests and Liabilities Agreement attached hereto.

<PAGE>

                POOLS, ASSOCIATIONS & SYNDICATES EXCLUSION CLAUSE

SECTION A:

Excluding:

      (a)   All business derived directly or indirectly from any Pool,
            Association or Syndicate which maintains its own reinsurance
            facilities.

      (b)   Any Pool or Scheme (whether voluntary or mandatory) formed after
            March 1, 1968 for the purpose of insuring property whether on a
            country-wide basis or in respect of designated areas. This exclusion
            shall not apply to so-called Automobile Insurance Plans or other
            Pools formed to provide coverage for Automobile Physical Damage.

SECTION B:

      It is agreed that business written by the Company for the same perils,
which is known at the time to be insured by, or in excess of underlying amounts
placed in the following Pools, Associations or Syndicates, whether by way of
insurance or reinsurance, is excluded hereunder:

      Any Pool, Association or Syndicate formed for the purpose of writing
        Oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs,
      United States Aircraft Insurance Group,
      Canadian Aircraft Insurance Group,
      Associated Aviation Underwriters,
      American Aviation Underwriters.

Section B does not apply:

      (a)   Where The Total Insured Value over all interests of the risk in
            question is less than $300,000,000.

      (b)   To interests traditionally underwritten as Inland Marine or stock
            and/or contents written on a blanket basis.

      (c)   To Contingent Business Interruption, except when the Company is
            aware that the key location is known at the time to be insured in
            any Pool, Association or Syndicate named above, other than as
            provided for under Section B(a).

      (d)   To risks as follows:

            Offices, Hotels, Apartments, Hospitals, Educational Establishments,
            Public Utilities (other than railroad schedules) and builder's risks
            on the classes of risks specified in this subsection (d) only.

Page 1 of 3

<PAGE>

            Where this clause attaches to Catastrophe Excesses, the following
            Section C and D are added:

SECTION C:

      Nevertheless the Reinsurer specifically agrees that liability accruing to
the Company from its participation in residual market mechanisms including but
not limited to:

      (1)   The following so-called "Coastal Pools":

            Alabama Insurance Underwriting Association
            Louisiana Insurance Underwriting Association
            Mississippi Windstorm Underwriting Association
            North Carolina Insurance Underwriting Association
            South Carolina Windstorm and Hail Underwriting Association
            Texas Windstorm Insurance Association

AND

      (2)   All "Fair Plan" and "Rural Risk Plan" business

AND

      (3)   The California Earthquake Authority ("CEA")

for all perils otherwise protected hereunder shall not be excluded, except,
however, that this reinsurance does not include any increase in such liability
resulting from:

      (i)   The inability of any other participant in such "Coastal Pool" and/or
            "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market
            Mechanisms to meet its liability.

      (ii)  Any claim against such "Coastal Pool" and/or "Fair Plan" and/or
            "Rural Risk Plan" and/or Residual Market Mechanisms, or any
            participant therein, including the Company, whether by way of
            subrogation or otherwise, brought by or on behalf of any insolvency
            fund (as defined in the Insolvency Fund Exclusion Clause
            incorporated in this Contract).

SECTION D:

      (1)   Notwithstanding Section C above, in respect of the CEA, where an
            assessment is made against the Company by the CEA, the Company may
            include in its Ultimate Net Loss only that assessment directly
            attributable to each separate loss occurrence covered hereunder. The
            Company's initial capital contribution to the CEA shall not be
            included in the Ultimate Net Loss.

      (2)   Notwithstanding Section C above, in respect of any residual market
            mechanism, where an assessment is made against the Company by such
            residual market mechanism, or any combination thereof, the maximum
            loss that the Company may include in the Ultimate Net

Page 2 of 3

<PAGE>

       Loss in respect of any loss occurrence hereunder shall not exceed the
       lesser of:

       (a)   The Company's assessment from the relevant entity for the
             accounting year in which the loss occurrence commenced, or

       (b)   The product of the following:

             (i)   The Company's percentage participation in the relevant entity
                   for the accounting year in which the loss occurrence
                   commenced; and

             (ii)  The relevant entity's total losses in such loss occurrence.

             Any assessments for accounting years subsequent to that in which
             the loss occurrence commenced may not be included in the Ultimate
             Net Loss hereunder. Moreover, notwithstanding Section C above, in
             respect of any residual market mechanism, the Ultimate Net Loss
             hereunder shall not include any monies expended to purchase or
             retire bonds as a consequence of being a member of such residual
             market mechanism. For the purposes of this Contract, the Company
             may not include in the Ultimate Net Loss any assessment or any
             percentage assessment levied by any residual market mechanism to
             meet the obligations of an insolvent insurer member or other party,
             or to meet any obligations arising from the deferment by any
             residual market mechanism of the collection of monies.

NOTES: Wherever used herein the terms:

        "Company"       shall be understood to mean "Company," "Reinsured,"
                        "Reassured" or whatever other term is used in the
                        attached reinsurance document to designate the reinsured
                        company or companies.

        "Agreement"     shall be understood to mean "Agreement," "Contract,"
                        "Policy" or whatever other term is used to designate the
                        attached reinsurance document.

        "Reinsurers"    shall be understood to mean "Reinsurers," "Underwriters"
                        or whatever other term is used in the attached
                        reinsurance document to designate the reinsurer or
                        reinsurers.

Page 3 of 3

<PAGE>

   NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE (U.S.A.)

1.    This Reinsurance does not cover any loss or liability accruing to the
      Reassured, directly or indirectly and whether as Insurer or Reinsurer,
      from any Pool of Insurers or Reinsurers formed for the purpose of covering
      Atomic or Nuclear Energy risks.

2.    Without in any way restricting the operation of paragraph (1) of this
      Clause, this Reinsurance does not cover any loss or liability accruing to
      the Reassured, directly or indirectly and whether as Insurer or Reinsurer,
      from any insurance against Physical Damage (including business
      interruption or consequential loss arising out of such Physical Damage)
      to:

      I.    Nuclear reactor power plants including all auxiliary property on the
            site, or

      II.   Any other nuclear reactor installation, including laboratories
            handling radioactive materials in connection with reactor
            installations, and "critical facilities" as such, or

      III.  Installations for fabricating complete fuel elements or for
            processing substantial quantities of "special nuclear material," and
            for reprocessing, salvaging, chemically separating, storing or
            disposing of "spent" nuclear fuel or waste materials, or

      IV.   Installations other than those listed in paragraph (2) III above
            using substantial quantities of radioactive isotopes or other
            products of nuclear fission.

3.    Without in any way restricting the operations of paragraphs (1) and (2)
      hereof, this Reinsurance does not cover any loss or liability by
      radioactive contamination accruing to the Reassured, directly or
      indirectly, and whether as Insurer or Reinsurer, from any insurance on
      property which is on the same site as a nuclear reactor power plant or
      other nuclear installation and which normally would be insured therewith
      except that this paragraph (3) shall not operate

      (a)   where Reassured does not have knowledge of such nuclear reactor
            power plant or nuclear installation, or

      (b)   where said insurance contains a provision excluding coverage for
            damage to property caused by or resulting from radioactive
            contamination, however caused. However on and after 1st January 1960
            this sub-paragraph (b) shall only apply provided the said
            radioactive contamination exclusion provision has been approved by
            the Governmental Authority having jurisdiction thereof.

4.    Without in any way restricting the operations of paragraphs (1), (2) and
      (3) hereof, this Reinsurance does not cover any loss or liability by
      radioactive contamination accruing to the Reassured, directly or
      indirectly, and whether as Insurer or Reinsurer, when such radioactive
      contamination is a named hazard specifically insured against.

5.    It is understood and agreed that this Clause shall not extend to risks
      using radioactive isotopes in any form where the nuclear exposure is not
      considered by the Reassured to be the primary hazard.

6.    The term "special nuclear material" shall have the meaning given it in the
      Atomic Energy Act of 1954 or by any law amendatory thereof.

7.    Reassured to be sole judge of what constitutes:

      (a)   substantial quantities, and

      (b)   the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it
is understood and agreed that

      (a)   all policies issued by the Reassured on or before 31st December 1957
            shall be free from the application of the other provisions of this
            Clause until expiry date or 31st December 1960 whichever first
            occurs whereupon all the provisions of this Clause shall apply.

      (b)   with respect to any risk located in Canada policies issued by the
            Reassured on or before 31st December 1958 shall be free from the
            application of the other provisions of this Clause until expiry date
            or 31st December 1960 whichever first occurs whereupon all the
            provisions of this Clause shall apply.

12/12/57
N.M.A. 1119
BRMA 35B

<PAGE>

   NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE (CANADA)

1.    This Agreement does not cover any loss or liability accruing to the
      Reinsured, directly or indirectly, and whether as Insurer or Reinsurer,
      from any Pool of Insurers or Reinsurers formed for the purpose of covering
      Atomic or Nuclear Energy risks.

2.    Without in any way restricting the operation of paragraph 1 of this
      clause, this Agreement does not cover any loss or liability accruing to
      the Reinsured, directly or indirectly, and whether as Insurer or
      Reinsurer, from any insurance against Physical Damage (including business
      interruption or consequential loss arising out of such Physical Damage)
      to:

      (a)   nuclear reactor power plants including all auxiliary property on the
            site, or

      (b)   any other nuclear reactor installation, including laboratories
            handling radioactive materials in connection with reactor
            installations, and critical facilities as such, or

      (c)   installations for fabricating complete fuel elements or for
            processing substantial quantities of prescribed substances, and for
            reprocessing, salvaging, chemically separating, storing or disposing
            of spent nuclear fuel or waste materials, or

      (d)   installations other than those listed in (c) above using substantial
            quantities of radioactive isotopes or other products of nuclear
            fission.

3.    Without in any way restricting the operation of paragraphs 1 and 2 of this
      clause, this Agreement does not cover any loss or liability by radioactive
      contamination accruing to the Reinsured, directly or indirectly, and
      whether as Insurer or Reinsurer, from any insurance on property which is
      on the same site as a nuclear reactor power plant or other nuclear
      installation and which normally would be insured therewith, except that
      this paragraph 3 shall not operate:

      (a)   where the Reinsured does not have knowledge of such nuclear reactor
            power plant or nuclear installation, or

      (b)   where the said insurance contains a provision excluding coverage for
            damage to property caused by or resulting from radioactive
            contamination, however caused.

4.    Without in any way restricting the operation of paragraphs 1, 2 and 3 of
      this clause, this Agreement does not cover any loss or liability by
      radioactive contamination accruing to the Reinsured, directly or
      indirectly, and whether as Insurer or Reinsurer, when such radioactive
      contamination is a named hazard specifically insured against.

5.    This clause shall not extend to risks using radioactive isotopes in any
      form where the nuclear exposure is not considered by the Reinsured to be
      the primary hazard.

6.    The term "prescribed substances" shall have the meaning given to it by the
      Atomic Energy Control Act R.S.C. 1985(c), A-16 or by any law amendatory
      thereof.

7.    Reinsured to be sole judge of what constitutes:

      (a)   substantial quantities, and

      (b)   the extent of installation, plant or site.

8.    Without in any way restricting the operation of paragraphs 1, 2, 3 and 4
      of this clause, this Agreement does not cover any loss or liability
      accruing to the Reinsured, directly or indirectly, and whether as Insurer
      or Reinsurer, caused:

      (1)   by any nuclear incident, as defined in the Nuclear Liability Act or
            any other nuclear liability act, law or statute, or any law
            amendatory thereof or nuclear explosion, except for ensuing loss or
            damage which results directly from fire, lightning or explosion of
            natural, coal or manufactured gas;

      (2)   by contamination by radioactive material.

NOTE: Without in any way restricting the operation of paragraphs 1, 2, 3 and 4
      of this clause, paragraph 8 of this clause shall only apply to all
      original contracts of the Reinsured, whether new, renewal or replacement,
      which become effective on or after December 31, 1992.

N.M.A. 1980 (2/19/93)