EXHIBIT 10.7

                              NORWOOD H. DAVIS, JR.

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

                    (As amended and restated January 2, 1998)

                  This Agreement is made as of the 2nd day of January, 1998,
between TRIGON INSURANCE COMPANY, a Virginia corporation (the "Company"), and
NORWOOD H. DAVIS, JR., of Richmond, Virginia ("Executive").

                                    RECITALS

                  Executive has been employed by the Company or its affiliates
since April 1, 1968. Since April 1, 1981, Executive has served as Chief
Executive Officer of the Company or of its affiliate, Consolidated Healthcare,
Inc. The Company and Executive are parties to an agreement dated March 13, 1996
(the "Prior Agreement"). The parties desire to amend and restate the Prior
Agreement in the manner herein set forth.

                  NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, the parties agree as follows:

                                    ARTICLE I

                                   EMPLOYMENT

                  1.1 Employment. The Company hereby employs Executive as
Chairman of the Board and Chief Executive Officer of the Company. Executive
shall have the powers, duties, and responsibilities that are customary to the
position of Chief Executive Officer and shall preside at all meetings of the
Board of Directors of the Company. Subject to approval by the Board, Executive
shall select the officers of the Company and each of its affiliates. Executive
shall devote his full business time and efforts to the business and affairs of
the Company and its affiliates; provided, however, that this provision shall not
preclude Executive from serving as a director of any other corporation or other

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organization involving no conflict of interest with the interests of the
Company. All such directorships shall be disclosed to and reviewed by the
Executive Committee of the Company.

                  1.2 At Will Employment. Executive's employment hereunder is at
will. Executive may resign at any time and the Company may discharge Executive
at any time, with or without cause.

                                   ARTICLE II

                            COMPENSATION AND BENEFITS

                  2.1 Base Salary Executive's base salary for 1998 has been
determined by the Board of Directors upon recommendation from the Chair of the
Human Resources Committee.

                  2.2 Incentive  Compensation.  Executive  shall also be
eligible  for an award of  incentive compensation each year.

                  2.3 Annual Reviews. Effective each January 1 during the term
of this Agreement, the Chairmen of the Executive and Human Resources,
Compensation and Employee Benefits Committees will review Executive's
performance as Chief Executive Officer and will recommend to the Board (i) such
annual increase in base salary as may be appropriate and in accordance with the
Company's regular salary administration program and (ii) such award of incentive
compensation for the prior year as may be appropriate. The Board will determine
such annual increase in base salary and such award of incentive compensation.

                  2.4 Participation in Employee Benefit Plans. While employed by
the Company, Executive shall be entitled to participate in the Company's
Non-Contributory Retirement Program, the Employees' Thrift Plan, the
split-dollar life insurance program, the group health insurance program, the
group term life insurance program, and the disability insurance program. In
addition, the Company shall provide to Executive an automobile and gasoline
allowance, tax and financial planning services, and reimbursement for club dues
and other business expenses.

                                   ARTICLE III

                                   DISABILITY

                  3.1 Supplemental Disability Payment. If Executive becomes
disabled while employed by the Company and is entitled to receive benefits under
the Company's Long-Term Disability Program, then the Company will pay to
Executive a Monthly Supplemental Disability Benefit (as hereinafter defined) for
so long as Executive is entitled to receive disability payments under the

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Company's Long-Term Disability Program (or under any similar disability program
maintained by the Company). The amount of the Monthly Supplemental Disability
Benefit shall be equal to the difference between (i) one-twelfth (1/12) of sixty
percent (60%) of Executive's annual base salary for the year in which Executive
becomes disabled and (ii) the amount of the monthly disability benefit payable
to Executive under the Company's Long-Term Disability Program.

                                   ARTICLE IV

                 SEVERANCE PAYMENT AND EMPLOYMENT BENEFIT TRUST

                  4.1      Severance Payment.

                           (a) Upon a Termination  Event, as defined in Section
4.1(b) below,  the Company will pay the Severance Payment, as defined in Section
4.1(c) below, to Executive.

                           (b) The term Termination Event shall mean the
following: (i) the termination of Executive's employment with the Company for
any reason other than by reason of Executive's resignation; and (ii) the
termination of Executive's employment with the Company by reason of Executive's
resignation but only if Executive shall have given the Company at least six (6)
months prior written notice of such resignation. The term Termination Event
shall not include the termination of Executive's employment with the Company by
reason of Executive's resignation if Executive shall not have given the Company
at least six (6) months prior written notice of such resignation.

                           (c) The term Severance Payment shall mean a payment
equal to four times the Annual Compensation of Executive as defined in Section
4.1(d) below.

                           (d) The term Annual Compensation of Executive shall
mean the highest amount of cash compensation (including, without limitation,
salary and bonus) earned by Executive with respect to one of the three calendar
years immediately preceding the Termination Event. The Annual Compensation of
Executive for a calendar year shall include (i) Executive's annual base salary
for the calendar year in question, without any reduction for any amounts that
Executive may have deferred under the Company's 401(k) Plan, 401(k) Restoration
Plan, Deferred Benefit Plan for Officers, or otherwise, and (ii) any cash bonus
or incentive payments (annual and long term) that are earned for a period of
performance ending in the calendar year in question, but which are paid after
the calendar year in question.

                  4.2 Establishment  of Employment  Benefit Trust.  The Company
has  established an Employment Benefit Trust (the "Trust") for the benefit of
Executive and other key executives of the

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Company. The form of Trust Agreement is attached as Exhibit A. In order to
provide benefits to Executive, the Company has transferred to the Trust the
assets and amounts specified in paragraph 4.3 and has instructed the trustee of
the Trust to maintain such assets and amounts in a separate account for the
benefit of Executive (the "Account").

                  4.3      Assets and Amounts Transferred to the Trust.

                           (a) Prior to the  execution  of the Prior  Agreement,
the  Company  transferred  to the Trust all of the assets held in the account
established for Executive under the Agreement between the Company and Executive
dated December 12, 1990, and certain additional amounts that were authorized by
the Board of Directors on December 9, 1992, and were transferred to the Trust on
or about June 22, 1993.

                           (b) The strategy of the Company is to expand by
acquiring, merging, or affiliating with other Blue Cross and Blue Shield plans,
insurance companies, and managed care companies. If the Executive Committee or
the Board of Directors determines that Executive's duties have expanded because
of such acquisitions, mergers or affiliations or for other reasons, then the
Executive Committee or the Board of Directors may make additional contributions
to the Trust in recognition of such expanded duties.

                  4.4 Investment of Amounts Transferred to the Trust. The
Company shall from time to time appoint an investment manager (the "Investment
Manager") to invest and manage the assets of the Trust. The initial Investment
Manager will be James W. Copley, Jr., President, Consolidated Investment
Corporation. The Company, acting through the Investment Manager, shall have sole
discretion to select investments for the Trust. Annually, the Investment Manager
will report the investments made in the Trust to the Chairman of the Executive
Committee and will confer with him about the investment policy for the Trust.
Executive shall have no right to have any particular investment made in the
Trust. The Company shall bear all risk of gain or loss with respect to the
investments made in the Trust. Such gains or losses shall not affect the amount
of the Severance Payment.

                  4.5 Fees, Expenses, and Taxes. The Company shall pay the fees
and expenses of the Investment Manager for its services and the fees and
expenses of the trustee of the Trust for its services. All fees, commissions,
and expenses resulting from transactions made in the Trust shall be paid from
assets held in the Trust to the extent such assets are available, but if such
assets are insufficient to pay

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such sums, such sums shall be paid by the Company from its other funds. Income
taxes incurred by the Company as the result of transactions made in the Trust
shall be paid by the Company and shall not be charged to the Trust.

                  4.6 Distribution of the Assets in the Trust.

                           (a) Upon the happening of a Termination  Event,  the
trustee of the Trust may either (i) transfer assets held in the Trust for
Executive's Benefit to Executive in kind to the extent of the Severance Payment;
or (ii) sell all or any part of such assets and distribute the sales proceeds to
Executive to the extent of the Severance Payment. If any asset distributed to
Executive in kind does not have a readily ascertainable fair market value, the
Company may at its expense have such asset appraised by an independent
appraiser, and the Company and Executive agree to be bound by such appraisal for
all purposes under this Agreement (including federal and state income tax
filings). To the extent the value of such assets transferred to Executive in
kind or such proceeds distributed to Executive (as the case may be) is
insufficient to fund the Severance Payment, the Company shall pay the balance of
the Severance Payment to Executive in immediately available funds. To the extent
that the value of such assets or such proceeds distributed to Executive or such
proceeds (as the case may be) exceeds the Severance Payment, such assets or such
proceeds (as the case may be) shall be distributed to the Company. If the
Termination Event is the result of the death of Executive, then the distribution
under this paragraph shall be made to Executive's personal representative.

                           (b) In consideration of the Severance Payment to
Executive, Executive agrees that he will not, prior to the expiration of four
(4) years following the termination of his employment, become an officer,
director, or employee of, or consultant to, or 10% or more owner of, any entity
that competes with the Company in any business in which the Company is engaged
as of the date of the termination of Executive's employment; provided, however,
that if the Company terminates Executive's employment without cause, then this
covenant not to compete shall not be applicable. For purposes of this Agreement,
termination without cause means termination for any reason other than continued
neglect by Executive of his duties hereunder or willful misconduct by Executive
in the performance of his duties hereunder. Executive agrees that in the event
of a breach by Executive of this covenant not to compete, the Company's remedies
at law will be inadequate and that the Company will be entitled to appropriate
equitable relief, including an injunction restraining such breach. If Executive
so requests, the Executive Committee is authorized to determine, by written
communication to Executive, that a

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particular activity that Executive proposes to engage in does not constitute
competition with the Company within the meaning of this paragraph and such
determination shall be conclusive and binding on the parties to this Agreement.

                  4.7 Beneficial Ownership. Unless and until the assets held in
the Account are distributed to Executive pursuant to Section 4.6(a) of this
Agreement, beneficial ownership of all assets in the Account shall remain with
the Company, and Executive shall have no property interest in any such assets.

                                    ARTICLE V

                 RETIREMENT AND SUPPLEMENTAL RETIREMENT BENEFITS

                  5.1 Normal Retirement. If Executive's employment with the
Company has not sooner terminated, then he shall retire as of the end of the
month in which he attains the age of 61 (that is to say, on March 31, 2001).

                  5.2 Early Retirement. Executive may at his option elect early
retirement effective as of the end of any month following the date on which he
attains the age of 56 (that is to say, beginning March 31, 1996) by giving the
Company written notice of such election at least one hundred twenty (120) days
before the effective date of such retirement.

                  5.3 Participation in Existing Retirement Programs. Executive
is a participant in the Company's Non-Contributory Retirement Program (herein
referred to as the "Retirement Program") and in the Company's Supplemental
Retirement Program for Certain Employees (herein referred to as the
"Supplemental Retirement Program").

                  5.4 Enhanced Supplemental Retirement Benefit at Normal
Retirement. If Executive's continuous employment with the Company continues
until March 10, 2001, then in addition to the benefit that Executive receives
under the Supplemental Retirement Program, the Company shall pay to Executive a
nonqualified unfunded supplemental retirement benefit (the "Enhanced
Supplemental Retirement Benefit") in the amount described below. The amount of
the Enhanced Supplemental Retirement Benefit shall be equal to the difference
between (i) the retirement benefit that Executive would have received under the
Retirement Program if (a) earnings used in computing benefits under the
Retirement Program included nonqualified deferred compensation in the year in
which the amounts were deferred, (b) the limitations of Sections 401(a)(17) and
415 of the Internal Revenue Code did not apply to the calculation and amount of
such benefit, (c) Executive had remained in the employ of the Company

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and received credited service until March 31, 2005, and (d) Executive had
received earnings from the Company from the date of termination of employment
until March 31, 2005 at an annual rate equal to the Annual Compensation of
Executive as defined in Section 4.1(d) above, and (ii) the sum of the retirement
benefits that Executive actually receives under the Retirement Program and under
the Supplemental Retirement Program.

                  5.5 Reduced Enhanced Supplemental Retirement Benefit at Early
Retirement. If Executive's continuous employment with the Company terminates at
any time on or after March 10, 1996 but before March 10, 2001, then the Company
shall pay Executive that percentage of the Enhanced Supplemental Retirement
Benefit reflected in the following schedule:

                                                    Percentage of
                                                Enhanced Supplemental
       Retirement Date                            Retirement Benefit

March 10, 1996 - March 9, 1997                           80%
March 10, 1997 - March 9, 1998                           84%
March 10, 1998 - March 9, 1999                           88%
March 10, 1999 - March 9, 2000                           92%
March 10, 2000 - March 9, 2001                           96%
March 10, 2001 - or thereafter                          100%

                  5.6 Calculation and Payment of Enhanced Supplemental
Retirement Benefits. The enhanced supplemental retirement benefits payable to
Executive pursuant to Sections 5.4 and 5.5 of this Agreement shall be calculated
and paid to Executive at the same time and in the same manner that benefits are
calculated and paid to Executive under the Supplemental Retirement Program.

                  5.7 Other Retirement Benefits. If Executive retires from the
Company, then irrespective of when such retirement occurs, Executive shall be
entitled to all retirement benefits that are made generally available to retired
executive officers of the Company, including health care coverage and group term
life insurance benefits.

                                   ARTICLE VI

                                  MISCELLANEOUS

                  6.1 Termination of Prior Agreements. This Agreement supersedes
all prior agreements respecting the subject matter of Executive's employment,
written or oral; provided, however, that nothing herein shall affect the Salary
Deferral Agreement between the Company and Executive dated December 13, 1989.

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                  6.2 Notices. Any notice required or permitted hereunder shall
be in writing and shall be deemed given if delivered personally or mailed,
registered or certified mail, as follows:

                           (a)      If to the Company, to:
                                    Chairman of the Executive Committee
                                    Trigon Insurance Company
                                    2015 Staples Mill Road
                                    Post Office Box 27401
                                    Richmond, Virginia  23279

                           (b) If to Executive, to his last address shown on the
                  records of the Company.

                  6.3 Successors. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs,
representatives, and successors, including, without limitation, any person
acquiring directly or indirectly all or substantially all of the assets of the
Company, whether by merger, consolidation, sale, or otherwise, but neither this
Agreement nor any right hereunder may be otherwise assigned or transferred by
either party hereto.

                  6.4 Applicable  Law.  This  Agreement  shall be governed by
and  construed  and  enforced in accordance with the laws of Virginia.

                  6.5 Amendment.  This  Agreement  may be amended only by a
written  instrument  signed by the parties hereto.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.

                                          TRIGON INSURANCE COMPANY

                                      By: ______________________________________
                                          Jackie M. Ward, Chairperson
                                          Human Resources, Compensation and
                                          Employee Benefits Committee

                                          --------------------------------------
                                               Norwood H. Davis, Jr.

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