INTERNATIONAL PROPERTY CATASTROPHE REINSURANCE COMPANY, LTD.

                                       AND

                   AIG GLOBAL INVESTMENT CORP. (IRELAND) LTD.








                         INVESTMENT MANAGEMENT AGREEMENT





























<PAGE>

                         INVESTMENT MANAGEMENT AGREEMENT


THIS AGREEMENT is made on the 23rd day of June, 1997

BETWEEN:

(1)   INTERNATIONAL PROPERTY CATASTROPHE REINSURANCE COMPANY, LTD., having its 
      registered office at 29 Richmond Road, Pembroke, Bermuda, HM08, (the
      "Client") of the one part; and

(2)   AIG GLOBAL INVESTMENT CORP. (IRELAND) LTD., having its registered office 
      at AIG House, Merrion Road, Dublin 4, Ireland (the "Company") of the other
      part.

WHEREAS:

      The Client wishes to obtain investment management services in respect of
      certain assets and the Company is willing to provide such services subject
      to the terms and conditions set out in this Agreement, which Agreement
      both parties wish to supersede any prior Investment Management Agreement
      and any amendments thereto entered into between the parties hereto.

IT IS HEREBY AGREED by and between the parties hereto as follows:

1.    From and after the date hereof, this Agreement shall supersede any prior
      Investment Management Agreement and any amendments thereto entered into
      between the parties hereto.

2.    APPOINTMENT

2.1.  The Client hereby appoints the Company, and the Company hereby accepts the
      appointment, as investment manager for the Client of such cash, securities
      or other property as shall from time to time be comprised in the portfolio
      described in the Schedule hereto (the "Portfolio"). The Portfolio shall be
      held in the custody of a custodian agreeable to the Company, which shall
      be the custodian named in Schedule I hereto (the "Custodian") or such
      other custodian as the parties shall agree in writing (the "Additional
      Custodian").

2.2.  Any cash, securities or other property transferred to the Custodian by the
      Client shall in the absence of express instructions to the contrary form
      part of the Portfolio. Any income derived from the Portfolio, any monies
      resulting from disposal or redemption of securities or other property
      forming part of the Portfolio, and any securities or other property
      purchased out of any such proceeds, shall be added to the Portfolio.



                                       2
<PAGE>


2.3.  Subject as hereinafter provided, the Client warrants that it is and shall
      during the continuance of this Agreement remain the beneficial owner of
      the Portfolio free of all liens, charges, options and third party rights
      whatsoever. 

3.    CUSTODY

3.1.  Subject to 3.2. below, all funds and assets transferred to the Company by
      the Client or otherwise acquired pursuant hereto plus securities or other
      property purchased or acquired pursuant hereto shall be deposited with the
      Custodian for safekeeping.

3.2.  Notwithstanding the foregoing, subject to all necessary or desirable
      consents of any relevant authorities, the Company or the Custodian may
      give effect to their obligations hereunder by depositing securities or
      other investments held or acquired pursuant hereto with any Additional
      Custodian or with Euroclear, CEDEL or other securities clearing houses or
      by employing sub-custodians or other agents.

3.3   As the Client shall request, registered securities will be registered in
      the name of the Client, the Custodian or any trustee or nominee company
      specified in the Schedule hereto or notified by the Client to the Company
      from time to time, which trustee or nominee company will hold them as
      nominee for the Client.

4.    SCOPE OF AUTHORIZATION

4.1.  The Client hereby authorizes the Company on the Client's behalf to invest
      and re-invest, and vary the investment of, the Portfolio and any part
      thereof, in accordance with the guidelines specified in the Schedule
      hereto and as the Client may communicate by written instructions to the
      Company from one or more persons authorized by the Board of Directors of
      the Client from time to time but otherwise at the complete and absolute
      discretion of the Company; provided however that the disposition of the
      Client's property shall at all times be and remain within the Client's
      control. The Client shall furnish the Company with a certified copy of any
      resolution of the Board of Directors of the Client authorizing any person
      to give instructions to the Company on the Client's behalf, and the
      Company shall be entitled to accept such resolution as conclusive evidence
      of that persons authority to give such instructions to the Company.

4.2.  The Company shall make all decisions concerning any purchases, sales,
      conversion privileges, subscription rights or other options appertaining
      to the Portfolio of which the Company has written notice, in each case in
      accordance with the Company's understanding of any investment policy
      and/or investment guidelines set out in the Schedule hereto or
      communicated by the Client in writing to the Company.

4.3.  The Custodian shall deliver securities or other property, make payments or
      otherwise move any part of the Portfolio on the Client's behalf on the
      express instructions of the Client in writing or by tested telex or
      facsimile.

4.4   The Company shall not (a) vote, tender or convert any securities in the
      Portfolio, (b) execute waivers, consents and other instruments with
      respect to such securities, and (c) endorse, transfer or deliver such
      securities or consent to any class action, plan of


                                       3
<PAGE>

      reorganization, merger, combination, consolidation, liquidation,
      liquidation or similar plan with respect to such securities; provided,
      however, that the Company shall deliver to the Client any notice
      solicitation, plan, or other documentation relating to any of the
      foregoing which is provided to the Company in its capacity as the
      representative of the Client. The Company shall not incur any liability to
      the Client by reason of any such failure to perform any such services
      other than by reason of its failure to deliver as described in the
      provision above. If the Company shall receive prior written notice of the
      Client, in each case in accordance with the Investment Policy Guideline
      set out in Schedule I hereto, in sufficient time, as determined by the
      Company in its sole discretion, to perform any of the above-described
      services, the Company, in the exercise of its best efforts, shall perform
      such service on behalf of the Client.

4.5.  The Company may appoint brokers, clearing organizations, agents or other
      parties or intermediaries as the Client may agree from time to time for
      the performance of any of its duties relating to the investment and
      management of the Portfolio hereunder. Fees of brokers and such other
      intermediaries and of the Custodian shall be paid by the Custodian out of
      the Portfolio and all such payments shall be reported directly to the
      Client.

4.6.  The authorities herein contained are continuing ones and shall remain in
      full force and effect until revoked by termination of this Agreement,
      which termination will not affect any transaction entered into prior to
      the date on which such termination took effect.

4.7.  In this Agreement "Affiliate" means any holding company or subsidiary of
      the relevant party or any other subsidiary of such a holding company
      ("subsidiary" and "holding company" having the meanings given to them by
      section 155 of the Companies Act 1963).

4.8.  The Company may sell or purchase investments which are included in, or
      intended to become part of, the Portfolio as part of a larger transaction
      or series of transactions in which other persons are interested PROVIDED
      THAT the terms of such purchase or sale are in the Company's reasonable
      opinion fair and equitable and, where the Company deals on behalf of the
      Client and other persons as part of a larger transaction, or in a
      transaction not specifically allocated to the Client at the time of
      dealing, the transaction is to be identified in the Company's records on
      the day of dealing as being expressly, wholly or to a specified extent for
      the benefit of the Client and is to be accordingly allocated to the Client
      and the price paid or received being that price agreed in the original
      transaction should also be recorded in the Company's records on the day of
      dealing.

4.9.  Nothing contained in this Agreement shall prevent the Company or any of
      its Affiliates from engaging in other businesses or rendering services of
      any kind to any other person or entity. In connection therewith, the
      Company and its Affiliates may, without limitation:

      (a)  receive fees for services rendered to any of the issuers of
           securities held in the Portfolio;



                                       4
<PAGE>

      (b)  be retained to provide services to the Client or any of its
           Affiliates in addition to the services the subject of this Agreement;

      (c)  hold the capital stock of the Client or any of its Affiliates; and

      (d)  hold the capital stock of any of the issuers of securities held in
           the Portfolio.

4.10. Portfolio investments and reinvestments may differ from those made or
      recommended with respect to other clients, including investment companies,
      even though the investment objectives may be the same or similar. The
      Company shall not be liable for such differences as exist between
      Portfolio investments or reinvestments and investments or reinvestments
      made or recommended with respect to other clients of the Company.

4.11. Movements in currency exchange rates may have a separate effect,
      unfavorable as well as favorable, on the gain or loss otherwise
      experienced on a Portfolio investment. The Company shall not be liable for
      any losses experienced on a Portfolio investment due to movements in
      currency rates.

4.12. The Company may appoint any person, firm or corporation to act as
      sub-investment adviser and/or sub-investment manager to assist the Company
      in the performance of its obligations under this Agreement. The Company
      shall notify the Client of any such appointment. Fees of any such
      sub-investment adviser or sub-investment manager shall be paid by the
      Company and shall not be paid by the Client.

5.    REPORTING

      The Company shall at least once a month provide the Client with statements
      containing information which may be set out in a Schedule hereto and such
      other reports or data as may be reasonably requested. The Company shall
      maintain appropriate records of all its activities hereunder and shall
      make such records available to the Client or its agents as the Client
      shall reasonably request.

6.    FEES

      As remuneration for the services provided under this Agreement the Client
      shall pay to the Company the fees set out in Schedule I hereto. The fees
      shall be paid each month in arrears. It is agreed between the Client and
      the Company that the fees as set out in the Schedule hereto are subject to
      revision by the Company after one year from the date of this Agreement on
      at least 45 days notice to the Client.

7.    REPRESENTATIONS AND WARRANTIES

7.1.  The Client hereby represents and warrants to the Company as follows:



                                       5
<PAGE>

      (a)  the Client is a corporation duly organized, validly existing and in
           good standing under the laws of its jurisdiction of incorporation
           and has the corporate power and corporate authority to own its
           assets and to transact the business in which it is now engaged;

      (b)  the Client has the corporate power and corporate authority to execute
           and deliver this Agreement and to perform its obligations hereunder.
           This Agreement has been duly authorized, executed and delivered by
           the Client and constitutes a legal, valid and binding obligation of
           the Client enforceable against the Client in accordance with its
           terms.

           No consent of any person, including without limit the stockholders or
           creditors of the Client, and no license, permit, approval or
           authorization of, or exemption by any governmental authority is
           required by the Client in connection with this Agreement;

      (c)  the execution, delivery and performance of this Agreement will not
           violate any provision of any existing law or regulation binding on
           the Client, or any order, judgment, award or decree of any court,
           arbitrator or government authority binding on the Client, or the
           Memorandum of Association or bye-laws, both as amended, of the
           Client, or any mortgage, indenture, lease, contract or other
           agreement, instrument or undertaking to which the Client is a party
           or by which the Client or any of its assets may be bound, or require
           the creation or imposition of any lien on any property, assets or
           revenues of the Client pursuant to the provisions of any such
           mortgage, indenture, lease, contract or other agreement, instrument
           or undertaking;

      (d)  the Client shall deliver to the Company such information, papers and
           documents required or reasonably requested by the Company in
           connection with the performance of its duties for the Portfolio;

      (e)  the Client shall promptly notify the Company of any facts or
           circumstances or any change therein which may, directly or
           indirectly, affect the management of the Portfolio by the Company;

      (f)  the list of signatures provided as part of Schedule II constitutes
           the valid signatures of all officers, employees or agents of the
           Client authorized to take action with respect to the Portfolio and
           the Company shall be entitled to rely conclusively on any document
           executed by any one of them;

      (g)  subject as herein provided, the Client is and shall during the term
           of this Agreement remain as the beneficial owner of the Portfolio,
           free and clear of any and all liens, charges, options and
           encumbrances or other third party rights whatsoever.

8.    LIMITS ON COMPANY RESPONSIBILITY

8.1.  The duties and obligations of the Company shall be determined solely by
      the express provisions of this Agreement and the Company shall be
      responsible only for the good 




                                       6
<PAGE>

      faith performance of its duties and obligations as are specifically set
      out in this Agreement. The Company shall not be bound in any way by any
      agreement or contract between the Client and any third party (whether or
      not the Company has knowledge thereof).

8.2.  The Company shall not be responsible in any manner whatsoever for any
      failure or inability of the Client to honour any of the provisions of this
      Agreement.

8.3.  The Company shall not be responsible for the solvency of or the due and
      proper performance of the obligations of any third party bank, clearing
      organization, broker, intermediary, nominee or agent appointed or employed
      by the Company in good faith for the performance of its duties but the
      Company shall make available to the Client such rights (if any) as the
      Company may have against such person or institution in the event of the
      insolvency of the said persons or institutions or its failure properly to
      perform such obligations and shall give such assistance as the Client may
      reasonably require to exercise such rights.

8.4.  The Company shall be fully protected in acting on and relying upon any
      written advice, certificate, notice, direction, instruction, request or
      other paper or document which the Company in good faith believes to be
      genuine and to have been signed or presented by the proper party or
      parties, and may assume that any person purporting to give such advice,
      certificate, notice, direction, instruction or request or other paper or
      document has been duly authorized to do so.

8.5.  The Company may seek legal advice in the event of any dispute or question
      as to the construction of any of the provisions of this Agreement or its
      duties hereunder, and it shall incur no liability and shall be fully
      protected in respect of any action taken, omitted or suffered by it in
      good faith in reliance upon and in accordance with the opinion of such
      legal advice.

8.6.  The Company shall not be liable to the Client for any acts or omissions by
      the Company, its employees and agents under and in connection with this
      Agreement, except by reason of acts or omissions constituting bad faith,
      gross negligence or willful misconduct.

8.7.  The Client shall reimburse and indemnify the Company for, and hold it
      harmless against, any loss, liability or expense, including without limit
      legal fees, incurred without bad faith, willful misconduct or gross
      negligence on the part of the Company arising out of or in connection with
      its acceptance of, or the performance of its duties and obligations under,
      this Agreement as well as the costs and expenses of defending against any
      claim or liability arising out of or relating to this Agreement.

8.8.  While the Company will endeavour to obtain the best price in any
      transaction effected for the Client in accordance with the terms of this
      Agreement, neither the Company nor any sub-investment manager or
      sub-investment adviser appointed pursuant to clause 4.11 of this
      Agreement, will owe the Client the duty of "Best Execution" as defined in
      the IMRO Rules or elsewhere, other than as may be agreed in writing
      between the Client and the Company from time to time.



                                       7
<PAGE>

8.9.  Any complaints by the Client should be addressed in the first instance to
      any Director of the Company.


9.    LIABILITY FOR LOSSES

9.1.  The Company shall not be liable for loss caused directly or indirectly by
      government restrictions, exchange or market rulings, suspension of
      trading, war, strikes or other conditions beyond the Company's control.

10.   CONFIDENTIALITY

      Except as required by the provisions of any applicable laws, rules, and
      regulations or by any court order, neither of the parties hereto shall
      during the continuance of this Agreement or after its termination disclose
      any information relating to the business, investments, finances or other
      matters of a confidential nature to any third party of which it may in the
      course of the performance of the Agreement have become possessed.

11.   TERMINATION AND AMENDMENT

11.1. This Agreement may be terminated by either party at any time from one year
      after the date of this Agreement upon giving at least 30 days' written
      notice to the other party.

11.2. Subject to any commitments made prior to the date of notice of termination
      pursuant to sub-clause 11.1. above to purchase or dispose of securities or
      other property (which shall be executed or completed even after such
      date), the Company shall not after the date of said notice of termination
      execute any further transactions on the Client's behalf. Upon termination,
      neither of the parties shall have any obligation to the other except for
      the parties' obligations under Clauses 8.7 and 10 and the Company's
      obligation to return to the Client (as promptly as practicable in such
      forms as it may then exist) the Portfolio, after deduction of management
      fees and other sums properly due to the Company under this Agreement to
      the date of termination, together with a full account of all transactions
      effected up to such date.

12.   WITHDRAWAL

12.1. The Client may withdraw any part of the Portfolio from management by the
      Company at any time by giving 30 days' notice to the Company in writing.
      Any assets withdrawn will be delivered to the Client as soon as
      practicable thereafter.

12.2. A notice to withdraw the whole of the Portfolio will terminate this
      Agreement as if it were a notice given under Clause 11, provided that such
      notice may only be given in accordance with Clause 11.



                                       8
<PAGE>

13.   GOVERNING LAW

13.1. This Agreement shall be governed by and construed in accordance with the
      laws of the Republic of Ireland.

13.2. If any suit or arbitration is instituted by any of the parties hereto to
      enforce any of the terms or conditions of this Agreement, each of the
      parties hereto hereby submits to the jurisdiction of the courts of the
      Republic of Ireland.

14.   ARBITRATION

14.1. In the event of any dispute arising out of or in relation to this
      Agreement the same shall be decided by Arbitration in accordance with the
      provisions of the Arbitration Act 1954, or any statutory modification or
      re-enactment thereof for the time being in force.

14.2. For the purposes of this Agreement the Arbitrator shall be chosen by the
      President for the time being of the Incorporated Law Society of Ireland.

15.   NOTICES

15.1. Notices to the Company may be delivered or dispatched by registered mail,
      or may be faxed or telexed to the Company's address in Dublin, and to such
      other addresses (and in the case of telex or fax to such telex or fax
      addresses) as the Company may have designated in writing to the Client.
      Such notices shall be deemed to have been properly delivered or given
      hereunder and shall be effective on the date of delivery if delivered,
      telexed or faxed or, if dispatched by registered mail, on the day on which
      the same have been tendered for delivery by post.

15.2. Notices to the Client may be delivered or dispatched by registered mail,
      or may be telexed or faxed to the Client's registered office or to such
      other address as may be notified in writing by the Client to the Company.
      Such notices shall be deemed to have been properly delivered or given
      hereunder and shall be effective on the date of delivery if delivered,
      telexed or faxed or, if dispatched by registered mail, on the day on which
      the same have been tendered for delivery by post.

16.   RULES

16.1. Where at any time compliance with any provision in this Agreement would be
      contrary to any bye-law, rule, regulation or code of conduct or practice
      in force from time to time and applying to either party, then the parties
      shall meet to discuss in good faith a method of amending this Agreement in
      light of such circumstances. If the parties cannot agree on a satisfactory
      amendment within 45 days of the parties becoming aware of such potential
      conflict, then either party may by notice to the other terminate this
      Agreement forthwith. Sub-clause 11.2. shall apply to such termination.

16.2. If any provision or condition of this Agreement shall be held to be
      invalid or unenforceable by any court, or regulatory agency or body, such
      invalidity or unenforceability shall attach only to such provision or
      condition. The validity of the remaining provisions shall not be affected
      thereby and this Agreement shall be carried out as if such invalid or
      unenforceable provision or conditions were not contained herein.


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<PAGE>

17.   ENTIRE AGREEMENT AND AMENDMENTS

17.1. This Agreement, together with the Schedules hereto, constitutes the entire
      agreement between the parties with respect to the management of the
      Portfolio and matters ancillary thereto, including all accounts which the
      Client may open or re-open with the Company, and supersedes and
      extinguishes any arrangement, representations and/or warranties previously
      given or made other than those expressly set out in this Agreement.

17.2. The express terms hereof control and supersede any course of performance
      and/or usage of the trade.

17.3. This Agreement may not be amended except by a notice in writing signed by
      both of the parties hereto.

18.   NO WAIVER

      Neither the failure nor delay on the part of any party in exercising any
      right, remedy, power or privilege under this Agreement shall operate as a
      waiver thereof, nor shall any single or partial exercise of any right,
      remedy, power or privilege preclude any other or further exercise of the
      same or any other right, remedy, power or privilege nor shall any waiver
      of any right, remedy, power or privilege with respect to any occurrence be
      construed as a waiver of such right, remedy, power or privilege with
      respect to any other occurrence. No waiver hereunder shall be effective
      unless it is in writing and is signed by the party asserted to have
      granted such waiver.

19.   NO JOINT VENTURE

      The Company and the Client are not partners or joint venturers together
      and nothing herein shall be construed to make them such partners or joint
      venturers or impose liability as such by reason thereof.

20.   SUCCESSORS AND ASSIGNS

      No assignment of this Agreement may be made by any party to this Agreement
      without the consent of the other parties hereto, and any such assignment
      made without such consent shall be null and void for all purposes. Subject
      to the foregoing, the provisions of this Agreement shall be binding upon
      and shall inure to the benefit of and be enforceable by each of the
      parties hereto and their respective successors and assigns.

21.   COUNTERPARTS

      This Agreement may be executed in any number of counterparts, each of
      which shall be an original with the same effect as if the signatures
      thereto and hereto were upon the same instrument, and such counterparts
      together shall constitute one and the same instrument.

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<PAGE>

22.   GENERAL

22.1. The Company may whether for its own account or that of any other person
      acquire, hold or deal in any investments of any kind, nature or
      description whatsoever, and nothing in this Agreement shall prevent the
      Company from contracting or entering into or being interested in any
      financial, banking, commercial, advisory or other transaction with any
      other person.

22.2. The Company shall at all times maintain and keep in full force and effect
      such insurance against such risks as is customary and appropriate for
      investment management activities similar to those of the Company.

23.   EFFECTIVE DATE AND SCHEDULES

      This Agreement shall take effect from the 23rd of June 1997 subject to any
      matter specified in the Schedules.

24.   HEADINGS

      The section headings contained herein are for convenience only and shall
      not alter or limit or define the provisions hereof.


IN WITNESS whereof the parties hereto have caused this Agreement to be executed
as of the day and year first above written.






SIGNED BY: ____________________________________

FOR AND ON BEHALF OF
INTERNATIONAL PROPERTY CATASTROPHE REINSURANCE COMPANY, LTD.





SIGNED BY: _____________________________________

FOR AND ON BEHALF OF
AIG GLOBAL INVESTMENT CORP. (IRELAND) LTD.






                                       11

<PAGE>

                                   SCHEDULE I

                           INVESTMENT POLICY GUIDELINE

I.   PORTFOLIO
   
     1.  The Client is INTERNATIONAL PROPERTY CATASTROPHE REINSURANCE COMPANY 
         LTD.  The Portfolio shall be called PROP (the "Portfolio").
    
         a.  The Portfolio represents capital for solvency purposes of the 
             Client.

         b.  The primary objective of the Portfolio is preservation of capital.
             A secondary objective is returns commensurate with the Benchmark as
             hereinafter defined.

     2.  The Portfolio is to be invested only in the asset class(es) detailed
         below;  together  with all  subsequent  additions  thereto of which the
         Company is given notice,  and all other  property  acquired  therefrom,
         proceeds  therefrom,  or  in  substitution  therefor,  less  authorized
         payment by the Custodian.

                         Asset Class         Min%      Max%
        -----------------------------------------------------
         [x]  Fixed Income Securities           0       100
                                             -----     -----
         [x]  Money Market Instruments          0       100
                                             -----     -----
         [x]  Equity Securities                 0        20
                                             -----     -----
         [ ]  Convertible Bonds              _____     _____
         [ ]  Equity Derivatives             _____     _____
         [ ]  Financial Derivatives          _____     _____
         [x]  Foreign Exchange Contracts        0        20
                                             -----     -----
         [ ]  Foreign Exchange Derivatives   _____     _____
         [x]  Money Market Funds                0       100
                                             -----     -----
         [x]  Repurchase Agreements             0       100
                                             -----     -----
         [ ]                                 _____     _____
         [ ]                                 _____     _____


         Other asset classes shall not be permitted without the express written
         approval of the Client.

             [    ] Additional detail is attached as Asset Class Schedule.
   
         a.  The Portfolio shall be denominated in US dollars, hereinafter 
             referred to as the Base Currency.
    

     3.  Counterparty Risk

         a.  Wherever possible, all securities transactions shall be executed
             "delivery versus payment."

         b.  All securities transactions shall be executed with commercial
             banks, investment banks, brokers and trading firms 
             ("Counterparties") of recognized standing in the financial markets.

         c.  To the extent that OTC Options and other derivatives, Foreign 
             Exchange Contracts and Repurchase Agreements are permitted in 
             Section I.2, they shall be executed with Counterparties of
             recognized standing in the financial markets.  Further, such 
             Counterparties shall carry Investment Grade Ratings, as defined by
             Moody's or Standard & Poor's.


                                       1
<PAGE>


II.   BENCHMARK

      The Portfolio performance shall be measured with regard to the following
      composite index which shall be considered the base asset allocation of the
      Client:

          Salomon Eurodollar 1-3 year Index               42.5
                                                      --------
          Salomon Eurodollar 3-5 year Index               42.5
                                                      --------
          US S & P 500 Index                              15.0
                                                      --------

   
III.  CUSTODIAN

      1.  The main Custodian is AIG Global Investment Trust Services, Ltd.,
          although additional Custodian accounts may be opened with the approval
          of the Client.
    

IV.   GENERAL FIXED INCOME GUIDELINES

      1.  Currency

          The Fixed Income Portfolio is a    [ ] Single Currency Account 
                                             [ ] Hedged Currency Account 
                                             [X] Multi-Currency Account 
                                                 as hereinafter defined.

          a.   A Single Currency Account shall be invested 100% in the Base 
               Currency as defined in Section I.2.a.  Securities denominated in 
               or linked to other currencies are permitted only at the direction
               of the Client.
   
          b.   A Hedged Currency Account shall be invested in securities 
               denominated in or linked to any currency provided, however, that 
               foreign exchange contracts, futures and/or options are executed
               to reduce the net non-Base Currency exposure to less than 5% of 
               the Portfolio Market Value.

          c.   A Multi-Currency Account shall be invested in securities 
               denominated in or linked to any currency.  Whether or not foreign
               exchange contracts, futures and or options are permitted in 
               Section I.2., the non-Base Currency exposure of the Portfolio 
               shall not exceed 20.0% of the Portfolio Market Value.  The net 
               non-Base Currency exposure shall not exceed 20.0% of the
               Portfolio Market Value.
    
               Unless permitted in Section I.2., Foreign Exchange Contracts
               shall not be executed for a Multi-Currency Account except for the
               acquisition or disposition of securities or for the conversion of
               coupon/dividend receipts to the Portfolio Base Currency; no 
               hedging or speculative currency transactions are permitted.


      2.  Country Risk

          The Portfolio is a  [X] Diversified Country Risk Account
                              [ ] Targeted Country Risk Account as hereinafter 
                                  defined.
   
          All country limits are percent of Portfolio Market Value on date of 
          purchase and refer to the country of issuer or guarantor.  In the case
          of banking institutions, the country of a full branch shall be deemed 
          to be the domicile of the head office.  Country exposures shall not 
          exceed the greater of the country limit or U.S. $5,000,000 equivalent 
          at the time of purchase.
    

                                       2

<PAGE>



          A Diversified Country Risk Account permits the following per country
          limits.

          a.  United States                                               100%

          b.  Canada              Switzerland                              75%
              Germany             United Kingdom
              Japan

          c.  EEC, EIB, ECSC, World Bank (IBRD), Other Supranationals      50%

          d.  Australia    Finland      Luxembourg      Portugal           25%
              Austria      France       Netherlands     Spain
              Belgium      Ireland      New Zealand     Sweden
              Denmark      Italy        Norway

          e.  Other (Total value of all securities not covered under 
              IV.2.a.-d. above)                                            10%

              A Targeted Country Risk Account specifically targets the
              investment opportunities in one or more particular countries as 
              detailed below:

                 ------------------------    -----------%
                 ------------------------    -----------%
                 ------------------------    -----------%

              [  ] Additional detail attached as Country Risk Schedule.

   
      3.  Issuer Limits

          a.  Except in the case of Supranational, Sovereign, and Sovereign - 
              supported issues, where the limits under IV.2 above apply, the 
              securities of one issuer should not exceed the greater of 10.0% 
              of the Portfolio Market Value or U.S. $5,000,000 at time of
              purchase.


      4.  Issue Limits

          a.  In the case of fixed income securities, no holding should exceed 
              the greater of 10% of the amount outstanding or U.S. $5,000,000 
              nominal at the time of purchase.

      5.  Maturity Limits

          a.  In the case of fixed income securities, no individual security
              shall have a remaining modified duration greater than EIGHT YEARS.

          b.  In the case of money market securities, no individual security
              shall  have  a  remaining   maturity   greater   than  ten  years,
              notwithstanding  the frequency of any rate reset  provision of the
              security.

          c.  The Portfolio shall maintain a target weighted average modified 
              duration of between approximately 1.25 and 3.75 years.  For 
              purposes of this calculation only, the maturity of a floating rate
              security is deemed to be its next succeeding reset date.

      6.  US Securities

          The purchase of US securities is permitted.
    

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<PAGE>


   
      7.  Credit Risk

          a.  All securities purchased for the Portfolio which carry a long term
              rating by either Standard & Poor's or Moody's shall have a rating
              of  AA- or AA3 or better at the time of purchase.  Notwithstanding
              the foregoing, securities may be purchased for the Portfolio which
              have ratings of A- or A3 or better provided that, in aggregate,
              they do not constitute more than 25% of the Portfolio Market
              Value. (Securities which are not so rated at the time of intended
              purchase shall not be permitted except on a case by case approval
              of the Client.)

              All securities purchased for the Portfolio which carry a short
              term rating by either Standard & Poor's or Moody's shall have a 
              rating of A-1 or P-1 or better at the time of purchase.  Notwith-
              standing the foregoing, securities may be purchased for the 
              Portfolio which have ratings of  A-2 or P-2 or better provided
              that, in aggregate, they do not constitute more than 25% of the 
              Portfolio Market Value. (Securities which are not so rated at the 
              time of intended purchase shall not be permitted except on a case 
              by case approval of the Client.)

          b.  Unrated securities are permitted.  The unrated securities shall
              have credit quality at the time of purchase, as determined in good
              faith by the Company, equivalent to other permitted securities 
              which are rated as in IV.7.a.  The Client shall be notified at 
              least quarterly as to the composition and status of the unrated 
              securities held in the Portfolio.

          c.  A security purchased either in accordance with Section IV.7.a. 
              which receives a downwardly revised rating or in accordance with
              Section IV.7.b. which receives a newly established rating that in 
              either case would make such security ineligible for further
              purchase remains a permitted security to the extent of the then 
              current holdings.

          d.  Private placements are permitted.  Any private placements
              purchased for the Portfolio shall be marketable securities.  This 
              permission is specifically intended to allow the purchase of 
              unlisted securities.

    
          [ ] Additional detail is attached as Credit Risk Schedule.


      8.  Realized Gains/Losses

          Net realized capital gains and losses should be minimized.  (For 
          example: To the extent fixed income assets are permitted, bond switch 
          activity to enhance returns is encouraged, but should not become
          excessive and should be undertaken within the context of minimizing 
          net gains and losses).


V.  GENERAL EQUITY  GUIDELINES

    The Equity portion of the portfolio seeks to replicate the aggregate price
    and yield performance of the Standard & Poor's 500 Composite Stock Price
    Index (the "S&P 500 Index"), an index which emphasizes large capitalization
    companies in the United States.


                                       4

<PAGE>

   
VI. FEES

    The fee schedule will be calculated as follows:  0.35% per annum on the 
    first $100 million U.S. dollars, or equivalent of Portfolio Market value;
    0.25% per annum on the next $100 million; and 0.15% per annum on any amount 
    exceeding $200 million.

    The fees will be calculated based on the previous month end Market value of 
    the portfolio (including accrued interest) and are payable monthly in 
    arrears.  The fees shall be reduced proportionally for any part of a period 
    in which this Agreement is not in full effect.
    
    [  ]  Additional detail is attached as Supplementary Fee Schedule





Signed by:_________________________________________
                     for and on behalf of
          INTERNATIONAL PROPERTY CATASTROPHE REINSURANCE COMPANY LIMITED





Signed by: _________________________________________
                     for and on behalf of
           AIG GLOBAL INVESTMENT CORPORATION (IRELAND) LIMITED


                                       5

<PAGE>


                                   SCHEDULE II

                               AUTHORIZED PERSONS

     Name(s) and address(es) of persons authorized to give and receive notices, 
     consents or other communications.

     Name                             Address
     --------------------             ------------------------------------------
     Niall C. Sommerville             AIG Global Investment Corp. (Ireland) Ltd.
     Iwan R. Datwiler                 AIG House
                                      Merrion Road
                                      Dublin 4,
                                      Ireland

                                      PHN: 353-1-283-7766
                                      FAX: 353-1-283-7820
                                      TLX: 91965


-------------------------------------------------

-------------------------------------------------

     Name                             Address
     --------------------             ------------------------------------------
     John P. Dowling                  International Property Catastrophe
     John R. Weale                       Reinsurance Co. Ltd.
     Dennis J. Higginbottom           P.O. Box HM 152
                                      Hamilton HM AX
                                      Bermuda

                                      PHN: 441-295-2121
                                      FAX: 441-292-8085


-------------------------------------------------

-------------------------------------------------

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______________________
1 Version: 25 June 1997.


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