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                                                                    EXHIBIT 4.17

                                     FORM OF

                               GUARANTEE AGREEMENT

                                     BETWEEN

                           MONTPELIER RE HOLDINGS LTD.

                                 (AS GUARANTOR)

                                       AND

                              THE BANK OF NEW YORK

                             (AS GUARANTEE TRUSTEE)

                                   DATED AS OF

                               [        ], 200__

                              MRH CAPITAL TRUST I

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                <C>
ARTICLE I.          DEFINITIONS.....................................................1

     Section 1.1    Definitions.....................................................1

ARTICLE II.         TRUST INDENTURE ACT.............................................5

     Section 2.1    Trust Indenture Act:  Application...............................5
     Section 2.2    List of Holders.................................................5
     Section 2.3    Reports by the Guarantee Trustee................................5
     Section 2.4    Periodic Reports to the Guarantee Trustee.......................5
     Section 2.5    Evidence of Compliance with Conditions Precedent................6
     Section 2.6    Events of Default; Waiver.......................................6
     Section 2.7    Event of Default; Notice........................................6
     Section 2.8    Conflicting Interests...........................................6

ARTICLE III.        POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE..................7

     Section 3.1    Powers and Duties of the Guarantee Trustee......................7
     Section 3.2    Certain Rights of the Guarantee Trustee.........................8
     Section 3.3    Indemnity......................................................10

ARTICLE IV.         GUARANTEE TRUSTEE..............................................11

     Section 4.1    Guarantee Trustee; Eligibility.................................11
     Section 4.2    Appointment, Removal and Resignation of Guarantee Trustees.....11

ARTICLE V.          GUARANTEE......................................................12

     Section 5.1    Guarantee......................................................12
     Section 5.2    Waiver of Notice and Demand....................................12
     Section 5.3    Obligations Not Affected.......................................12
     Section 5.4    Rights of Holders..............................................13
     Section 5.5    Guarantee of Payment...........................................13
     Section 5.6    Subrogation....................................................13
     Section 5.7    Independent Obligations........................................14
     Section 5.8    Net Payments...................................................14

ARTICLE VI.         LIMITATION OF TRANSACTIONS; RANKING............................15

     Section 6.1    Limitation of Transactions.....................................15
     Section 6.2    Ranking........................................................16
     Section 6.3    Pari Passu Guarantees..........................................16

ARTICLE VII.        TERMINATION....................................................16

     Section 7.1    Termination....................................................16

ARTICLE VIII.       MISCELLANEOUS..................................................16

     Section 8.1    Successors and Assigns.........................................16
</TABLE>

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<TABLE>
<S>                                                                                <C>
     Section 8.2    Amendments.....................................................17
     Section 8.3    Notices........................................................17
     Section 8.4    Benefit........................................................18
     Section 8.5    Governing Law..................................................18
     Section 8.6    Interpretation.................................................18
     Section 8.7    Submission to Jurisdiction.....................................19
     Section 8.8    Judgment Currency..............................................20
</TABLE>

                                       ii

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                               GUARANTEE AGREEMENT

        This GUARANTEE AGREEMENT, dated as of [        ], 200__, is executed and
delivered by Montpelier Re Holdings Ltd., a company incorporated and organized
under the laws of Bermuda ("Montpelier" or the "Guarantor"), having its
principal executive offices at Mintflower Place, 8 Par-La-Ville Road, Hamilton
HM 08, Bermuda, and [        ], a New York banking corporation, having a
corporate trust office located at [               ], as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of MRH Capital Trust I, a
Delaware statutory trust (the "Issuer").

        WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of [          ], 200__, among the Trustees named therein, the Guarantee Trustee,
as Property Trustee, [         ], a Delaware banking corporation, as Delaware
Trustee, and the Guarantor, as depositor (in such capacity, the "Depositor"),
and the Holders from time to time of undivided beneficial ownership interests in
the assets of the Issuer (the "Trust Agreement"), the Issuer is issuing up to
$[        ] ($[        ] if the underwriters exercise in full their
over-allotment option pursuant to an underwriting agreement dated [        ],
200__, by and among the Issuer and the underwriters listed on Schedule A
thereto), aggregate liquidation preference of its [  ]% Trust Originated
Preferred Securities (liquidation preference $[  ] per preferred security) (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Issuer and having the terms set forth in the Trust Agreement;

        WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined herein), will be used to purchase the Debentures
(as defined herein) of Montpelier (in its capacity as issuer of the Debentures,
the "Debenture Issuer"), which will be deposited with [Guarantee Trustee Name],
as Property Trustee under the Trust Agreement, as trust assets; and

        WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;

        NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.

                                   ARTICLE I.
                                   DEFINITIONS

        Section 1.1     Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or

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otherwise defined terms used, but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.

        "Additional Amounts" means any additional amounts which are required
hereby or by the terms of the Preferred Securities, under circumstances
specified herein or therein, to be paid by the Guarantor in respect of certain
taxes, assessments or other governmental charges imposed on Holders specified
therein and which are owing to such Holders.

        "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purpose of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

        "Authorized Officer" means, when used with respect to any Person, the
Chairman of the Board of Directors, a Vice Chairman, the President, the Vice
President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer,
the Chief Investment Officer, the Chief Accounting Officer, the General Counsel,
the Secretary or an Assistant Secretary, of such Person.

        "Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
generally accepted accounting principles, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles.

        "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

        "Debentures" means the series of subordinated debt securities of the
Debenture Issuer designated the [ ]% Junior Subordinated Debentures due
[          ], [   ] held by the Property Trustee.

        "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.

        "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) that are required to be paid
on such Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price") with respect to Preferred Securities called for redemption by the Issuer
to the extent the Issuer shall have funds on hand available therefor at such
time and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Issuer, unless Debentures are distributed to the Holders, the

                                        2

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lesser of (a) the aggregate of the liquidation preference of $[ ] per Preferred
Security plus accrued and unpaid Distributions on the Preferred Securities to
the date of payment, to the extent the Issuer shall have funds on hand available
to make such payment at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").

        "Guarantee Trustee" means [       ], until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to the terms of
this Guarantee Agreement and thereafter means each such Successor Guarantee
Trustee.

        "Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Depositor, the Guarantee Trustee or any
Affiliate of the Guarantor, the Depositor, or the Guarantee Trustee.

        "Indebtedness" means, with respect to any Person, (i) the principal of
and any premium and interest on (a) indebtedness of such Person for money
borrowed or (b) indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is responsible or
liable; (ii) all Capitalized Lease Obligations of such Person; (iii) all
obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all obligations under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (v) all obligations of the type referred to in clauses
(i) through (iv) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable as
obligor, guarantor or otherwise, the amount thereof being deemed to be the
lesser of the stated recourse, if limited, and the amount of the obligation or
dividends of the other person; and (vi) all obligations of the type referred to
in clauses (i) through (v) of other Persons secured by any Lien on any property
or asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured; and
(vii) any amendments, modifications, refundings, renewals or extensions of any
indebtedness or obligation described as Indebtedness in clauses (i) through (vi)
above.

        "Indenture" means the Junior Subordinated Indenture dated as of
[         ], 200__ among the Debenture Issuer and [          ], as trustee, and
any indenture supplemental thereto pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.

        "List of Holders" has the meaning specified in Section 2.2(a).

                                        3

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        "Majority in liquidation preference of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s), voting
separately as a class, of more than 50% of the liquidation preference of all
then outstanding Preferred Securities issued by the Issuer.

        "Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers, at least one of which is a principal
executive, principal financial or principal accounting officer, and is delivered
to the Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee shall
include:

                (a)     a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;

                (b)     a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Officers' Certificate;

                (c)     a statement that such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

                (d)     a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.

        "Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated association or government or any agency or political subdivision
thereof.

        "Responsible Officer" means, with respect to the Guarantee Trustee, any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant treasurer or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers, and also, with respect to a particular matter,
any other officer, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

        "Senior Indebtedness" means all Indebtedness of the Guarantor
outstanding at any time, except (a) the Indebtedness under this Guarantee
Agreement, (b) Indebtedness as to which, by the terms of the instrument creating
or evidencing the same, it is provided that such Indebtedness is subordinated to
or pari passu with this Guarantee Agreement or to other Indebtedness of the
Guarantor which is subordinated to or pari passu with this Guarantee Agreement,
(c) Indebtedness of the Guarantor to an Affiliate of the Guarantor, (d) interest
accruing after the filing of a petition initiating any proceeding referred to in
Section [   ] and [   ] of the Indenture unless such interest is an allowed
claim enforceable against the Guarantor in a proceeding under federal or state
bankruptcy laws, (e) trade accounts payable and (f) similar Guarantee Agreements
issued by the Guarantor on behalf of holders of preferred securities of any
trust, partnership or other entity affiliated with the Guarantor which is a
financing vehicle of the Guarantor or any Affiliate of the Guarantor in
connection with the issuance by such entity of preferred securities or other
securities which are similar to preferred securities that are

                                        4

<PAGE>

guaranteed by the Guarantor pursuant to an instrument that ranks pari passu with
or junior in right of payment to this Guarantee Agreement.

        "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

        "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                   ARTICLE II.
                               TRUST INDENTURE ACT

        Section 2.1     Trust Indenture Act: Application

                (a)     This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions.

                (b)     If and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.

        Section 2.2     List of Holders

                (a)     The Guarantor shall furnish or cause to be furnished to
the Guarantee Trustee (i) semiannually, not later than May 1 and November 1 of
each year, a list, in such form as the Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of the
applicable date, and (ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished, in each case to the extent such information is in
the possession or control of the Guarantor and is not identical to a previously
supplied List of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

                (b)     The Guarantee Trustee shall comply with its obligations
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.

        Section 2.3     Reports by the Guarantee Trustee

        Within 60 days after May 15 of each year commencing with May 15, [    ],
the Guarantee Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.

        Section 2.4     Periodic Reports to the Guarantee Trustee

                                        5

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        The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders, such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
The delivery of such reports, information and documents to the Guarantee Trustee
pursuant to this Section 2.4 is for informational purposes only and the
Guarantee Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates) other than with respect to Section 3.2.

        Section 2.5     Evidence of Compliance with Conditions Precedent

        The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

        Section 2.6     Events of Default; Waiver

        The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of all Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

        Section 2.7     Event of Default; Notice

                (a)     The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default known to the Guarantee Trustee, transmit by
mail, first class postage prepaid, to the Holders, notices of all such Events of
Default, unless such defaults have been cured or waived before the giving of
such notice, provided, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as a the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

                (b)     The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer of the Guarantee Trustee
charged with the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.

        Section 2.8     Conflicting Interests

                                        6

<PAGE>

        The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III.
                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

        Section 3.1     Powers and Duties of the Guarantee Trustee

                (a)     This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

                (b)     If an Event of Default has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders.

                (c)     The Guarantee Trustee, before the occurrence of any
Event of Default and after the curing or waiver of all Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied covenants
shall be read into this Guarantee Agreement against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

                (d)     No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
negligent failure to act or its own bad faith or willful misconduct, except
that:

                        (i)     prior to the occurrence of any Event of Default
                                and after the curing or waiving of such Events
                                of Default that may have occurred:

                                (A)     the duties and obligations of the
                                        Guarantee Trustee shall be determined
                                        solely by the express provisions of this
                                        Guarantee Agreement, and the Guarantee
                                        Trustee shall not be liable except for
                                        the performance of such duties and
                                        obligations as are specifically set
                                        forth in this Guarantee Agreement, and

                                (B)     in the absence of bad faith on the part
                                        of the Guarantee Trustee, the Guarantee
                                        Trustee may conclusively rely, as to

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                                        the truth of the statements and the
                                        correctness of the opinions expressed
                                        therein, upon any certificates or
                                        opinions furnished to the Guarantee
                                        Trustee and conforming to the
                                        requirements of this Guarantee
                                        Agreement; but in the case of any such
                                        certificates or opinions that by any
                                        provision hereof are specifically
                                        required to be furnished to the
                                        Guarantee Trustee, the Guarantee Trustee
                                        shall be under a duty to examine the
                                        same to determine whether or not they
                                        conform to the requirements of this
                                        Guarantee Agreement;

                        (ii)    the Guarantee Trustee shall not be liable for
                                any error of judgment made in good faith by a
                                Responsible Officer of the Guarantee Trustee,
                                unless it shall be proved that the Guarantee
                                Trustee was negligent in ascertaining the
                                pertinent facts upon which such judgment was
                                made;

                        (iii)   the Guarantee Trustee shall not be liable with
                                respect to any action taken or omitted to be
                                taken by it in good faith in accordance with the
                                direction of the Holders of not less than a
                                Majority in liquidation preference of the
                                Preferred Securities relating to the time,
                                method and place of conducting any proceeding
                                for any remedy available to the Guarantee
                                Trustee, or exercising any trust or power
                                conferred upon the Guarantee Trustee under this
                                Guarantee Agreement; and

                        (iv)    no provision of this Guarantee shall require the
                                Guarantee Trustee to expend or risk its own
                                funds or otherwise incur personal financial
                                liability in the performance of any of its
                                duties or in the exercise of any of its rights
                                or powers, if the Guarantee Trustee shall have
                                reasonable grounds for believing that the
                                repayment of such funds or liability is not
                                reasonably assured to it under the terms of this
                                Guarantee Agreement or adequate indemnity
                                against such risk or liability is not reasonably
                                assured to it.

        Section 3.2     Certain Rights of the Guarantee Trustee

                (a)     Subject to the provisions of Section 3.1:

                        (i)     The Guarantee Trustee may conclusively rely
                                upon, and shall be fully protected in acting or
                                refraining from acting upon, any resolution,
                                certificate, statement, instrument, opinion,
                                report, notice, request, direction, consent,
                                order, bond, debenture, note, other evidence of
                                indebtedness or other paper or document believed
                                by it to be genuine and to have been signed,
                                sent or presented by the proper party or
                                parties.

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                        (ii)    Any direction or act of the Guarantor
                                contemplated by this Guarantee Agreement shall
                                be sufficiently evidenced by an Officers'
                                Certificate unless otherwise prescribed herein.

                        (iii)   Whenever, in the administration of this
                                Guarantee Agreement, the Guarantee Trustee shall
                                deem it desirable that a matter be proved or
                                established before taking, suffering or omitting
                                any action hereunder, the Guarantee Trustee
                                (unless other evidence is herein specifically
                                prescribed) may, in the absence of bad faith on
                                its part, request and rely upon an Officers'
                                Certificate which, upon receipt of such request,
                                shall be promptly delivered by the Guarantor.

                        (iv)    The Guarantee Trustee may consult with counsel
                                of its own selection, and the advice or opinion
                                of such counsel with respect to legal matters
                                shall be full and complete authorization and
                                protection in respect of any action taken,
                                suffered or omitted to be taken by it hereunder
                                in good faith and in accordance with such advice
                                or opinion. Such counsel may be counsel to the
                                Guarantor or any of its Affiliates and may
                                include any of its employees. The Guarantee
                                Trustee shall have the right at any time to seek
                                instructions concerning the administration of
                                this Guarantee Agreement from any court of
                                competent jurisdiction.

                        (v)     The Guarantee Trustee shall be under no
                                obligation to exercise any of the rights or
                                powers vested in it by this Guarantee Agreement
                                at the request or direction of any Holder,
                                unless such Holder shall have provided to the
                                Guarantee Trustee such security and indemnity
                                reasonably satisfactory to the Guarantee
                                Trustee, against the costs, expenses (including
                                reasonable attorneys' fees and expenses) and
                                liabilities that might be incurred by it in
                                complying with such request or direction,
                                including such reasonable advances as may be
                                requested by the Guarantee Trustee; provided
                                that, nothing contained in this Section
                                3.2(a)(v) shall be taken to relieve the
                                Guarantee Trustee, upon the occurrence of an
                                Event of Default, of its obligation to exercise
                                the rights and powers vested in it by this
                                Guarantee Agreement.

                        (vi)    The Guarantee Trustee shall not be bound to make
                                any investigation into the facts or matters
                                stated in any resolution, certificate,
                                statement, instrument, opinion, report, notice,
                                request, direction, consent, order, bond,
                                debenture, note, other evidence of indebtedness
                                or other paper or document, but the Guarantee
                                Trustee, in its discretion, may make such
                                further inquiry or investigation into such facts
                                or matters as it may see fit.

                        (vii)   The Guarantee Trustee may execute any of the
                                trusts or powers hereunder or perform any duties
                                hereunder either directly or by or

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<PAGE>

                                through agents, attorneys, custodians or
                                nominees, and the Guarantee Trustee shall not be
                                responsible for any misconduct or negligence on
                                the part of any such agent, attorney, custodian
                                or nominee appointed with due care by it
                                hereunder.

                        (viii)  Any action taken by the Guarantee Trustee or its
                                agents hereunder shall bind the Holders, and the
                                signature of the Guarantee Trustee or its agents
                                alone shall be sufficient and effective to
                                perform any such action. No third party shall be
                                required to inquire as to the authority of the
                                Guarantee Trustee to so act or as to its
                                compliance with any of the terms and provisions
                                of this Guarantee Agreement, both of which shall
                                be conclusively evidenced by the Guarantee
                                Trustee's or its agent's taking such action.

                        (ix)    Whenever in the administration of this Guarantee
                                Agreement the Guarantee Trustee shall deem it
                                desirable to receive instructions with respect
                                to enforcing any remedy or right or taking any
                                other action hereunder, the Guarantee Trustee
                                (A) may request instructions from the Holders of
                                a Majority in liquidation preference of the
                                Preferred Securities, (B) may refrain from
                                enforcing such remedy or right or taking such
                                other action until such instructions are
                                received, and (C) shall be protected in acting
                                in accordance with such instructions.

                (b)     No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

        Section 3.3     Indemnity

        The Guarantor agrees to indemnify the Guarantee Trustee and its
officers, directors, employees and agents for, and to hold them harmless
against, any loss, liability, claim, damage or expense incurred without
negligence, bad faith or willful misconduct on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder and including the
reasonable fees and expenses of its counsel. The Guarantee Trustee will not
claim or exact any lien or charge on any Guarantee Agreement as a result of any
amount due to it under this Guarantee Agreement.

        The provisions of this Section 3.3 shall survive the termination of this
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.

                                       10

<PAGE>

                                   ARTICLE IV.
                                GUARANTEE TRUSTEE

        Section 4.1     Guarantee Trustee; Eligibility

                (a)     There shall at all times be a Guarantee Trustee which
shall:

                        (i)     not be an Affiliate of the Guarantor or the
                                Depositor; and

                        (ii)    be a Person that is eligible pursuant to the
                                Trust Indenture Act to act as such and has a
                                combined capital of at least $50,000,000, and
                                shall be a corporation meeting the requirements
                                of Section 310(c) of the Trust Indenture Act. If
                                such corporation publishes reports of condition
                                at least annually, pursuant to law or to the
                                requirements of the supervising or examining
                                authority, then, for the purposes of this
                                Section 4.1(a)(ii), the combined capital and
                                surplus of such corporation shall be deemed to
                                be its combined capital and surplus as set forth
                                in its most recent report of condition so
                                published.

                (b)     If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).

                (c)     If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.

        Section 4.2     Appointment, Removal and Resignation of Guarantee
Trustees

                (a)     Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

                (b)     The Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.

                (c)     The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.

                (d)     If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an

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<PAGE>

instrument of resignation, the resigning Guarantee Trustee may petition at the
expense of the Guarantor any court of competent jurisdiction for appointment of
a Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.

                                   ARTICLE V.
                                    GUARANTEE

        Section 5.1     Guarantee

        The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert, except the
defense of payment. The Guarantor's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.

        Section 5.2     Waiver of Notice and Demand

        The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

        Section 5.3     Obligations Not Affected

        The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

                (a)     the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;

                (b)     the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension of
any interest payment period on the Debentures or so provided by the Indenture);

                (c)     any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;

                                       12

<PAGE>

                (d)     the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;

                (e)     any invalidity of, or defect or deficiency in, the
Preferred Securities; or

                (f)     any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.

        There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.

        Section 5.4     Rights of Holders

        The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may, to the extent permitted by law,
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer or any other Person. The
Guarantor waives any right or remedy to require that any action on this
Guarantee Agreement be brought first against the Issuer or any other Person or
entity before proceeding directly against the Guarantor.

        Section 5.5     Guarantee of Payment

        This Guarantee creates a guarantee of payment and not of collection.
This Guarantee Agreement will not be discharged except by payment of the
Guarantee Payments in full (without duplication of amounts theretofore paid by
the Issuer) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.

        Section 5.6     Subrogation

        The Guarantor shall be subrogated to all rights, if any, of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Guarantee Agreement; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.

                                       13

<PAGE>

        Section 5.7     Independent Obligations

        The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.

        Section 5.8     Net Payments

        All Guarantee Payments required to be made hereunder shall be made by
the Guarantor without withholding or deduction at source for, or on account of,
any present or future taxes, fees, duties, assessments or governmental charges
of whatever nature imposed or levied by or on behalf of the Islands of Bermuda
or such other jurisdiction in which the Guarantor (or any of its successors
under the Guarantee Agreement) may be organized (each, a "taxing jurisdiction")
or any political subdivision or taxing authority thereof or therein, unless such
taxes, fees, duties, assessments or governmental charges are required to be
withheld or deducted by (i) the laws (or any regulations or ruling promulgated
thereunder) of a taxing jurisdiction or any political subdivision or taxing
authority thereof or therein or (ii) an official position regarding the
application, administration, interpretation or enforcement of any such laws,
regulations or rulings (including, without limitation, a holding by a court of
competent jurisdiction or by a taxing authority in a taxing jurisdiction or any
political subdivision thereof). If a withholding or deduction at source is
required, the Guarantor shall, subject to certain limitations and exceptions set
forth below, pay to the Holder of any Preferred Security such Additional Amounts
as may be necessary so that every Guarantee Payment made to such Holder, after
such withholding or deduction, shall not be less than the amount provided for in
this Guarantee Agreement to be then due and payable; provided, however, that the
Guarantor shall not be required to make payment of such Additional Amounts for
or on account of:

        (1)     any tax, fee, duty, assessment or governmental charge of
                whatever nature which would not have been imposed but for the
                fact that such Holder: (A) was a resident, domiciliary or
                national of, or engaged in business or maintained a permanent
                establishment or was physically present in, the relevant taxing
                jurisdiction or any political subdivision thereof or otherwise
                had some connection with the relevant taxing jurisdiction other
                than by reason of the mere ownership of, or receipt of payment
                under, such Preferred Security; (B) presented, where
                presentation is required, such Preferred Security for payment in
                the relevant taxing jurisdiction or any political subdivision
                thereof, unless such Preferred Security could not have been
                presented for payment elsewhere; or (C) presented, where
                presentation is required, such Preferred Security more than
                thirty (30) days after the date on which the payment in respect
                of such Preferred Security first became due and payable or
                provided for, whichever is later, except to the extent that the
                Holder would have been entitled to such Additional Amounts if it
                had presented such Preferred Security for payment on any day
                within such period of thirty (30) days;

                                       14

<PAGE>

        (2)     any estate, inheritance, gift, sale, transfer, personal property
                or similar tax, assessment or other governmental charge;

        (3)     any tax, assessment or other governmental charge that is imposed
                or withheld by reason of the failure by the Holder or the
                beneficial owner of such Preferred Security to comply with any
                reasonable request by the Guarantor or the Trust addressed to
                the Holder within 90 days of such request (A) to provide
                information concerning the nationality, residence or identity of
                the Holder or such beneficial owner or (B) to make any
                declaration or other similar claim or satisfy any information or
                reporting requirement, which is required or imposed by statute,
                treaty, regulation or administrative practice of the relevant
                taxing jurisdiction or any political subdivision thereof as a
                precondition to exemption from all or part of such tax,
                assessment or other governmental charge;

        (4)     any withholding or deduction required to be made pursuant to any
                EU Directive on the taxation of savings implementing the
                conclusions of the ECOFIN Council meetings of 26-27 November
                2000, 3 June 2003 or any law implementing or complying with, or
                introduced in order to conform to, such EU Directive; or

        (5)     any combination of items (1), (2), (3) and (4);

nor shall Additional Amounts be paid with respect to any Guarantee Payment to
any Holder who is a fiduciary or partnership or other than the sole beneficial
owner of the related Preferred Security, but only to the extent such payment
would be required by the laws of the relevant taxing jurisdiction (or any
political subdivision or relevant taxing authority thereof or therein) to be
included in the income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to such Additional Amounts had it been
the Holder of such Preferred Security.

                                   ARTICLE VI.
                       LIMITATION OF TRANSACTIONS; RANKING

        Section 6.1     Limitation of Transactions

        The Guarantor hereby covenants and agrees that, so long as any Preferred
Securities remain outstanding, it will not, and will not permit any of its
Subsidiaries to, (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the outstanding capital shares of the Guarantor or (b) make any payment of
principal of, interest or premium, if any, on or repay, repurchase or redeem any
debt security of the Guarantor that ranks junior in interest to the Debentures
or the guarantee in respect thereof, as the case may be, or make any guarantee
payments with respect to any guarantee by the Guarantor of the debt securities
of any Subsidiary of the Guarantor if such guarantee ranks junior in interest to
the Debentures or the guarantee in respect thereof, as the case may be (other
than (i) dividends or distributions in Common Shares (as defined in the
Indenture) of the Guarantor, (ii) redemptions or purchases of any rights
outstanding under a shareholder rights plan of the Guarantor or the declaration
of a dividend of such rights or the issuance of stock or shares under such plans
in the future, (iii) payments under any preferred securities guarantee, and

                                       15

<PAGE>

(iv) purchases of Common Shares related to the issuance of Common Shares under
any benefit plans of the Guarantor for its directors, officers or employees) if
at such time (1) there shall have occurred any event of which the Guarantor has
actual knowledge that (A) with the giving of notice or the lapse of time or
both, would constitute an Event of Default under the Indenture and (B) in
respect of which the Guarantor, as the case may be, shall not have taken
reasonable steps to cure, (2) the Guarantor shall be in default with respect to
its payment of any obligations under this Guarantee Agreement or (3) the
Guarantor shall have given notice of its election to begin an Extension Period
(as defined in the Indenture) with respect to the Debentures as provided in the
Indenture and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.

        Section 6.2     Ranking

        This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Guarantor. The obligations of the Guarantor hereunder do not
constitute Senior Indebtedness of the Guarantor.

        Section 6.3     Pari Passu Guarantees

        This Guarantee Agreement shall rank pari passu with the Expense
Agreement (as defined in the Trust Agreement) and any similar Guarantee
Agreements issued by the Guarantor on behalf of holders of preferred securities
of any trust, partnership or other entity affiliated with the Guarantor which is
a financing vehicle of the Guarantor or any Affiliate of the Guarantor in
connection with the issuance by such entity of preferred securities or other
securities which are similar to preferred securities that are guaranteed by the
Guarantor pursuant to an instrument that ranks pari passu with or junior in
right of payment to this Guarantee Agreement.

                                  ARTICLE VII.
                                   TERMINATION

        Section 7.1     Termination

        This Guarantee shall terminate and be of no further force and effect
upon (i) full payment of the Redemption Price of all Preferred Securities, (ii)
the distribution of the Debentures to all Holders in exchange for the Preferred
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to the Preferred Securities or under this Guarantee Agreement.

                                  ARTICLE VIII.
                                  MISCELLANEOUS

        Section 8.1     Successors and Assigns

        All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a

                                       16

<PAGE>

consolidation, merger, or sale involving the Guarantor that is permitted under
Article [ ] of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.

        Section 8.2     Amendments

        Except with respect to any changes that do not adversely affect the
rights of Holders in any material respect (in which case no consent of Holders
will be required), this Guarantee Agreement may only be amended in writing by
the parties hereto with the prior approval of the Holders of at least a Majority
in liquidation preference of the Preferred Securities. The provisions of
[          ] of the Trust Agreement concerning meetings of Holders apply to the
giving of such approval.

        Section 8.3     Notices

        Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class mail, as
follows:

                (a)     If given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Guarantor and the Holders):

                        [            ]

                (b)     If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders):

                        Montpelier Re Holdings Ltd.
                        Mintflower Place
                        8 Par-La-Ville Road
                        Hamilton HM 08
                        Bermuda
                        Attention: [            ]

                with a copy to:

                        LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                        125 West 55th Street
                        New York, New York 10019
                        Attention: [        ]

                (c)     If given to the Issuer, in care of the Guarantee
Trustee, at the Issuer's (and the Guarantee Trustee's) address set forth below
or such other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:

                        MRH Capital Trust I
                        c/o Montpelier Re Holdings Ltd.

                                       17

<PAGE>

                        Mintflower Place
                        8 Par-La-Ville Road
                        Hamilton HM 08
                        Bermuda
                        Attention: [            ]

                with a copy to:

                        LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                        125 West 55th Street
                        New York, New York 10019
                        Attention: [            ]

                (d)     If given to any Holder, at the address set forth on the
books and records of the Issuer.

        All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

        Section 8.4     Benefit

        This Guarantee is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.

        Section 8.5     Governing Law

        THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND PERFORMED IN THAT STATE.

        Section 8.6     Interpretation

        In this Guarantee, unless the context otherwise requires:

                (a)     capitalized terms used in this Guarantee Agreement, but
not defined in the preamble hereto have the respective meanings assigned to them
in this Section 1.1 or in the Trust Agreement, as the case may be;

                (b)     a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;

                (c)     all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;

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<PAGE>

                (d)     all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement, unless
otherwise specified;

                (e)     a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement, unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;

                (f)     a reference to the singular includes the plural and vice
versa; and

                (g)     the masculine, feminine, or neuter genders used herein
shall include the masculine, feminine and neuter genders.

        Section 8.7     Submission to Jurisdiction

        The Guarantor agrees that any judicial proceedings instituted in
relation to any matter arising under this Guarantee Agreement may be brought in
any United States Federal or New York State court sitting in the Borough of
Manhattan, The City of New York, New York to the extent that such court has
subject matter jurisdiction over the controversy, and, by execution and delivery
of this Guarantee Agreement, the Guarantor hereby irrevocably accepts, generally
and unconditionally, the jurisdiction of the aforesaid courts, acknowledges
their competence and irrevocably agrees to be bound by any judgment rendered in
such proceeding. The Guarantor also irrevocably and unconditionally waives for
the benefit of the Guarantee Trustee and the Holders any immunity from
jurisdiction and any immunity from legal process (whether through service or
notice, attachment prior to judgment, attachment in the aid of execution,
execution or otherwise) in respect of this Guarantee Agreement. The Guarantor
hereby irrevocably designates and appoints for the benefit of the Guarantee
Trustee and the Holders for the term of this Guarantee Agreement [           ],
as its agent to receive on its behalf service of all process (with a copy of all
such service of process to be delivered to LeBoeuf, Lamb, Greene & MacRae,
L.L.P., 125 West 55th Street, New York, New York 10019, Attention:
[           ]) brought against it with respect to any such proceeding in any
such court in The City of New York, such service being hereby acknowledged by
the Guarantor to be effective and binding service on it in every respect whether
or not the Guarantor shall then be doing or shall have at any time done business
in New York. Such appointment shall be irrevocable so long as any of the
Preferred Securities or the obligations of the Guarantor hereunder remain
outstanding, or until the appointment of a successor by the Guarantor and such
successor's acceptance of such appointment. Upon such acceptance, the Guarantor
shall notify the Guarantee Trustee in writing of the name and address of such
successor. The Guarantor further agrees for the benefit of the Guarantee Trustee
and the Holders to take any and all action, including the execution and filing
of any and all such documents and instruments, as may be necessary to continue
such designation and appointment of said [Agent Name] in full force and effect
so long as any of the Preferred Securities or the obligations of the Guarantor
hereunder shall be outstanding. The Guarantee Trustee shall not be obligated and
shall have no responsibility with respect to any failure by the Guarantor to
take any such action. Nothing herein shall affect the right to serve process in
any other manner permitted by any law or limit the right of the Guarantee
Trustee or any Holder to institute proceedings against the Guarantor in the
courts of any other jurisdiction or jurisdictions.

                                       19

<PAGE>

        Section 8.8     Judgment Currency

        The Guarantor agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of any Guarantee
Payment (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Guarantee Trustee
could purchase in The City of New York the requisite amount of the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which a final unappealable judgment is given and (b) its obligations
under this Guarantee Agreement to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Guarantee Agreement. For purposes of
the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or
a legal holiday in The City of New York or a day on which banking institutions
in The City of New York are authorized or obligated by law, regulation or
executive order to be closed.

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<PAGE>

        THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

                                        MONTPELIER RE HOLDINGS LTD.,
                                         as Guarantor

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:


[SEAL]
                                        [                       ],
                                         as Guarantee Trustee

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:

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