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                                                                   Exhibit 99.03

                                                            Company's Prospectus
                                                                  April 22, 1996
                                                                 Pages 90 and 91




A number of cases have been filed against several insurance companies and
industry organizations relating to service fee charges and premium calculations
on certain workers' compensation insurance. Certain subsidiaries of the Company
are defendants in South Carolina ex rel. Medlock v. National Council on
Compensation Insurance ("NCCI"), an action filed by the Attorney General of
South Carolina in August 1994 in the Court of Common Pleas, County of
Greenville, South Carolina; Four Way Plant Farm v. NCCI, a purported class
action filed in September 1994 in the Circuit Court for Bullock County, Alabama;
and NC Steel, Inc. v. NCCI, a purported class action filed in November 1993 in
the Superior Court Division of the General Court of Justice, Wake County, North
Carolina. In these cases, the plaintiffs generally allege that the
administration of each state's workers' compensation assigned risk pool
conspired with servicing carriers for the pool to collect excessive fees in
violation of state antitrust and/or unfair trade practice laws. The plaintiffs
seek unspecified compensatory, treble and/or punitive damages and injunctive
relief. The Company believes it has meritorious defenses and intends to contest
the allegations. In NC Steel, Inc. v. NCCI, the defendants' motion to dismiss
was granted in February 1995, and the plaintiffs have appealed to the North
Carolina Court of Appeals. In April 1994, certain subsidiaries of [the Company]
were named as additional defendants in a purported class action pending in the
116th District of Dallas County, Texas, entitled Weatherford Roofing Company v.
Employers National Insurance Company. The plaintiffs in this case allege that
the workers' compensation carriers in Texas have conspired to collect excessive
or improper premiums in violation of state insurance laws, antitrust laws and/or
state unfair trade practices laws. The plaintiffs seek compensatory, treble
and/or punitive damages as well as declaratory and injunctive relief. In a
statutory demand letter, plaintiffs' counsel allege classwide compensatory
damages, including interest through October 1994, of approximately $572 million.
Since that time, court-approved settlements with certain other insurers have
been based on single damage, or alleged overcharge, calculations which, if
applied to Company-issued policies of class members, would yield single damages
of $50 million or less. The Company believes it has meritorious defenses and
intends to contest the allegations unless an attractive settlement opportunity
arises.
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                                                             Company's Form 10-Q
                                                                   June 30, 1996
                                                                         Page 24


For information concerning actions filed against several insurance companies and
industry organizations relating to service fee charges and premium calculations
on certain workers' compensation insurance, see the description that appears in
the paragraph beginning on page 90 and continuing on page 91 of the Company's
Prospectus dated April 22, 1996, which description is incorporated by reference
herein. A copy of the pertinent paragraph of such filing is included as an
exhibit to this Form 10-Q. Two of such actions, Four Way Plant Farm v. NCCI and
Weatherford Roofing Company v. Employees National Insurance Company, have been
settled, subject to approval of the court. In another such action, NC Steel,
Inc. v. NCCI, the North Carolina Court of Appeals affirmed the trial court's
dismissal in part, reversed in part and remanded for further proceedings.
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                                                             Company's Form 10-Q
                                                             September 30, 1996
                                                             Page 25

ITEM 1.       LEGAL PROCEEDINGS.

For information concerning actions filed against several insurance companies and
industry organizations relating to service fee charges and premium calculations
on certain workers' compensation insurance, see the descriptions that appear in
the paragraph that begins on page 90 and ends on page 91 of the Company's
Prospectus dated April 22, 1996, and in the first paragraph on page 24 of the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996,
which descriptions are incorporated by reference herein. A copy of the pertinent
paragraphs of such filings is included as an exhibit to this Form 10-Q. In
October 1996, certain subsidiaries of the Company were named as defendants in a
purported class action filed in the District Court of Wyandotte County, Kansas,
Civil Court Department under the name Amundson & Associates Art Studio Ltd. v.
NCCI, et al. The plaintiffs make allegations and seek damages that are similar
to those in the cases referred to above.