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                                                                 EXHIBIT 10.56

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                               SECURITY AGREEMENT

                           Dated as of November 27, 2002

                                     between

                            PLATINUM RE (UK) LIMITED,
                                   as Debtor,

                                       and

                      ST. PAUL REINSURANCE COMPANY LIMITED,
                                as Secured Party

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                  THIS SECURITY AGREEMENT (this "Agreement"), dated as of
November 27, 2002, is made and entered into by and between PLATINUM RE (UK)
LIMITED, a company incorporated in the United Kingdom (the "Debtor"), and ST.
PAUL REINSURANCE COMPANY LIMITED, a company incorporated in the United Kingdom
(the "Secured Party").

                             PRELIMINARY STATEMENTS

         1.       The Debtor and the Secured Party entered into that certain
100% Quota Share Retrocession Agreement (Traditional), dated as of November 27,
2002 (as such agreement may be amended, modified or supplemented from time to
time, the "Retrocession Agreement").

         2.       The Debtor and the Secured Party have appointed the Custodian
(as hereinafter defined) to hold the Collateral (as hereinafter defined) as
collateral agent and securities intermediary on behalf of the Secured Party
pursuant to that certain Control Agreement, dated as of November 27, 2002 among
the Debtor, the Custodian and the Secured Party (the "Control Agreement"). The
Debtor has also appointed the Investment Adviser (as hereinafter defined) to
give advice from time to time in relation to the investment of such Collateral
pursuant to that certain Discretionary Investment Advisory Agreement, dated as
of November 27, 2002 among the Debtor and the Investment Adviser (the
"Investment Advisory Agreement").

         3.       The parties hereto desire to enter into this Agreement, among
other things, to grant to the Secured Party a continuing security interest in
and to all of the Collateral as security for the Obligations (as hereinafter
defined).

         4.       This Agreement is being entered into pursuant to the terms of
subsection (iv) of Section "Security" of the Retrocession Agreement.

                  NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  Section 1.01      Definitions.

                  (a)      For all purposes of this Agreement capitalized terms
used and not defined herein shall have the meanings assigned to such terms in
the Retrocession Agreement, the Control Agreement and the Investment Advisory
Agreement (such meanings to be equally applicable to both the singular and
plural forms of the terms defined) and all references in this Agreement to
Sections are to Sections of this Agreement unless specified otherwise.

                  (b)      Except for the terms defined in this Agreement, the
Retrocession Agreement, the Control Agreement or the Investment Advisory
Agreement all terms defined in

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Article 8 or 9 of the UCC which are used in this Agreement shall have the
meaning specified in such Articles.

                  (c)      As used in this Agreement, the following terms shall
have the following meanings:

                  "Collateral" has the meaning assigned to that term in Section
2.01(a).

                  "Collateral Accounts" mean Deposit Account and Securities
Account.

                  "Control Agreement" has the meaning assigned to that term in
the Preliminary statements.

                  "Custodian" means State Street Bank and Trust Company, a
Massachusetts trust company, as Custodian for the Debtor pursuant to the
Custodian Agreement, or such other custodian as the Debtor may from time to
time appoint with the prior written consent of the Secured Party.

                  "Custodian Lien" means the lien on the Collateral Accounts in
favor of the Custodian created pursuant to the Control Agreement.

                  "Custodian Agreement" means that certain Custodian and
Investment Accounting Agreement dated as of November 1, 2002 among the
Custodian, the Debtor and certain related parties, as amended or supplemented
from time to time.

                  "Deposit Account" means the separate, segregated Deposit
Account listed on Schedule I hereto and any other deposit accounts and
sub-accounts which are established by the Custodian under, and subject to, the
Control Agreement.

                  "Distributions" means, with respect to Collateral, all
interest, income and other payments and distributions of cash or other property
in the nature of income with respect to that Collateral Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Collateral.

                  "Ending Asset Value" has the meaning assigned to that term in
Section 3.02(a).

                  "Ending Reserves" has the meaning assigned to that term in
Section 3.02(a).

                  "Excess Reserves" has the meaning assigned to that term in
Section 3.02(b).

                  "Event of Default" means a failure by the Debtor to pay any
amount due under the Retrocession Agreement within 90 days of the due date for
payment.

                  "Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

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                  "Insolvency Event" means any one or more of the following: (a)
the Debtor becomes unable or admits inability to pay its debts as they fall due,
or (b) the appointment of an administrator, receiver manager or administrative
receiver with respect to any of the assets or undertaking of the Debtor, or (c)
the presentation of any petition or making of any order for the administration
or winding up of the Debtor or the taking of any other step in insolvency
proceedings with respect to the Debtor, or (d) the grant of any moratorium in
respect of the indebtedness of the Debtor or the entry into or proposal by the
Debtor of any composition or compromise with its creditors.

                  "Investment Adviser" means Alliance Capital Management L.P. or
such other investment adviser as the Debtor may from time to time appoint with
the prior written consent of the Secured Party.

                  "Investment. Advisory Agreement" has the meaning assigned to
that term in the Preliminary Statements.

                  "Investment Guidelines" has the meaning assigned to that term
in the Investment Advisory Agreement.

                  "Local Business Day" means:

                  (a)      in relation to a transfer of cash or other property
(other than securities) under this Agreement, a day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in the place where the relevant account is located and, if
different, in the principal financial center, if any, of the currency of such
payment;

                  (b)      in relation to a transfer of securities under this
Agreement, a day on which the clearance system agreed between the parties for
delivery of the securities is open for the acceptance and execution of
settlement instructions or, if delivery of the securities is contemplated by
other means, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in. the place(s)
agreed between the parties for this purpose;

                  (c)      in relation to a valuation under this Agreement, a
day on which commercial banks are open for business (including dealings in
foreign exchange and foreign currency deposits) in the place of location of the
Custodian and in the place(s) agreed between the parties for this purpose; and

                  (d)      in relation to any notice or other communication
under this Agreement, in the place specified in the address for notice most
recently provided by the recipient.

                  "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.

                  "Notice of Exclusive Control" has the meaning assigned to that
term in the Control Agreement.

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                  "Obligations" means all present and future obligations from
time to time of the Debtor under the Retrocession Agreement and this Agreement,
including but not limited to obligations relating to (a) reinsured losses and
allocated loss expenses paid by the Secured Party, but not recovered from the
Debtor, (b) reserves for reinsured losses reported and outstanding, (c) reserves
for reinsured losses incurred but not reported, and (d) reserves for allocated
reinsured loss expenses and unearned premiums.

                  "Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government -or any political
subdivision or agency thereof.

                  "Proceeds" has the meaning assigned to that term in Section
9-102(a)(64) of the UCC and, in any event, shall include, without limitation,
the following property: (i) whatever is acquired upon the sale, lease, license,
exchange, or other disposition of the Collateral, (ii) whatever is collected on,
or distributed on account of, the Collateral (iii) rights arising out of the
Collateral, (iv) to the extent of the value of collateral, claims arising out of
the loss, nonconformity, or interference with the use of, defects or
infringement of rights in, or damage to, the Collateral, or (v) to the extent of
the value of collateral and to the extent payable to the Debtor or the Secured
Party, insurance payable by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the Collateral.

                  "Property" means, with respect to any Person, any money, cash,
cash equivalents, securities, investments, financial assets, security
entitlements or other investment property.

                  "Qualifying Assets" means and includes any security that
conforms with the criteria set forth in the Investment Guidelines.

                  "Reinsurance Contracts" has the meaning assigned to that term
in the Retrocession Agreement.

                  "Relevant Event" means any one or more of the following: (a)
an Event of Default, or (b) the Debtor's failure to perform or otherwise comply
or procure compliance with any of its obligations under the Retrocession
Agreement, other than a failure constituting an Event of Default, if such
failure continues for five Local Business Days after receiving from the Secured
Party a written notice thereof, or (c) the Debtor's failure to perform or
otherwise comply with any of its obligations under this Agreement, or (d) any
Insolvency Event, or (e) the Investment Adviser's failure to comply with any
investment objectives, policies and restrictions as in effect from time to time
under the Investment Advisory Agreement, or (f) the Custodian's failure to
perform or otherwise comply with any of its obligations under the Control
Agreement, or (g) the Custodian's failure to perform or otherwise comply with
any of its obligations under the Custodian Agreement, if such failure impairs
the security interest granted to the Secured Party under this Agreement.

                  "Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and all Federal, state, local and foreign laws, rules and
regulations, the rules of the National Association of

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Securities Dealers and all orders, judgments, decrees or other determinations of
any Governmental Authority or arbitrator, applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

                  "Retrocedant Ceding Commission" has the meaning assigned to
that term in the Retrocession Agreement.

                  "Retrocession Agreement" has the meaning assigned to that term
in the Preliminary Statements.

                  "Securities Account" means the separate, segregated Securities
Account listed on Schedule I hereto and any other securities accounts and
sub-accounts which are established by the Custodian under, and subject to, the
Control Agreement.

                  "Settlement Day" means, in relation to a date, (i) with
respect to a transfer of cash or other property (other than securities), the
next Local Business Day and (ii) with respect to a transfer of securities, the
first Local Business Day after such date on which settlement of a trade in the
relevant securities, if effected on such date, would have been settled in
accordance with customary practice when settling through the clearance system
agreed between the parties for delivery of such securities or, otherwise, on the
market in which such securities are principally traded (or, in either case, if
there is no such customary practice, on the first Local Business Day after such
date on which it is reasonably practicable to deliver such securities).

                  "Substitute Credit Support" has the meaning assigned to that
term in Section 3.06(a).

                  "Substitution Notice" has the meaning assigned to that term in
Section 3.06(a).

                  "UCC" means the Uniform Commercial Code as in effect from time
to time in the Commonwealth of Massachusetts. All terms used herein without
definitions that are defined in the UCC shall have the respective meanings given
to those terms in the UCC, except where the context otherwise requires.

                  "USD" means United States Dollars.

                                   ARTICLE II

                                SECURITY INTEREST

                  Section 2.01 Grant of Security Interest, (a) The Debtor hereby
assigns, pledges, conveys, sets over and transfers unto the Secured Party, and
does hereby grant to the Secured Party, a continuing first priority security
interest (subject to the Custodian Lien) in all of the right, title and interest
of the Debtor in, to and under all of the following, whether now existing or
hereafter from time to time acquired (collectively, the "Collateral"):

                           (i)      the Deposit Account, including any credit or
         other balances of account credited thereto or carried therein or other
         amounts transferred thereto;

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                           (ii)     the Securities Account, including any credit
         or other balances of account credited thereto or carried therein or
         other amounts transferred thereto;

                           (iii)    "all Qualifying Assets, all other Property
         transferred or required to be transferred from time to time in, or
         credited to or required to be credited from time to time to, the
         Collateral Accounts; provided, however, that, except as expressly
         provided in Section 4.04, Distributions shall not constitute
         Collateral;

                           (iv)     all rights, claims and causes of action, if
         any, that the Debtor may have against any Person in respect of the
         foregoing; and

                           (v)      all Proceeds of any or all of the other
         Collateral.

                  (b)      The Debtor agrees that this Agreement, the security
interest granted pursuant to this Agreement and all rights, remedies, powers
and privileges provided to the Secured Party under this Agreement are in
addition to and not in any way affected or limited by any other security now or
at any time held by the Secured Party to secure payment and performance of the
Obligations.

                  Section 2.02 Security for Obligations. The Collateral secures
the prompt and complete payment and performance of all the Obligations.

                  Section 2.03 Continued Perfection of Security Interest. This
Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment and performance in full
of the Obligations. The security interest created under this Agreement shall not
be impaired by any intermediate payment or performance of the whole or any part
of the Obligations but shall secure the ultimate balance of the Obligations. The
Debtor agrees that it will not take any actions or fail to perform any of its
duties or obligations under this Agreement so that after giving effect to such
action or inaction the Secured Party will then, or with the passage of time,
cease to have a first priority perfected security interest (subject to the
Custodian Lien) in any of the Collateral; provided, however, that investments,
cash, securities, interest, dividends, financial assets or any other Property
withdrawn from the Collateral Accounts in accordance with Section 3.02(b),
3.06(b), 4.03(a) or 6.01 shall not be Collateral from and after the time of such
withdrawal.

                  Section 2.04 Power of Attorney. The Debtor hereby irrevocably
appoints the Secured Party as its attorney-in-fact with right of substitution,
so that the Secured Party or any other Person empowered by the Secured Party
shall be authorized, without need of further authorization from the Debtor, at
any time upon the occurrence of and during the continuance of any Relevant
Event, in the Secured Party's discretion to take any and all actions authorized
or permitted to be taken by the Secured Party under this Agreement or by law,
including but not limited to the power to:

                           (a)      take any action and execute or otherwise
                  authenticate any instrument or other record which the Secured
                  Party may deem necessary or advisable to accomplish the
                  purposes of this Agreement, including but not

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                  limited to, perfection of the security interest created under
                  this Agreement in any jurisdiction in any part of the world;

                           (b)      execute any transfer, bill of sale or other
                  assurance in respect of the Collateral;

                           (c)      exercise all the rights and powers of the
                  Debtor in respect of the Collateral;

                           (d)      ask for, demand, collect, sue for, recover,
                  receive and give acquittance and receipts for moneys due and
                  to become due under or in connection with the Collateral;

                           (e)      receive, indorse, and collect any drafts or
                  other instruments, documents and chattel paper, in connection
                  therewith; and

                           (f)      file any claims or take any action or
                  institute any proceedings which the Secured Party may deem
                  necessary or desirable for the collection of any of the
                  Collateral or otherwise to enforce the rights of the Secured
                  Party with respect to any of the Collateral.

                  The Debtor hereby confirms and ratifies any and all actions
and things performed or done by the Secured Party as the Debtor's
attorney-in-fact or any of its representatives in each case pursuant to the
powers granted hereunder.

                  This special power of attorney shall be deemed coupled with an
interest, and cannot be revoked by the Debtor until all of the Obligations have
been paid and performed in full and the Retrocession Agreement has been
terminated.

                                   ARTICLE III

                           CREDIT SUPPORT OBLIGATIONS

                  Section 3.01 Initial Deposit of Collateral. On the date of
this Agreement, the Debtor is transferring, or causing to be transferred, into
the Collateral Accounts Qualifying Assets having a fair market value as at the
date of this Agreement at least equal to 100% of the premia ceded by the Secured
Party to the Debtor under the Retrocession Agreement.

                  Section 3.02 Excess Reserves. (a) As of the end of each
calendar quarter, the Debtor shall calculate the fair market value of the Assets
held in the Collateral Accounts as of the last day of such quarter (such amount,
the "Ending Asset Value") and the aggregate loss, loss adjustment expense
reserves, unearned premium reserves, Retrocedant Ceding Commission and other
reserves related to the Reinsurance Contracts as reflected in Debtor's
management accounts, as of the last day of such quarter (the "Ending Reserves")
and shall provide such calculation to the Secured Party within forty-five days
of the end of such quarter.

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                  (b)      The excess of the Ending Reserves over the Ending
Asset Value, if any, shall be the "Excess Reserves". To the extent the Ending
Reserves exceed the Ending Asset Value, the Debtor shall within 3 Local Business
Days deposit sufficient Qualifying Assets with a fair market value equal to such
Excess Reserves. To the extent the Ending Asset Value exceeds the Ending
Reserves, the Secured Party shall upon the Debtor's request, join the Debtor in
instructing the Custodian to release Collateral with a fair market value equal
to the amount of such excess, provided, however, that no Relevant Event has
occurred and is continuing.

                  Section 3.03 Disputed Calculations or Valuations. Upon receipt
of the quarterly calculation from the Debtor, the Secured Party shall have the
right to reasonably object to such calculation and to offer a reasonable
proposal for the amount of the reserves described in Section 3.02 hereof. If the
parties in good faith are not able to resolve the disagreement within two weeks
of the Secured Party's indication of disagreement, the parties shall mutually
agree upon an independent actuarial firm to determine an appropriate level of
aggregate reserves as described in Section 3.02 hereof with respect to the
Reinsurance Contracts, such level to be no more than the amount proposed by the
Secured Party and no less than the amount reported by the Debtor, and both
parties agree to be bound by such determination. In such case the Debtor shall
deposit sufficient Qualifying Assets with a fair market value equal to Excess
Reserves (if any) within 3 Local Business Days after receipt of the actuary
report. The fees and expenses of the actuarial firm shall be shared equally by
the Debtor and the. Secured Party.

                  Section 3.04 Transfers. Subject to Section 3.03 and unless
otherwise agreed between the parties from time to time, if an obligation to
transfer Qualified Assets or Collateral has become due by the Notification Time,
then the relevant transfer will be made not later than the close of business on
the Settlement Day relating to the date such obligation has become due; if an
obligation becomes due after the Notification Time, then the relevant transfer
will be made not later than the close of business on the Settlement Day relating
to the day after the date such obligation became due.

                  Section 3.05 Calculations. The parties agree that valuations
calculated by the Debtor or, as the case may be, by the Secured Party for the
purpose of this Agreement shall prevail over any valuations performed by or for
the Investment Adviser pursuant to the terms of the Investment Advisory
Agreement.

                  Section 3.06 Substitutions.

                  (a)      The Debtor (acting, where applicable, through the
Investment Adviser) may on any Local Business Day by notice (a "Substitution
Notice") inform the Secured Party and the Custodian that it wishes to substitute
the Qualified Assets specified in that Substitution Notice (the "Substitute
Credit Support") for certain Qualified Assets specified in the Substitution
Notice and held in the Collateral Accounts (the "Original Credit Support").

                  (b)      Following the service of such Substitution Notice,
the Original Credit Support shall be released, upon written instructions by the
Debtor, to the Debtor against delivery of the Substitute Credit Support (or an
undertaking for such delivery) in accordance

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with the customary settlement procedures; provided, however, that no Relevant
Event has occurred and is continuing.

                                   ARTICLE IV

                                   COLLATERAL

                  Section 4.01 No Duty. Except to the extent otherwise required
by applicable law, the Secured Party will have no duty with respect to
Collateral, including, without limitation, any duty to collect any
Distributions, or enforce or preserve any rights pertaining to Collateral.

                  Section 4.02 Custodians.

                  (a)      The Debtor shall appoint the Custodian to hold
Collateral in accordance with the Control Agreement, and the Debtor shall cause
all such Collateral to be transferred to, and held by. the Custodian.

                  (b)      The Debtor shall be liable for the acts or omissions
of the Custodian and the Investment Adviser to the same extent that the Debtor
would be liable under this Agreement for its own acts or omissions.

                  Section 4.03 Maintenance of Collateral Accounts. In addition
to, and not in limitation or in lieu of, the obligation of Custodian to honor
entitlement orders as provided in the Control Agreement,

                  (a)      the Secured Party agrees that until such time, if
any, that the Secured Party delivers a Notice of Exclusive Control to the
Custodian, the Debtor shall be entitled (i) subject to Section 3.06(b), to give
entitlement orders and all other forms of instructions to invest, through the
Investment Adviser, where applicable, the Collateral held in the Collateral
Accounts solely in cash or categories of securities defined as Qualified Assets,
which upon their acquisition shall constitute the Collateral (ii) subject to
Section 4.04, to receive and give entitlement orders and all other forms of
instructions with respect to all Distributions (subject, where applicable, to
prior deduction by the Custodian of any fees or expenses owed to Custodian by
the Debtor for the provision of its custodial services from time to time), and
(iii) to exercise, or to direct the Custodian to exercise on its behalf, any
voting rights attached to any of the Collateral (but only in a manner consistent
with the terms of this Agreement); provided that the Debtor shall not have the
authority to (x) terminate or close the Collateral Accounts, or (y) sell,
transfer, exchange, assign, lease or hire out, factor, discount, license, lend,
part with its interest in or otherwise dispose of any of the Collateral or
permit the same to occur, or agree to do any of the foregoing, without prior
written consent of the Secured Party, except, in each case, as expressly
permitted under this Agreement. The Secured Party agrees that (i) until a
Relevant Event occurs or unless a Relevant Event would be caused by a proposed
substitution of Collateral by the Debtor, it shall not give entitlement orders,
deliver Notice of Exclusive Control or give any other forms of instructions with
regard to the Collateral Accounts and the financial assets and other Property on
deposit therein or credited thereto (other than joint instructions in accordance
with this Agreement), and (ii) it shall join the Debtor in giving

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instructions requested by or on behalf of the Debtor so long as no Relevant
Event then exists or would be caused by the execution of such instructions.

                  (b)      if at any time the Secured Party delivers a Notice of
Exclusive Control to the Custodian, the Debtor agrees that, from and after
delivery thereof until the written revocation or rescission of such notice by
the Secured Party, (i) the Secured Party shall be the sole Person to give all
entitlement orders and other demands and instructions with respect to the
Collateral Accounts or any financial asset credited thereto or carried therein
or any other Collateral, (ii) if it has received any Collateral from the
Custodian in violation of the terms of the Control Agreement, it shall hold such
Collateral in trust for the Secured Party and shall promptly thereafter deliver
such Collateral to the Secured Party and (iii) it shall execute and deliver, and
use its best efforts to cause the Custodian to execute and deliver, to the
Secured Party all proxies and other instruments as the Secured Party may
reasonably request for the purpose of enabling the Secured Party to exercise any
voting or other consensual rights pertaining to any Collateral. Notice of
Exclusive Control shall be deemed to be revoked or rescinded upon receipt by
the Custodian from the Secured Party of written notice thereof The Secured Party
agrees to deliver a notice of revocation or rescission upon request of the
Debtor at any time when no Relevant Event has occurred or is continuing.

                  Section 4.04 Distributions. Subject, where applicable, to
prior deduction by the Custodian of any fees or expenses owed to the Custodian
by the Debtor for the provision of its custodial services from time to time, the
Custodian shall transfer the Distributions to the Debtor within 10 days
following the end of each calendar month, upon proper written instructions by
the Debtor, to Debtor's custodial account held with the Custodian or any other
account designated by the Debtor; provided, however, that the Secured Party has
not delivered a Notice of Exclusive Control that has not been revoked or
rescinded by the Secured Party, and that a Relevant Event has not occurred and
is continuing. The Secured Party shall execute such instructions, if any, as may
be required to permit such credit to be effected. Any Distributions (or portion
thereof) not transferred pursuant to this Section 4.04 shall constitute
Collateral and will be subject to the security interest granted under Section
2.01(a) or otherwise will be subject to the set-off provided in Section 6.01
(c).

                                    ARTICLE V

                GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

                  The Debtor represents, warrants and covenants, which
representations, warranties and covenants shall be deemed to be repeated as of
each date on which the Debtor transfers, or causes to be transferred, any
Qualified Assets into the Collateral Accounts and shall survive execution and
delivery of this Agreement and the payment in full of the Obligations, as
follows:

                  Section 5.01 Power to Grant Security Interest. The Debtor has
the power to grant a security interest in any Collateral pursuant hereto and has
taken all necessary actions to authorize the granting of that security interest.

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                  Section 5.02 Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect, to
the extent a security interest may be perfected thereby, the security interest
granted by the Debtor to the Secured Party hereby in respect of the Collateral
have been accomplished, and the first priority security interest granted to the
Secured Party pursuant to this Agreement (subject to the Custodian Lien) in and
to the Collateral constitutes a valid first priority perfected security interest
which is superior and prior to the rights of all other Persons (other than the
Custodian Lien) and enforceable against the Debtor (including in Bermuda) and,
in each case, subject to no other Liens, sales, assignments, conveyances,
settings over or transfers.

                  Section 5.03 No Liens. The Debtor is the owner of all
Collateral free from any Lien or other right, title or interest of any Person
(other than the Custodian Lien), and the Debtor shall defend such Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Secured Party.

                  Section 5.04 Other Financing Statements. There is no financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Collateral, and so long as any of the Obligations remain unpaid, the Debtor
will not execute or authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby.

                  Section 5.05 Consents. No consent of any Person and no
authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority of any jurisdiction is required as of the date of the
execution and delivery of this Agreement for (i) the grant by the Debtor of the
pledge, assignment and security interest granted hereby with respect to the
Collateral, (ii) the execution, delivery or performance of this Agreement by the
Debtor, (iii) the pledge, assignment and security interest created hereby with
respect to the Collateral (including the first priority nature of such pledge,
assignment and security interest with respect to the Collateral (subject to the
Custodian Lien)) other than the execution .and delivery of the Control Agreement
and filing of appropriate financing statements or similar filings or
notifications in respect of the Collateral or (iv) the exercise by the Secured
Party of the rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement.

                  (b)      The Debtor shall use its best efforts to obtain after
the date of the execution and delivery of this Agreement such other consents,
authorizations, and approvals and obtain such other actions by, and provide such
notices to or make such filings with, any Governmental Authority of any
jurisdiction as may be, in the reasonable judgment of the Secured Party,
necessary after the date of this Agreement (i) for the grant by the Debtor of
the pledge, assignment and security interest granted hereby or for the
execution, delivery or performance of this Agreement by the Debtor, (ii) for the
pledge, assignment and security interest created hereby with respect to the
Collateral (including the first priority nature of such pledge, assignment and
security interest with respect to the Collateral (subject to the Custodian
Lien)) or (iii) for the exercise by the Secured Party of the rights, remedies
and powers provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement.

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                  Section 5.06 Further Actions. The Debtor will, at its own
expense, make, execute, endorse, acknowledge, or otherwise authenticate and file
and/or deliver to the Secured Party from time to time such confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates and other assurances, instruments or other records, and
take such further steps relating to the Collateral and other property or rights
covered by the interests hereby granted, which the Secured Party, upon written
direction, deems reasonably appropriate or advisable to perfect, preserve or
protect its security interests in the Collateral.

                  Section 5.07 Financing Statements. The Debtor agrees to
execute or otherwise authenticate (if necessary) and deliver to the Secured
Party such financing statements (or similar statement or instrument of
registration under the law of any jurisdiction), in form acceptable to the
Secured Party as it may from time to time reasonably request or as are necessary
or desirable in its reasonable opinion to establish and maintain the security
interests contemplated hereunder as valid, enforceable and first priority
security interests (subject to the Custodian Lien) as provided herein and the
other rights and security contemplated herein, all in accordance with the UCC as
enacted in any and all relevant jurisdictions or any other Requirement of Law.
The Debtor will pay any applicable filing fees and related expenses. The Debtor
authorizes the Secured Party to file any such financing statements without the
signature of the Debtor.

                                   ARTICLE VI

                   REMEDIES UPON OCCURRENCE OF RELEVANT EVENT

                  Section 6.01 Remedies: Obtaining and Disposition of the
Collateral Upon Default. The Debtor agrees that, if any Relevant Event has
occurred and is continuing, then and in every such case, subject to any
Requirements of Law, the Secured Party may:

                  (a)      deliver a Notice of Exclusive Control, instructions
or entitlement orders with respect to the Collateral Accounts or the Collateral;

                  (b)      exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party upon default under the UCC to enforce
this Agreement and the security interest contained herein, and also may (A) if
applicable, require the Debtor to, and the Debtor hereby agrees that it will at
its expense and upon request of the Secured Party forthwith, assemble all or
part of the Collateral as directed by the Secured Party and make it available to
the Secured Party at a place to be designated by the Secured Party that is
reasonably convenient to both parties, or (B) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Secured Party's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Secured Party
may deem commercially reasonable. The Debtor agrees that, to the extent notice
of sale shall be required by law. at least thirty (30) days' notice to the
Debtor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Secured Party may adjourn any public or private
sale from time to time

                                       12

<PAGE>

by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned;

                  (c)      hold any money held by the Secured Party as
Collateral and all cash proceeds received by the Secured Party in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral, as collateral for, and/or, then, or at any time thereafter, apply
such amounts, in whole or in part, against all or any part of the Obligations,
and to make any currency conversions or effect any transaction in currencies
which it thinks fit, and to do so at such times and rates as it thinks proper;
and

                  (d)      exercise any and all rights and remedies of the
Debtor under or in respect of the Collateral.

                  Section 6.02 Waiver of Claims. Except as otherwise provided in
this Agreement, the Debtor hereby waives, to the extent permitted by all
Requirements of Law:

                  (a)      all damages occasioned by taking of possession except
any damages which are the direct result of the gross negligence or willful
misconduct of the Secured Party or any Person acting on its behalf or
instruction:

                  (b)      all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of the
Secured Party's rights hereunder; and

                  (c)      all rights of redemption, appraisement, valuation,
stay, extension or moratorium now or hereafter in force under any Requirement of
Law in order to prevent or delay the enforcement of this Agreement (including,
without limitation, any right to claim that such enforcement should be stayed
pending the outcome of any other action or proceeding (including any arbitration
proceeding)) or the absolute sale of the Collateral or any portion thereof, and
the Debtor, for itself and all who may claim under it, insofar as it or they now
or hereafter lawfully may, hereby waives the benefit of all such Requirements of
Law.

                  Any sale of, or the grant of options to purchase, or any
other realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Debtor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Debtor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under the Debtor.

                  Section 6.03 Deficiencies and Excess Proceeds. The Secured
Party shall transfer, or cause to be transferred, to the Debtor any proceeds and
Collateral remaining after exercising remedies under Section 6.01 and after
satisfaction in full of all amounts payable by the Debtor with respect to any
Obligations. For the avoidance of doubt, it is understood that the Debtor shall
remain liable to the extent of any deficiency between the amount of the proceeds
of the Collateral and the aggregate amount of the Obligations.

                  Section 6.04 Remedies Cumulative. No failure or delay on the
part of the Secured Party, in exercising any right, power or privilege hereunder
and no course of dealing between the Debtor and the Secured Party shall operate
as a waiver hereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further

                                       13

<PAGE>

exercise hereof or the exercise of any other right, power or privilege
hereunder. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Secured
Party would otherwise have. No notice to or demand on the Debtor in any case
shall entitle the Debtor to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Secured Party to
any other or further action in any circumstances without notice or demand.

                  Section 6.05 Discontinuance of Proceedings. In case the
Secured Party shall have instituted any proceeding to enforce any right, power
or remedy under this Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Secured Party, then and in every
such case the Debtor, the Secured Party shall be restored to their former
positions and rights hereunder with respect to the Collateral subject to the
security interest created under this Agreement, and all rights, remedies and
powers of the Secured Party shall continue as if no such proceeding had been
instituted.

                                   ARTICLE VII

                                  MISCELLANEOUS

                  Section 7.01 Expenses.

                  (a)      Except as otherwise provided in this Section 7.01(b)
and 7.01(c), each party will pay its own costs and expenses (including any
stamp, transfer or similar transaction tax or duty payable on any transfer it is
required to make under this Agreement) in connection with performing its
obligations under this Agreement and neither party will be liable for any such
costs and expenses incurred by the other party.

                  (b)      The Debtor shall promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Collateral
upon becoming aware of the same.

                  (c)      All reasonable costs, expenses, charges and fees paid
or incurred by the Secured Party in the exercise of any of the rights, remedies
or powers granted hereunder shall be for the account of the Debtor, and the
Debtor undertakes promptly on demand to pay the same or, as the case may be, to
reimburse the Secured Party and/or its agents, representatives, successors and
assigns as the case may be, for any monies paid by it with interest thereon to
the extent that there are then insufficient funds available in the Collateral
Accounts for this purpose.

                  Section 7.02 Notices. All communications between the parties
hereto or notices provided herein to be given may be given to the following
addresses:

                  If to the Secured Party:

                           St. Paul Reinsurance Company Limited
                           27 Camperdown Street
                           London El 8DS

                                       14

<PAGE>

                           United Kingdom
                           Attn: Company Secretary
                           Facsimile No.: 44-207-488-6345

                  If to the Debtor:

                           Platinum Re (UK) Limited
                           52 Lime Street
                           London EC3M 7NL
                           United Kingdom
                           Attn: Guy Butler
                           Facsimile No.: 44-207-623-6610

                  All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be considered as properly given
(a) if delivered in person, (b) if sent by internationally recognized overnight
delivery service, or (c) if sent by facsimile transmission. Notice so given
shall be effective upon receipt by the addressee; provided, however, that if any
notice is tendered during normal business hours on a Local Business Day to an
addressee in accordance with this Section 7.02 and the delivery thereof is
refused by such addressee, such notice shall be effective upon such tender. Any
party shall have the right to change its address for notice hereunder to any
other location by the giving of 30 days notice to the other parties in the
manner set forth hereinabove.

                  Section 7.03 Instructions. All entitlement orders and other
instructions and communications that the Debtor is entitled, or desires, to give
or make under this Agreement may be given or made either by the Debtor itself or
by the Investment Adviser, acting on behalf of the Debtor. All entitlement
orders and other instructions and communications that the Secured Party is
entitled, or desires, to give or make under this Agreement may be given or made
either by the Secured Party itself or by its attorney in fact.

                  Section 7.04 Waiver: Amendment. This Agreement may be"
changed, waived, discharged, or terminated only by an instrument in writing
executed by all of the parties hereto.

                  Section 7.05 Obligations Absolute. The obligations of the
Debtor under this Agreement shall be absolute and unconditional and shall remain
in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of, or addition or supplement to or
deletion from, the Retrocession Agreement or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (b) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such instrument or agreement or this Agreement or any exercise or
non-exercise of any right, remedy, power or privilege under or in respect of
this Agreement or the Retrocession Agreement or any other instrument or
agreement referred to therein; (c) any furnishing of any additional security to
the Secured Party or any acceptance thereof or any sale, exchange, release,
surrender or realization of or upon any security by the

                                       15

<PAGE>

Secured Party; or (d) any invalidity, irregularity or unenforceability of all or
part of the Obligations or of any security therefor.

                  Section 7.06 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that the Debtor
may not assign or transfer any of its rights or obligations hereunder without
the prior written consent of the Secured Party.

                  Section 7.07 Headings Descriptive, etc. The headings of the
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.

                  Section 7.08 Governing Law: Submission to Jurisdiction and
Venue. This Agreement is a contract made under the laws of The Commonwealth of
Massachusetts of the United States of America and shall for all purposes be
governed by and construed in accordance with the laws of such Commonwealth. Any
legal action or proceeding against the Debtor with respect to this Agreement may
be brought in the courts of The Commonwealth of Massachusetts in the County of
Suffolk, or in the federal courts of the United States for the District of
Massachusetts, it being understood that nothing herein shall affect the right of
the Secured Party to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Debtor in any
jurisdiction, and, by execution and delivery of this Agreement, the Debtor
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The Debtor agrees
that a judgment, after exhaustion of all available appeals, in any such action
or proceeding shall be conclusive and binding upon the Debtor, and may be
enforced in any jurisdiction, by a suit upon such judgment, a certified copy of
which shall be conclusive evidence of the judgment.

                  (b)      The Debtor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an .inconvenient forum.

                  Section 7.09 Waiver of Jury Trial. Each of the Debtor and the
Secured Party hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim arising out or relating to this Agreement, or
any other instrument or document delivered hereunder or thereunder.

                  Section 7.10 Termination: Release. This Agreement shall
terminate on the earlier of (i) the irrevocable payment and performance in full
or termination or waiver of the Obligations (other than contingent surviving
obligations), as confirmed by a joint notice from the Debtor and the Secured
Party, or (ii) such time as the Debtor delivers a notice to the Secured Party
and the Custodian that the Ending Reserves so reported by the Debtor do not
exceed USD 100 million as of two consecutive calendar years ends, provided,
however, that no Relevant Event shall have occurred and be continuing. Upon such
termination, the Secured Party shall, at the Debtor's expense, execute and
deliver to the Debtor such documents, and take such other acts, as the Debtor
shall reasonably request to evidence, or give effect to, such termination.

                                       16

<PAGE>

                  Section 7.11 Reinstatement. Notwithstanding anything herein to
the contrary, this Agreement shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by the
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Debtor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Debtor or any substantial part of its property, or otherwise, all as though such
payments had not been made.

                  Section 7.12 Counterparts. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be an
original, and both of which shall together constitute one and the same
instrument.

                  Section 7.13 Severability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected and/or
impaired thereby.

                            [SIGNATURE PAGE FOLLOWS.]

                                       17

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                          PLATINUM RE (UK) LIMITED, as Debtor

                                          By: /s/ G. R. Butler
                                              -------------------------------
                                          Name:  G. R. BUTLER
                                          Title: FINANCE DIRECTOR

                                          ST. PAUL REINSURANCE COMPANY
                                          LIMITED, as Secured Party

                                          By: /s/ T. MAHONEY
                                              -------------------------------
                                          Name:  T. MAHONEY
                                          Title: M D

<PAGE>

                                                                      SCHEDULE I

                               COLLATERAL ACCOUNTS

                                 Deposit Account

<TABLE>
<CAPTION>
           Description                          Number
<S>                                            <C>
Platinum Re (UK) fbo St. Paul Re               54798137
</TABLE>

                               Securities Account

<TABLE>
<CAPTION>
           Description                          Number
<S>                                             <C>
Platinum Re (UK) fbo St. Paul Re                CIW8
</TABLE>

                                      S-l