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                      COMMUTATION AND RELEASE AGREEMENT


     This Commutation and Release Agreement (hereinafter referred to as "this   
Agreement") is made and entered into by and between ALPINE INSURANCE
COMPANY/TRANSCO SYNDICATE #1, LTD. ("CEDENT") and UNDERWRITERS REINSURANCE
COMPANY ("REINSURER"), and is effective as of April 1, 1997.

     WHEREAS, CEDENT and REINSURER entered into certain reinsurance agreements, 
policies, certificates, contracts, addenda and endorsements, including but not
limited to the agreement listed on Exhibit A attached hereto (hereinafter the
agreement listed on Exhibit A shall be referred to as the "Reinsurance
Agreement"); and

     WHEREAS, in consideration of the Commutation Amount set forth in Paragraph 
1 herein, CEDENT wishes fully, finally and forever to release REINSURER from
all obligations arising out of, resulting from, or in any way related to the
Reinsurance Agreement so that all of the REINSURER's obligations pursuant to
the Reinsurance Agreement are fully resolved and extinguished; and

     WHEREAS, CEDENT wishes to provide an indemnity to the REINSURER (which
shall include all fees and expenses) in the event that any claim, lawsuit,
proceeding or arbitration is brought by any party against the REINSURER on any
matter arising out of, resulting from, or in any way related to the Reinsurance
Agreement.

     NOW THEREFORE, in consideration of the promises and of the agreements
contained herein, and intending to be legally bound, the parties agree as
follows:

     1. Within four (4) business days following the signing by both parties of  
this Agreement, REINSURER shall pay to CEDENT the sum of Four Hundred
Ninety-Eight Thousand Fourteen and 68/100 Dollars (U.S. $498,014.68) (the
"Commutation Amount"). The Commutation Amount was calculated based on written
premium as of December 31, 1996 provided by the CEDENT.

     2. Upon receipt of the Commutation Amount and in consideration thereof,    
CEDENT, on behalf of itself, its subsidiaries, affiliated corporations,
officers, directors, shareholders, employees, representatives, agents, and
attorneys, if any, and their respective heirs, administrators, predecessors,
successors and assigns and each of them (collectively, the "CEDENT GROUP")
unconditionally releases, acquits and forever discharges REINSURER and its
parent, subsidiaries, affiliated corporations, officers, directors, 
shareholders, employees, agents and attorneys, if any, and their respective
heirs, administrators, predecessors, successors and assigns and each of them
(collectively, the "REINSURER GROUP"), from any and all past, present and
future claims, demands, debts, obligations, payments, liabilities, damages,
adjustments, executions, offsets, sums of money, accounts, reckonings, bonds,
bills, costs, expenses, actions, causes of action, controversies, covenants,
contracts, agreements, promises, judgments, liabilities and/or losses, of every
nature, character and description whether grounded


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in law or in equity, in contract, tort, or otherwise, all whether known or not  
known, which the CEDENT GROUP now owns, holds or has, or at any time heretofore
owned, held or had, or which the CEDENT GROUP hereafter can, shall or may own,
hold or have against the REINSURER GROUP, and each of them, arising out of,
resulting from, or in any way related to the Reinsurance Agreement, it being
the intent of the parties that this release operate to fully and finally settle
and extinguish any and all of the REINSURER GROUP's obligations and liabilities
arising out of, resulting from, or in any way relating to the Reinsurance
Agreement.

     3. Except for any demands, claims, liabilities, costs, charges, suits,     
expenses including attorney's fees, judgments, damages, penalties, and punitive
damages arising out of or in connection with or related to the REINSURER'S
gross negligent, willful misconduct or REINSURER's brokerage obligations to the
intermediary, CEDENT shall indemnify and hold REINSURER harmless from and
against all demands, claims, liabilities, costs, charges, suits, expenses,
including attorneys' fees, judgments, damages, penalties and punitive damages
arising out of, in connection with or related to the Reinsurance Agreement, or
which REINSURER may incur as a consequence of having issued the Reinsurance
Agreement .
     
     4. The parties, as between and among themselves, understand that they may  
have sustained damages or incurred obligations that may not yet be manifest and
that are presently unknown, but nevertheless, CEDENT deliberately intends and
does hereby release REINSURER to the extent that this Agreement so provides.
Furthermore, the parties expressly accept and assume the risk that the factual
or legal assumptions made by either party in connection with this Agreement may
be found hereafter to be different from the true facts or law, and the parties
agree that this Agreement shall be and remain in full force and effect
notwithstanding such differences in facts or law. In this connection, the
parties specifically waive the provisions of California Civil Code 1542, which
provides as follows:
        
        "A general release does not extend to claims which the creditor does    
        not know or subject to exist in his favor at the time of executing the
        release, which, if known by him, must have materially affected his
        settlement with the debtor."

     5. The parties specifically agree and acknowledge that the Commutation
Amount is being paid to CEDENT in good faith and constitutes fair consideration
for the discharge of amounts allegedly owing now or potentially owing in the
future by REINSURER to CEDENT under the Reinsurance Agreement.

     6. Each party to this Agreement represents and warrants to the other that  
the drafting and negotiation of this Agreement has been participated in by each
of the parties and for all purposes this Agreement shall be deemed to have been
drafted jointly by all parties.

     7. Each party to this Agreement represents and warrants to the other that  
this Agreement is entered into freely, voluntarily, without duress, in good
faith, at arms' length, in the regular course of business and in reliance on
its own independent investigations and analyses of the facts


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underlying the subject matter of this Agreement, and that except as set forth   
in writing in this Agreement, the decision to execute this Agreement is not
predicated on or influenced by any declarations representations, warranties or
promises of any kind made directly or indirectly by the other party, its
subsidiaries, affiliated corporations, officers, directors, shareholders,
employees, representatives, agents, or attorneys, if any, or their respective
heirs, administrators, predecessors, successors and assigns.

     8. The rights, duties and obligations set forth in the Agreement shall
inure to the benefit of and be binding upon any and all predecessors, parents,
successors, affiliates, officers, directors, employees, subsidiaries,
stockholders, liquidators, receivers and assigns of each of the parties hereto.
Nothing in this Agreement is intended to benefit any third party.

     9. Each party hereto expressly warrants and represents that it is a
company in good standing in its jurisdiction of incorporation; that the
execution of this Agreement is fully authorized by it; that the person
executing this Agreement on its behalf has the necessary and appropriate
authority to do so; that the execution, delivery and performance by it of this
Agreement does not and will not, contravene any law, governmental rule or
regulation, judgment or order applicable to it, and does not, and will not,
contravene any provision of, or constitute a default under, any agreement or
instrument to which it is a party or by which its properties are bound; and
that no authorization, consent or approval or any government entity is required
to make this Agreement valid and binding upon them.

     10. The failure of the parties to enforce any provision of this
Agreement shall not be construed as a waiver of such provision or any other
provision of this Agreement. No waiver of any provision of this Agreement shall
be deemed a waiver of any of its other terms, nor shall such waiver constitute
a continuing waiver.

     11. In the event that any part of this Agreement should for any reason
become or be found to be null, void, illegal or otherwise unenforceable, it
shall be struck out to the extent that it is so null, void, illegal or
unenforceable, and the remaining provisions of this Agreement shall remain in
full force and effect. In the event that any court of competent jurisdiction
renders a final, nonappealable order or ruling declaring this Agreement null
and void in its entirety, it is mutually agreed by CEDENT and REINSURER that
this Agreement shall be immediately rescinded and that each of the parties
hereto shall be restored to the position it was in just prior to the making of
this Agreement.

     12. This Agreement shall constitute the entire Agreement between the
parties as respects its subject matter, and supersedes all prior or
contemporaneous discussions, understandings or agreements. No supplement,
modification, waiver, or termination of this Agreement shall be binding or
enforceable unless executed in a writing signed by both parties hereunder, and
this provision cannot be orally waived.

     13. This Agreement nay be executed in multiple counterparts, each of 
which, when so executed and delivered, shall be an original, but such
counterparts shall together constitute one and the same instrument and
agreement.


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     14. This Agreement shall be interpreted and governed by the laws of the
State of California.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year
indicated below.


                                        ALPINE INSURANCE COMPANY/TRANSCO
                                        SYNDICATE #1, LTD.


Date:  May 30 , 1997                   By: /s/ Steven C. Shinn
      ---------                            --------------------------------
                                       Title:  President
                                              -----------------------------

Date:  May 30 , 1997                   By: /s/
      ---------                            --------------------------------
                                       Title: Secretary/General Counsel
                                              -----------------------------



                                       UNDERWRITERS REINSURANCE COMPANY
Date: May 29, 1997                     By: /s/
                                           --------------------------------
                                       Title: President
                                             ------------------------------


Date: May 29, 1997                     By: /s/
                                           --------------------------------
                                       Title: Vice President and Secretary







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                                  EXHIBIT A
                     TO COMMUTATION AND RELEASE AGREEMENT
                                   BETWEEN
             ALPINE INSURANCE COMPANY/TRANSCO SYNDICATE #1, LTD.
                                     AND
                       UNDERWRITERS REINSURANCE COMPANY




     First Casualty Excess of Loss:      RA 4171

     Commutation Period:                 January 1, 1996 to July 1, 1996
















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