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                            RELIASTAR FINANCIAL CORP.

                                     BY-LAWS
                     (As amended and restated April 9, 1999)



                                    ARTICLE I

                                     OFFICES


         Section 1.01. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.

         Section 1.02. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.


                                   ARTICLE II

                            MEETINGS OF SHAREHOLDERS


         Section 2.01. Place of Meetings. Each meeting of shareholders shall be
held at such time and at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors and
stated in the notice of the meeting.

         Section 2.02. Annual Meetings. An annual meeting of shareholders shall
be held annually on such date and at such time as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting, at
which the shareholders shall elect by a plurality vote the directors to be
elected at such meeting and transact such other business as may properly be
brought before the meeting.

         Section 2.03. Special Meetings. Unless otherwise specifically provided
by law or the Certificate of Incorporation, a special meeting of shareholders,
for any purpose or purposes, may be called only by the Chairman, if there be
one, the President or the Secretary and shall be called by any such officer at
the request in writing of a majority of the Board of Directors or a majority of
the Executive Committee of the Board of Directors, if there be one. Such request
shall state the purpose or purposes of the proposed meeting.

         Section 2.04. Notice of Meetings. A written notice, stating that the
place, date and hour of any meeting of shareholders, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
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be delivered or mailed, at least ten days and not more than sixty days before
the date of the meeting, to each shareholder entitled to vote at the meeting at
such address as appears upon the records of the Corporation.

         Section 2.05. Quorum. Unless otherwise specifically provided by law or
the Certificate of Incorporation, the holders of a majority (after giving
effect, if applicable, to Article Eight of the Certificate of Incorporation) of
the outstanding capital stock entitled to vote at the meeting, present in person
or by proxy, shall constitute a quorum. In the absence of a quorum, the
shareholders so present may, by majority vote, adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present. At such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted at the meeting
as originally noticed. If the adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder entitled to
vote at the meeting. (Amended October 11, 1990.)

         Section 2.06. Voting: Proxies. Unless otherwise specifically provided
by law, the Certificate of Incorporation or these By-Laws, any question brought
before a meeting of shareholders shall be decided by the vote of the holders of
a majority of the shares present in person or by proxy at the meeting and
entitled to vote. Such votes may be cast in person or by proxy, but no proxy
shall be voted on or after three years from its date unless such proxy provides
for a longer period. The Board of Directors, in its discretion, or the officer
of the Corporation presiding at the meeting, in such officer's discretion, may
require that any votes cast at the meeting shall be cast by written ballot.

         Section 2.07. Proper Business at Annual Meetings. At an annual meeting
of shareholders, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought before an annual
meeting, business must be specified in the notice of meeting (or a supplement
thereto) given by or at the direction of the Board of Directors, or otherwise
properly brought before the meeting by or at the direction of a shareholder. For
business to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Corporation. In addition to any applicable requirements under the proxy
rules promulgated from time to time by the Securities and Exchange Commission,
to be timely, a shareholder's notice must be delivered to, or mailed to and
received at, the principal executive offices of the Corporation not less than
sixty days prior to the date fixed for the annual meeting; provided, however,
that in the event that less than seventy-five days' prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be received not later than the close of business
on the fifteenth day following the day on which such public disclosure was made.
A shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) brief description of
the business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and record address
of the shareholder proposing such business, (c) the class and number of shares
of the Corporation which are beneficially owned by the shareholder and (d) any
material interest of the shareholder in such business.



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         Section 2.08. Fixing Date for Determination of Shareholders of Record.
In order that the Corporation may determine the shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which shall not be
less than ten nor more than sixty days before the date of such meeting, nor more
than sixty days prior to any other action. If no record date is fixed: (1) the
record date for determining shareholders entitled to notice of or to vote at a
meeting of shareholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; and (2) the record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders shall apply
to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.

         Section 2.09. List of Shareholders Entitled to Vote. The Secretary
shall prepare and make, at least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number
of shares registered in the name of each shareholder. Such list shall be open to
the examination of any shareholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the place of the meeting during the whole time thereof and
may be inspected by any shareholder who is present.

         Section 2.10. Stock Ledger. The stock ledger of the Corporation shall
be the only evidence as to shareholders who are entitled to examine the stock
ledger, the list required by Section 2.09 of shareholders entitled to vote or
the books of the Corporation, or to vote in person or by proxy at any meeting of
shareholders.


                                   ARTICLE III

                                    DIRECTORS


         Section 3.01. Number, Election and Qualifications of Directors. The
number of directors constituting the Board of Directors shall be fixed from time
to time by the Board of Directors in the manner prescribed in the Certificate of
Incorporation. Except as provided in Section 3.03, the directors to be elected
at each annual meeting of shareholders shall be elected by a plurality of the
votes cast at the meeting, and each director so elected shall hold office for
the term elected and until such director's successor is duly elected and
qualified, or until 


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such director's earlier resignation, retirement or removal. Any director may
resign at any time upon notice to the Corporation. Directors need not be
shareholders. A majority of the directors shall be citizens and residents of the
State of Minnesota.

         Section 3.02. Nomination Procedures. No person (other than a person
nominated by or at the Direction of the Board of Directors) shall be eligible
for election as a director at any annual or special meeting unless timely notice
is given in writing of such nomination by a shareholder of record to the
Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to, or mailed to and received at, the principal executive offices of
the Corporation not less than sixty days prior to the date fixed for the
meeting; provided, however, that in the event that less than seventy-five days'
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received not later
than the close of business on the fifteenth day following the day on which such
public disclosure was made.

         Section 3.03. Vacancies. Subject to the provisions of the Certificate
of Incorporation, vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next election
of the class for which such directors shall have been chosen and until their
successors are duly elected and qualified, or until their earlier resignation,
retirement or removal.

         Section 3.04. Duties and Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law, the Certificate of Incorporation or
these By-Laws directed or required to be exercised or done by the shareholders.

         Section 3.05. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as may be
designated from time to time by the Board of Directors.

         Section 3.06. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman, if there be one, or the President and,
upon request by any two directors, shall be called by the Chairman or the
President.

         Section 3.07. Notice of Special Meetings. Notice of each special
meeting stating the place, date and hour of the meeting shall be given to each
director by mail not less than forty-eight hours before the date of the meeting
or personally or by telephone, telegram, telex or cable on twenty-four hours
notice.

         Section 3.08. Quorum: Actions of Board. Unless otherwise specifically
provided by law, the Certificate of Incorporation or these By-Laws, at all
meetings of the Board of Directors, a majority of the entire Board of Directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors. If a quorum shall not be present at
any meeting of 


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the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.

         Section 3.09. Actions in Writing. Unless otherwise specifically
provided by the Certificate of Incorporation or these By-Laws, any action
required or permitted to be taken at any meeting of the Board of Directors or
any committee thereof may be taken without a meeting if all the members of the
Board of Directors or the committee consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Board of Directors
or the committee.

         Section 3.10. Meetings by Means of Conference Telephone. Members of the
Board of Directors or any committee thereof may participate in a meeting of the
Board of Directors or the Committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
section shall constitute presence in person at the meeting.

         Section 3.11. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board of Directors, designate an Executive
Committee and one or more other committees, each committee to consist of one or
more directors of the Corporation. The Board of Directors may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, and in the absence of a designation
by the Board of Directors of an alternate member to replace the absent or
disqualified member, the member or members thereof present at any meeting and
not disqualified from voting, whether or not constituting a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. Any committee, to the
extent allowed by law and provided in the resolution designating the committee,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation. Each
committee shall keep regular minutes and report to the Board of Directors when
required.

         Section 3.12. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board may make, alter and repeal
rules for conduct of its business. In the absence of such rules, each committee
shall conduct its business in the same manner as the Board of Directors conducts
its business.

         Section 3.13. Compensation. The Board of Directors shall have the
authority to fix the compensation of directors.

         Section 3.14. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the 

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meeting of the Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his, her or their votes are counted
for such purpose if (i) the material facts as to his, her or their relationship
or interest and as to the contract or transaction are disclosed or are known to
the Board of Directors or the committee, and the Board of Directors or committee
in good faith authorizes the contract or transaction by the affirmative vote of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (ii) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the shareholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
shareholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified by the Board of Directors,
a committee thereof or the shareholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or committee which authorizes the contract or transaction.


                                   ARTICLE IV

                                    OFFICERS


         Section 4.01. General. The officers of the Corporation shall be elected
by the Board of Directors and shall be a Chairman, who shall be a director and
who shall be designated by the Board of Directors as the Chairman or the
Chairman of the Board, a President, a Secretary and a Treasurer. The Board of
Directors, in its discretion, may also choose one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law, the
Certificate of Incorporation or these By-Laws. The officers of the Corporation
need not be shareholders of the Corporation nor, except in the case of the
Chairman, directors of the Corporation.

         Section 4.02. Election. The Board of Directors shall elect the officers
of the Corporation who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors. All officers of the Corporation shall hold
office until their respective successors are chosen and qualified, or until
their earlier resignation, retirement or removal. The Board of Directors may
remove any officer with or without cause at any time, but such removal shall be
without prejudice to the contract rights of such officer, if any, with the
Corporation. Any vacancy occurring in any office of the Corporation may be
filled by the Board of Directors.

         Section 4.03. Voting Securities Owned by the Corporation. Power of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chairman, the President or any Vice
President, and any such officer may, in the name of and on behalf of the
Corporation, take all such action as such officer may deem advisable to vote in
person or by proxy at any meeting of security holders of any corporation in


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which the Corporation may own securities and at any such meeting shall possess
and may exercise any and all rights and powers incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have exercised
and possessed if present. The Board of Directors may, by resolution, from time
to time confer like powers upon any other person or persons.

         Section 4.04. Chief Executive Officer. The Board of Directors shall
designate the Chairman or the President as the chief executive officer of the
Corporation. If there be no Chairman, the President shall be the chief executive
officer. The chief executive officer shall have the general powers and duties of
management and supervision usually vested in and imposed upon the chief
executive officer of a corporation. The chief executive officer shall preside at
all meetings of shareholders.

         Section 4.05. Chairman. The Chairman, if there be one, shall preside at
all meetings of the Board of Directors. During the absence or disability of the
President, the Chairman shall exercise all the powers and discharge all the
duties of the President. The Chairman shall also perform such other duties and
may exercise such other powers as from time to time may be assigned to the
Chairman by these By-Laws or by the Board of Directors.

         Section 4.06. President. The President shall, subject to the control of
the Board of Directors, the Executive Committee and, if there be one, the
Chairman, if the Chairman is the chief executive officer of the Corporation,
have general supervision of the business of the Corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect. In
the absence or disability of the Chairman or if there be none, the President
shall preside at all meetings of the Board of Directors. The President shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to the President by these By-Laws or by the Board of
Directors.

         Section 4.07. Vice Presidents. The Vice Presidents shall perform such
duties and have such powers as the Board of Directors, the Executive Committee,
or the chief executive officer of the Corporation may from time to time
prescribe. In the absence of the Chairman and the President, Vice Presidents
shall perform the duties and have the authority of the President in the order
prescribed by the Board of Directors or the Executive Committee.

         Section 4.08. Secretary. The Secretary shall keep the minutes of the
meetings of the Corporation and of the Board of Directors and its committees,
and shall cause all notices of meetings of the shareholders and of the Board of
Directors and its committees to be duly given in accordance with the provisions
of these By-Laws or as required by law. The Secretary shall in general perform
all duties usually incident to the office of secretary.

         Section 4.09. Treasurer. The Treasurer shall have the custody of the
funds and securities of the Corporation under the direction of the Board of
Directors and the Executive Committee, shall deposit all moneys of the
Corporation that may come into the Treasurer's hands to the credit of the
Corporation in such depositories as are authorized or approved by the Board of


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Directors or the Executive Committee and shall see that all expenditures are
duly authorized and evidenced by proper receipts and vouchers. The Treasurer
shall in general perform all duties usually incident to the office of the
treasurer.

         Section 4.10. Assistant Secretaries. The Board of Directors or the
Executive Committee may elect one or more Assistant Secretaries, who shall
perform such duties as the Board of Directors, the Executive Committee, or the
chief executive officer of the Corporation may from time to time prescribe. In
the absence of the Secretary, the Secretary's duties shall devolve upon such
officer or officers as designated by the chief executive officer of the
Corporation.

         Section 4.11. Assistant Treasurers. The Board of Directors or the
Executive Committee may elect one or more Assistant Treasurers who shall perform
such duties as the Board of Directors, the Executive Committee or the chief
executive officer of the Corporation may from time to time prescribe. In the
absence of the Treasurer, the Treasurer's duties shall devolve upon such officer
or officers as designated by the chief executive officer of the Corporation.

         Section 4.12. Duties and Authority. All officers of the Corporation
shall be subject to the supervision and direction of the Board of Directors and
the Executive Committee and, in addition to the foregoing duties and authority,
shall perform such duties and have such authority as the Board of Directors, the
Executive Committee or the chief executive officer of the Corporation may from
time to time prescribe.


                                    ARTICLE V

                                      STOCK


         Section 5.01. Certificates. Every holder of stock in the Corporation
shall be entitled to have a certificate signed, in the name of the Corporation,
(i) by the Chairman, the President or a Vice President and (ii) by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant Secretary of the
Corporation, certifying the number of shares owned by such holder in the
Corporation. Any or all of the signatures on the certificate may be facsimile
signatures. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.

         Section 5.02. Lost, Stolen or Destroyed Certificates. The Corporation
may issue a new certificate in place of any certificate of stock theretofore
issued by it alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of the person claiming the certificate of stock to be lost, stolen
or destroyed. The Corporation may require the owner of such certificate alleged
to have been lost, stolen or destroyed, or the owner's legal representative, to
give the Corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the Corporation on account of the certificate
alleged to have been lost, stolen or destroyed or the 

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issuance of such new certificate.

         Section 5.03. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and these By-Laws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by such person's attorney lawfully constituted in writing and upon the
surrender of the certificate therefore, which shall be canceled before a new
certificate shall be issued.


                                   ARTICLE VI

                                     NOTICES


         Section 6.01. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws to be given to any director,
member of a committee or shareholder, such notice may be given by mail,
addressed to such director, member of a committee or shareholder, as his or her
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Written notice may be also given
personally or by telegram, telex or cable.

         Section 6.02. Waivers of Notice. Whenever any notice is required by
law, the Certificate of Incorporation or these By-Laws to be given to any
director, member of a committee or shareholder, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent thereto. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of any regular or special meeting of shareholders, the Board of
Directors or a committee thereof need be specified in any written waiver of
notice.


                                   ARTICLE VII

                               GENERAL PROVISIONS


         Section 7.01. Dividends. Dividends upon the capital stock of the
Corporation, subject to applicable provisions, if any, of the Certificate of
Incorporation may be declared by the Board of Directors at any regular or
special meeting and may be paid in cash, in property or in shares of capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or 


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maintaining any property of the Corporation, or for any proper purpose, and
Board of Directors may modify or abolish any such reserve.

         Section 7.02. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

         Section 7.03. Corporate Seal. The Corporation shall have no corporate
seal.

         Section 7.04. Execution of Instruments. All contracts, deeds,
mortgages, notes, checks, conveyances, releases of mortgages and other
instruments shall be signed on behalf of the Corporation by the Chairman, the
President, the Secretary, the Treasurer or any Vice President, or by such other
person or persons as may be designated or authorized from time to time by the
Board of Directors, the Executive Committee, or the chief executive officer.


                                  ARTICLE VIII

                                 INDEMNIFICATION


         Section 8.01. Indemnification in Actions, Suits, or Proceedings Other
Than Those by or in the Right of the Corporation. Subject to Section 8.03, the
Corporation shall indemnify each person who is or was, or is threatened to be
made, a party to or witness in any threatened, pending or completed action,
suit, proceeding or claim, whether civil, criminal, administrative or
investigative (other than one by or in the right of the Corporation), by reason
of the fact that he or she is or was a director, officer or employee of the
Corporation or of Northwestern National Life Insurance Company, a Minnesota
corporation ("NWNL"), or is or was serving at the request of the Corporation or
NWNL as a director, officer, employee or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorney's fees and expenses), judgments, fines,
penalties, and amounts paid in settlement, incurred by him or her in connection
with defending, investigating, preparing to defend, or being or preparing to be
a witness in, such action, suit, proceeding or claim, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.

         Section 8.02. Indemnification in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 8.03, the Corporation shall
indemnify each person who is or was, or is threatened to be made, a party to or
witness in any threatened, pending or completed action, suit, proceeding or
claim by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he or she is or was a director, officer or employee
of the Corporation or of NWNL or is or was serving at the request of the
Corporation or NWNL as a director, officer, employee or trustee of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees and expenses), and, if
and to the extent permitted by applicable law, judgments, fines, penalties and
amounts paid 


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in settlement, incurred by him or her in connection with defending,
investigating, preparing to defend, or being or preparing to be a witness in,
such action, suit, proceeding or claim, if he or she acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interest of the Corporation; provided, however, that no indemnification shall be
made in respect of any such claim or any issue or matter in any such action,
suit or proceeding as to which such person shall have been adjudged to be liable
to the Corporation unless (and only to the extent that) the Court of Chancery or
the court in which such claim, action, suit or proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnification for such expenses and amounts which the Court of
Chancery or such other court shall deem proper.

         Section 8.03. Authorization of Indemnification.

         (a) Any indemnification under Section 8.01 or 8.02 (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the person seeking indemnification
is proper in the circumstances because he or she has met the applicable standard
of conduct set forth in Section 8.01 or 8.02, as the case may be. Such
determination (and determinations under Sections 8.05 and 8.06) shall be made
(i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the action, suit, proceeding or claim with
respect to which indemnification is sought ("disinterested directors"), or (ii)
if such a quorum is not obtainable, or if a quorum of disinterested directors so
directs, in a written opinion of independent legal counsel chosen by the Board
of Directors or (iii) by the shareholders; provided, however, that if a Change
in Control (as defined in this Section 8.03) has occurred and the person seeking
indemnification so requests, such determination (and determinations under
Sections 8.05 and 8.06) shall be made in a written opinion rendered by
independent legal counsel chosen by the person seeking indemnification and not
reasonably objected to by the Board of Directors (whose fees and expenses shall
be paid by the Corporation). To the extent, however, that a director, officer,
employee or trustee or former director, officer, employee or trustee has been
successful on the merits or otherwise in defense of any action, suit, proceeding
or claim described above, or in defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses (including attorneys' fees and
expenses) incurred by him or her in connection therewith, without the necessity
of authorization in the specific case.

         (b) For purposes of the second sentence of Section 8.03 (a),
"independent legal counsel" shall mean legal counsel other than an attorney, or
a firm having associated with it an attorney, who has been retained by or has
performed services for the Corporation, NWNL or the person seeking
indemnification within the previous three years.

         (c) For purposes of the proviso to the second sentence of Section 8.03
(a), a "Change in Control" shall be deemed to have occurred if:

                  (i) a majority of the directors of the Corporation shall be
         persons other than persons (A) who were directors of the Corporation or
         NWNL at September 1, 1988, (B) for whose election proxies shall have
         been solicited by the Board of 


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<PAGE>
 
         Directors or (C) who are then serving as directors appointed by the
         Board of Directors to fill vacancies on the Board of Directors caused
         by death or resignation (but not by removal) or to fill newly-created
         directorships;

                  (ii) thirty percent or more of the outstanding shares of
         Voting Stock (as such term is defined in the Certificate of
         Incorporation) of the Corporation is acquired or beneficially owned (as
         defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
         amended, or any successor rule thereto) by any person (other than the
         Corporation, NWNL, a subsidiary of the Corporation or the person
         seeking indemnification) or group of persons, not including the person
         seeking indemnification, acting in concert;

                  (iii) the shareholders of the Corporation approve a definitive
         agreement or plan to (A) merge or consolidate the Corporation with or
         into another corporation (other than (1) a merger or consolidation with
         a subsidiary of the Corporation, (2) a merger in which the Corporation
         is the surviving corporation and no outstanding Voting Stock of the
         Corporation (other than fractional shares) held by shareholders
         immediately prior to the merger is converted into cash, securities, or
         other property or (3) a merger of a subsidiary of the Corporation into
         NWNL pursuant to which NWNL first becomes a subsidiary of the
         Corporation, (B) exchange, pursuant to a statutory exchange of shares
         of Voting Stock of the Corporation held by shareholders of the
         Corporation immediately prior to the exchange, shares of one or more
         classes or series of Voting Stock of the Corporation for shares of
         another corporation, (C) sell or otherwise dispose of all or
         substantially all of the assets of the Corporation (in one transaction
         or a series of transactions) or (D) liquidate or dissolve the
         Corporation, unless a majority of the voting stock (or the voting
         equity interest) of the surviving corporation or of any corporation (or
         other entity) acquiring all or substantially all of the assets of the
         Corporation (in the case of a merger, consolidation or disposition of
         assets) or the Corporation (in the case of a statutory share exchange)
         is, immediately following the merger, consolidation, statutory share
         exchange or disposition of assets, beneficially owned by the person
         seeking indemnification, or a group of persons, including the person
         seeking indemnification, acting in concert; or

                  (iv) the Corporation enters into an agreement in principle or
         a definitive agreement relating to an event described in clause (i),
         (ii) or (iii) above which ultimately results in an event described
         therein or a tender or exchange offer or proxy contest is commenced
         which ultimately results in an event described therein.

         Section 8.04. Good Faith Defined. Etc.

         (a) For purposes of any determination under this Article VIII, a person
shall be deemed to have acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Corporation, or,
with respect to any criminal action or proceeding, to have had no reasonable
cause to believe his or her conduct was unlawful, if such person relied on the
records or books of account of the Corporation, NWNL or other enterprise, or on
information supplied to him or her by the officers of the Corporation, NWNL or
other enterprise, or on information or records given or reports made to the
Corporation or other enterprise by an independent certified public accountant or
by an appraiser or other expert selected with reasonable


                                      -12-
<PAGE>
 
care by the Corporation or other enterprise. The term "other enterprise" as used
in this Section 8.04 shall mean any enterprise other than the Corporation or
NWNL, including any corporation, partnership, join venture, trust, employee
benefit plan or other enterprise as to which such person is or was serving at
the request of the Corporation as a director, officer, employee or trustee.

         (b) The termination of any action, suit, proceeding or claim by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, that he or she had reasonable cause to
believe that his or her conduct was unlawful.

         (c) References in this Article VIII to "penalties" include any excise
taxes assessed on a person with respect to an employee benefit plan; references
to "serving at the request of the Corporation or NWNL" include any service as a
director, officer or employee or former director, officer or employee of the
Corporation or NWNL which imposes duties on, or involves services by, such
person with respect to an employee benefit plan or its participants or
beneficiaries; and a person who acted in good faith an in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
participants or beneficiaries of such an employee benefit plan shall be deemed
to have acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Corporation.

         (d) The provisions of this Section 8.04 shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth in Section 8.01
or 8.02, as the case may be.

         Section 8.05. Right to Indemnification Upon Application: Procedure Upon
Application: Etc. Except as otherwise provided in the proviso to Section 8.02:

         (a) any indemnification under Section 8.01 or 8.02 shall be made no
later than 45 days after receipt by the Corporation of the written request of
the director, officer, employee or trustee or former director, officer, employee
or trustee unless a determination is made within said 45-day period in
accordance with Section 8.03 that such person has not met the applicable
standard of conduct set forth in Section 8.01 or 8.02.

         (b) The right to indemnification under Section 8.01 or 8.02 or advances
under Section 8.06 shall be enforceable by the director, officer, employee or
trustee or former director, officer, employee or trustee in any court of
competent jurisdiction. Following a Change in Control, the burden of proving
that indemnification is not appropriate shall be on the Corporation. Neither the
absence of any prior determination that indemnification is proper in the
circumstances, nor a prior determination that indemnification is not proper in
the circumstances, shall be a defense to the action or create a presumption that
the director, officer, employee or trustee or former director, officer, employee
or trustee has not met the applicable standard of conduct. The expenses
(including 


                                      -13-
<PAGE>
 
Attorneys' fees and expenses) incurred by the director, officer, employee or
trustee or former director, officer, employee or trustee in connection with
successfully establishing his or her right to indemnification, in whole or in
part, in any such action (or in any action or claim brought by him or her to
recover under any insurance policy or policies referred to in Section 8.09)
shall also be indemnified by the Corporation.

         (c) If any person is entitled under any provision of these By-Laws to
indemnification by the Corporation for some or a portion of expenses, judgments,
fines, penalties or amounts paid in settlement incurred by him or her, but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify such person for the portion of such expenses, judgments, fines,
penalties and amounts to which he or she is entitled.

         Section 8.06. Expenses Payable in Advance. Expenses (including
attorneys' fees and expenses) incurred by a director, officer, employee or
trustee or a former director, officer, employee or trustee in defending,
investigating, preparing to defend, or being or preparing to be a witness in, a
threatened or pending action, suit, proceeding or claim against him or her,
whether civil or criminal, shall be paid by the Corporation in advance of the
final disposition of such action, suit proceeding or claim upon receipt by the
Corporation of a request therefor and an undertaking by or on behalf of the
director, officer, employee or trustee or former director, officer, employee or
trustee to repay such amounts if it shall be determined in accordance with
Section 8.03 that he or she is not entitled to be indemnified by the
Corporation; provided, however, that if he or she seeks to enforce his or her
rights in a court of competent jurisdiction pursuant to Section 8.05(b), said
undertaking to repay shall not be applicable or enforceable unless and until
there is a final court determination that he or she is not entitled to
indemnification as to which all rights of appeal have been exhausted or have
expired.

         Section 8.07. Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of these By-Laws, no person shall be
entitled to indemnification under this Article VIII or to advances under Section
8.06 with respect to any action, suit, proceeding or claim brought or made by
him or her against the Corporation or NWNL, other than an action, suit,
proceeding or claim seeking, or defending such person's right to,
indemnification and/or expense advances pursuant to this Article VIII or
otherwise.

         Section 8.08. Non-Exclusivity and Survival of Indemnification. The
provisions of this Article VIII shall not be deemed exclusive of any other
rights to which the person seeking indemnification or expense advances may be
entitled under any agreement, contract, or vote of shareholders or disinterested
directors, or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction, or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office. Except
as otherwise provided in Section 8.07, but notwithstanding any other provision
of this Article VIII, it is the policy of the Corporation that indemnification
of and expense advances to the persons specified in Section 8.01 and 8.02 shall
be made to the fullest extent permitted by law, and, accordingly, in the event
of any change in law, by legislation or otherwise, permitting greater
indemnification of and/or expense advances to any such person, the provisions of
this Article VIII shall be construed so as to require such greater
indemnification and/or expense

                                      -14-
<PAGE>
 
advances. The provisions of this Article VIII shall not be deemed to preclude
the indemnification of any person who is not specified in Section 8.01 or 8.02
but whom the Corporation has the power to indemnify under the provisions of the
General Corporation Law of the State of Delaware or otherwise. The provisions of
this Article VIII shall continue as to a person who has ceased to be a director,
officer, employee or trustee and shall inure to the benefit of the heirs,
executors and administrators of such person. All rights to indemnification and
advancement of expenses under this Article VIII shall be deemed to be provided
by a contract between the Corporation and the director, officer, employee or
trustee who serves in such capacity at any time while this Article VIII is in
effect. Any repeal or modification of this Article VIII shall not affect any
rights or obligations then existing.

         Section 8.09. Insurance. The Corporation may purchase and maintain at
its expense insurance on behalf of any person who is or was a director, officer
or employee of the Corporation or NWNL or is or was serving at the request of
the Corporation or NWNL as a director, officer, employee or trustee of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise against any liability or expense asserted against or incurred by him
or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him or her against such liability or expense under the provisions of
this Article VIII or the provisions of Section 145 of the General Corporation
Law of the State of Delaware. The Company shall not be obligated under this
Article VIII to make any payment in connection with any claim made against any
person if and to the extent that such person has actually received payment
therefor under any insurance policy or policies.

         Section 8.10. Successors: Meaning of "Corporation." This Article VIII
shall be binding upon and enforceable against any direct or indirect successor
by purchase, merger, consolidation or otherwise to all or substantially all of
the business and/or assets of the Corporation. For purposes of this Article
VIII, but subject to the provisions of any agreement relating to any merger or
consolidation of the kind referred to in clause (i) below or of any agreement
relating to the acquisition of any corporation of the kind referred to in clause
(ii) below, references to "the Corporation" shall include (i) any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger with the Corporation which, if its separate existence
had continued, would have had power and authority to indemnify its directors,
officers and employees, so that any person who is or was a director, officer or
employee of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or trustee of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, shall stand in the same position under the provisions of this
Article VIII with respect to the Corporation as he or she would have with
respect to such constituent corporation if its separate existence had continued;
and (ii) any corporation of which at least a majority of the voting power (as
represented by its outstanding stock having voting power generally in the
election of directors) is owned directly or indirectly by the Corporation.


                                      -15-
<PAGE>
 
         Section 8.11. Severability. The provisions of this Article VIII shall
be severable in the event that any provision hereof (including any provision
within a single section, subsection, clause, paragraph or sentence) is held
invalid, void or otherwise unenforceable on any ground by any court of competent
jurisdiction. In the event of any such holding, the remaining provisions of this
Article VIII shall continue in effect and be enforceable to the fullest extent
permitted by law.


                                   ARTICLE IX

                                    AMENDMENT


         Section 9.01. Power to Amend. The Board of Directors shall have
concurrent power with the shareholders as set forth in the Certificate of
Incorporation and the By-Laws to make, alter, amend, change, add to or repeal
the By-Laws.

         Section 9.02. Required Vote. The Board of Directors may amend the
By-Laws upon the affirmative vote of the number of directors which shall
constitute, under the terms of the By-Laws, the action of the Board of
Directors. Shareholders may not amend the By-Laws except upon the affirmative
vote of at least seventy-five percent of the votes entitled to be cast by the
holders of all outstanding shares of Voting Stock (as such term is defined in
the Certificate of Incorporation), voting together as a single class.

                                     -16-