NCE AGREEMENT

                             Between
     
              UNIVERSAL GUARANTY LIFE INSURANCE COMPANY
              hereinafter referred to as "the Company"

                               and
     
              FIRST INTERNATIONAL LIFE INSURANCE COMPANY
              hereinafter referred to as "the Reinsurer"
     


       WHEREAS, the Company and the Reinsurer have made
     and entered into a Coinsurance Agreement dated as of
     September 30, 1996 (the "Agreement"); and

       WHEREAS, the Company and the Reinsurer wish to
     amend certain provisions of the Agreement;

       NOW, THEREFORE, in consideration of the mutual
     agreements, promises and covenants provided herein, the
     Company and the Reinsurer hereby agree to amend the
     Agreement as follows:


     SECTION 1.-DEFINITIONS

       All terms used in this Amendment shall be subject
     to the definitions provided in the Agreement.

       The definition of Reinsured Policies in Article I
     shall be replaced with the following:

            ""REINSURED POLICIES" means all paid-up
     life insurance and, if attached thereto, annuity
     policies, contracts, binders or certificates of
     insurance, and all riders, endorsements and amendments
     thereto, whether written or oral, issued or assumed by
     the Company, that are in force on the Effective Date,
     except those offered in settlement to so called "HIV"
     policyholders and paid-up business associated with the
     Company's Jr./Sr. Plan Single Premium Interest
     Sensitive Whole Life policies, including, without
     limitation, Policy Loans, all such Reinsured Policies
     being set forth in Schedule G, attached hereto." 

            The definition of Closing Date in
     Article I shall be replaced with the following:

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            ""CLOSING DATE" shall be December 6,
     1996, unless all of the conditions in Article XV
     hereunder have not been satisfied prior to such date,
     in which event it shall be that date ten (10) Business
     Days following receipt of notice from the Company to
     the Reinsurer that all of the conditions in Article XV
     hereunder have been satisfied."


     SECTION 2.-TABLE OF CONTENTS

            Add to the Table of Contents "SCHEDULE G -
     LIST OF REINSURED POLICIES" at page G-1.
     


     SECTION 3.-SCHEDULE G

            Add to the Agreement a new "SCHEDULE G" as
     attached hereto.
       


     SECTION 4.-INITIAL REINSURANCE CONSIDERATION

          Section 4.01 of the Agreement is to be replaced with the
     following:

               "4.01. INITIAL REINSURANCE CONSIDERATION.  On
     the Closing Date, as consideration for the assumption
     by the Reinsurer of the Reserves and Liabilities under
     the Reinsured Policies, the Company shall transfer to
     the Reinsurer cash in an amount equal to one hundred
     percent (100%) of the Reserves and Liabilities, which
     excludes all claim liabilities, as of the Effective
     Date (the "Initial Reinsurance Premium"), less the
     Expense Allowance described in Article V below (such
     net amount being the "Initial Reinsurance
     Consideration" as described in Schedule C attached
     hereto).  Such Initial Reinsurance Premium (shown on
     Schedule C) shall be subject to further and final
     adjustment as follows:  (1) within ninety (90) days
     after the Closing Date, the Reinsurer shall send a
     notice to the Company advising the Company of the final
     valuation of the Initial Reinsurance Premium, and (2)
     the Company shall then have five (5) Business Days from
     receipt of the aforementioned notice to make an
     adjustment to the cash amount it transferred to the
     Reinsurer on the Closing Date, in order to reflect the
     final valuation of the Initial Reinsurance
     Consideration pursuant to this Section 4.01." 
     

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     SECTION 5.-DEATH BENEFITS AND OTHER PAYMENTS

               Section 6.01 of the Agreement is to be
     replaced with the following:

               "6.01. DEATH, ANNUITY BENEFITS AND PAYMENTS
     UNDER SETTLEMENT OPTIONS.  The Reinsurer shall assume
     liability for, subject to Section 2.03, all death
     benefits, all annuity benefits, all periodic or lump
     sum payments on settlement options or withdrawals from
     Dividends on deposit, and all surrender and endorsement
     payments to Policyholders with respect to Reinsured
     Policies (such death benefits, annuity benefits and
     other payments are referred to collectively as
     "Benefits"), and shall indemnify the Company with
     respect to any such Benefits paid by the Company
     incurred after the Effective Date."


     SECTION 6.-ARTICLE VII

               Article VII of the Agreement is to be
     replaced with the following:

                     "NON-GUARANTEED ELEMENTS

               7.01. PARTICIPATION. The Reinsurer shall
     participate in the excess interest credited, dividends
     and coupon ("Dividends") scales in effect on the
     Effective Date of this Agreement.   Should the Company
     desire to change said scales, it shall do so only upon
     the consent of the Reinsurer, which shall not be
     unreasonably withheld.  The Reinsurer shall only
     reimburse those Dividends that are incurred after the
     Effective Date.   The Reinsurer may also make
     recommendations about a change in the Dividend scales.

               Article 7.02. OPTIONS. The Reinsurer shall
     participate in all Dividend options provided under the
     Reinsured Policies."


     SECTION 7.-SCHEDULE A

            Substitute the term "Reinsured Policies" for the
     term "Policies" in paragraphs E.1., E.2. and F.1. of
     Schedule A.

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     SECTION 8.-SCHEDULE B

            Substitute the Schedule B attached hereto as 
     Schedule B to the Agreement.


     SECTION 9.-COUNTERPARTS

            This Amendment to the Agreement may be executed in
     several counterparts and each shall have the same force and
     effect as an original.


     SECTION 10.-REPLACEMENTS
            Add a new Section 9.07 as follows:

            "9.07.  REPLACEMENTS.  The replacement of any 
     Reinsured Contract, pursuant to any program of replacement
     initiated by the Company or any Person acting on behalf or
     in the place of the Company, including any receiver, 
     liquidator or rehabilitator, shall be considered as a 
     recaptured contract and not a surrender unless the
     reinsurance provided by the Reinsurer hereunder is continued
     for the new contract.  Any contracts so surrendered and
     deemed recaptured shall be treated in accordance with the
     recapture terms in Schedule E."


     SECTION 11.-EFFECT

            Except as amended herein, the Agreement,
     together with all Schedules and Exhibits, remains in full
     force and effect.
     


            IN WITNESS WHEREOF, UNIVERSAL GUARANTY LIFE
     INSURANCE COMPANY and FIRST INTERNATIONAL LIFE INSURANCE
     COMPANY have by their respective officers made and entered
     into this Amendment as of the 30th day of September, 1996.
     
     UNIVERSAL GUARANTY LIFE           FIRST INTERNATIONAL LIFE
     INSURANCE COMPANY                 INSURANCE COMPANY
     
     
     James E. Melville                 Jeremy Starr
     By                                By
      
     President                         Vice President, Reinsurance
     Title                             Title
     

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                               SCHEDULE B
                           EXPENSE ALLOWANCE
     

     Expense Allowance = Base Allowance - Closing Interest
     
     Base Allowance = P x Reserves and Liabilities + 
                      Interest Adjustment Factor
     
     Interest Adjustment Factor = $1,600,000 x (A - B)

     Closing Interest = (Reserves and Liabilities - Policy Loans 
                         on the Effective Date - Base Allowance)
                         x D x B/365
     
           Where:
               P = 23.7% for Paid-up permanent policies
                   43.4% for Paid-up term policies
                   23.0% for Dividends on deposit, endowments
                         on deposit and reserves on Paid-up
                         additions bought by Dividends
                    0.0% for provisions for policyholder
                         Dividends payable in the following year 
                  100.0% for immediate payment of claim
                         reserves
                    3.0% for Annuities  
     
           A = 30 Year Treasury Rate in effect three (3)
               Business Days prior to the Closing Date

           B = 30 Year Treasury Rate on September 6, 1996
               (which is 7.12%)

           D = Calendar Days between Closing Date and
               Effective Date

                                    Records with:
                             First Character   In-Force
                              "class base"       Code  
     
       Paid-up Term
   
            ETI                   A,N,T            D
     
            Other Term            4,5,8          B or C
     
       Paid-up Permanent          1,2,3          B or C
    
       Dividend Options           amounts in any record
     
       Annuities                  D,F,S    amounts in any record

<PAGE>

                              SCHEDULE G
                      LIST OF REINSURED POLICIES
                                
                                
                                
                                
     [A completed Schedule G will be prepared by the Reinsurer
               and provided under separate cover]
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