ASSUMPTION REINSURANCE AGREEMENT

                                  between

                 UNIVERSAL GUARANTY LIFE INSURANCE COMPANY

                                    and

                FIRST INTERNATIONAL LIFE INSURANCE COMPANY
                                      

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                             TABLE OF CONTENTS
                                                                       Page
     
      ARTICLE I         DEFINITIONS                                       1

      ARTICLE II        BUSINESS ASSUMED                                  3

      ARTICLE III       ASSUMPTION CERTIFICATES                           5

      ARTICLE IV        GENERAL PROVISIONS                                7

      ARTICLE V         CONSIDERATION FOR ASSUMPTION 
                          REINSURANCE                                    10

      ARTICLE VI        DUTY OF COOPERATION                              10

      ARTICLE VII       ARBITRATION                                      11

      ARTICLE VIII      INDEMNIFICATION                                  11

      ARTICLE IX        EXECUTORY CONTRACT AND INSOLVENCY-
                          SETOFF                                         12

      ARTICLE X         MISCELLANEOUS PROVISIONS                         13
               


                                 EXHIBITS

     A      Policyholder Notice

     B      Certificate of Assumption

     C      Notice of Objection to Assumption

<PAGE>
          
                     ASSUMPTION REINSURANCE AGREEMENT

          This Assumption Reinsurance Agreement (the
     "Assumption Agreement"), is made and entered into as of
     September 30, 1996, by and between Universal Guaranty Life
     Insurance Company, a life insurance company (the "Company"),
     and First International Life Insurance Company, a life insurance
     company (the "Reinsurer").

          WHEREAS, the Company and the Reinsurer have
     entered into a Coinsurance Agreement, as of the date hereof
     (the "Coinsurance Agreement"), pursuant to which the Company
     has agreed to cede to the Reinsurer, and the Reinsurer has
     agreed to accept and indemnity reinsure, on a 100%
     coinsurance basis, all of the Reserves and Liabilities (as
     hereinafter defined), but not reserves for incurred but not
     reported claims and immediate payment of claims, arising
     under or with respect to the Reinsured Policies (as
     hereinafter defined); and

          WHEREAS, the Coinsurance Agreement provides that,
     upon the occurrence of certain events as specified in
     Article XVI therein, the Reinsurer shall have the right, in
     its sole discretion, to elect to assumption reinsure the
     Reinsured Policies, with a concurrent novation and complete
     release of the Company from any liability under such
     Reinsured Policies, on a state by state basis after the
     Effective Date upon the receipt of any and all applicable
     regulatory approvals and notice to relevant Policyholders
     followed by expiration of the applicable period with no opt
     out by such Policyholders or the obtaining of required
     consents from such Policyholders, as the case may be, under
     the terms and conditions set forth herein;

          NOW THEREFORE, in consideration of the foregoing
     and the mutual agreements set forth herein, the Company and
     the Reinsurer mutually agree as follows:


                                 ARTICLE I
                                 
                                DEFINITIONS

          As used in this Assumption Agreement, the
     following capitalized terms shall have the following
     meanings (definitions are applicable to both the singular
     and the plural forms of each term defined in this
     Article I):

          "ASSUMPTION DATE" shall have the meaning set forth
     in Section 2.4.

          "BUSINESS DAY" means any day other than a Saturday
     or Sunday or a day on which banking institutions in the
     States of New York, Ohio and Delaware are permitted or
     obligated by law to be closed.

          "CERTIFICATE OF ASSUMPTION" shall have the meaning
     set forth in Section 3.1.


          "COINSURANCE AGREEMENT" shall have the meaning set
     forth in the first recital hereof.

          "EFFECTIVE DATE" shall have the same meaning as in
     the Coinsurance Agreement.

          "EXTRA CONTRACTUAL LIABILITIES" shall have the
     same meaning as in the Coinsurance Agreement.

          "INSOLVENCY PROCEEDINGS" shall have the meaning
     set forth in Section 9.5.

          "NOTICE OF OBJECTION" shall have the meaning set
     forth in Section 3.1.

          "NOVATED POLICIES" means the Reinsured Policies
     with respect to which no rejection of assumption has been
     filed by a Policyholder pursuant to the terms of Section 3.2
     of this Assumption Agreement (or with respect to which other
     applicable regulatory requirements have been met), and with
     respect to which the terms of Section 3.4 apply.

          "PERSON" means any corporation, individual, joint
     stock company, joint venture, partnership, unincorporated
     association, governmental regulatory entity, country, state
     or political subdivision thereof, trust or other entity.

          "POLICYHOLDER" means a holder of a Reinsured
     Policy.

          "POLICYHOLDER NOTICE" shall have the meaning set
     forth in Section 3.1.

          "POLICY LOANS" shall have the same meaning as set
     forth in the Coinsurance Agreement.

<PAGE>

          "REINSURED POLICIES" means all paid-up insurance
     policies, issued by the Company, that are in force on the
     Effective Date, except policies 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.

          "RESERVES AND LIABILITIES" means the statutory
     reserves held by the Company as of the Effective Date in
     support of the policy liabilities arising under the
     Reinsured Policies and payable after the Effective Date
     (determined by reference to lines 1, 5, 7 and 8 on page 3 of
     its 1995 Annual Statement Blank) less Policy Loans. 

          "REINSURANCE AGREEMENT" shall have the same
     meaning as in the Coinsurance Agreement.
     
                                ARTICLE II
                                 
                             BUSINESS ASSUMED

          2.1.  COVERAGE.  After the Effective Date and upon
     the terms and subject to the conditions, including Section
     XVI of the Coinsurance Agreement, and other provisions of
     this Assumption Agreement and any required governmental and
     regulatory consents and approvals, the Company, if requested
     to do so by the Reinsurer, hereby agrees to cede to the
     Reinsurer and the Reinsurer hereby agrees to accept and
     reinsure, on an assumption basis, any Reinsured Policy. 
     Reinsurance pursuant to this Section 2.1 shall occur no less
     frequently than on a monthly basis until all Reinsured
     Policies have been assumed pursuant to the provisions of
     Article III hereunder; provided, however, that reinsurance
     may occur more frequently if the parties hereto agree.

          2.2.  EXCLUSIONS.  This Assumption Agreement does
     not apply to and specifically excludes from coverage any
     Extra Contractual Liabilities.  In addition, the Reinsurer
     shall not assume, and shall be indemnified by the Company
     for, all guaranty fund assessments and premium taxes or
     similar charges imposed on or with respect to the Reinsured
     Policies to the extent that such assessments, taxes or
     charges are based on premiums remitted prior to the
     Effective Date.

          2.3.  TRANSFER OF RESERVES.  Notwithstanding the
     provisions of Section 2.1 hereof, the Reinsurer will not be

<PAGE>

     deemed to have accepted and reinsured, on an assumption
     basis, any Reinsured Policy unless the Reserves and
     Liabilities underlying such Reinsured Policy shall have been
     ceded by the Company to the Reinsurer, and accepted by the
     Reinsurer, pursuant to Article II of the Coinsurance
     Agreement, effective as of the Effective Date.

          2.4.  ASSIGNMENT OF CEDED REINSURANCE.

               (a)  Regardless of whether reinsurance
     novation agreements are entered into between the Reinsurer
     and any reinsurer, the Reinsurer shall be substituted for
     and succeed to all of the rights and liabilities of the
     Company, and shall, as between the parties hereto, be
     recognized for all purposes as the "Company" thereunder in
     substitution for the Company, under any Reinsurance
     Agreements in effect as of the date that the provisions of
     Section 2.1 hereunder take effect (the "Assumption Date")
     with any reinsurer relating to the Reinsured Policies.  For
     consideration which has already been provided for in Article
     IV of the Coinsurance Agreement, as of the Assumption Date,
     the Company shall assign, transfer and convey, and the
     Reinsurer shall be bound by and assume, any and all rights
     and obligations of the Company under any Reinsurance
     Agreement including amounts held by or which may become due
     from reinsurers for policy liabilities under the Reinsured
     Policies or for benefits or other amounts paid by the
     Company prior to the Assumption Date.  The Company and the
     Reinsurer shall use their best efforts to effect, as
     promptly as possible, an endorsement to each Reinsurance
     Agreement substituting the Reinsurer for the Company and to
     amend the Ceded Reinsurance Agreement to comply with the
     credit for reinsurance provisions of (i) the Delaware
     Insurance Law and (ii) any other statute or regulation
     applicable to the cession of reinsurance by foreign life
     insurance companies.  The Company agrees to enter into such
     endorsements and, if reasonably requested by the Reinsurer,
     aid the Reinsurer, at the Reinsurer's expense, in obtaining
     any such endorsement.

               (b)  From the Assumption Date, the Company
     hereby agrees that all amounts due the Reinsurer hereunder
     pursuant to the Reinsurance Agreements shall be paid
     directly to the Reinsurer by reinsurers and reinsurance
     brokers.  The Company shall, if reasonably requested by the
     Reinsurer, aid the Reinsurer, at the Reinsurer's expense, in
     collection of all amounts due from reinsurers.  From the
     Assumption Date, the collectibility of such reinsurance

<PAGE>

     shall be the ultimate responsibility of the Reinsurer and
     shall be at the risk and for the account of the Reinsurer in
     the event such reinsurance is not collected.

               (c)  From the Assumption Date, the Reinsurer
     shall have full power and authority as attorney-in-fact for
     the Company to act for and on behalf of the Company with
     respect to any and all letters of credit and trust funds
     outstanding for the benefit of the Company pursuant to the
     terms of any of the Reinsurance Agreements.  The Company and
     the Reinsurer shall, at the expense of the Reinsurer, each
     use their best efforts to the extent mutually agreed to be
     necessary, to cause the reinsurers of the Company under the
     Reinsurance Agreements to post replacement letters of credit
     or establish replacement trust funds to be issued or
     established directly in favor and for the benefit of the
     Reinsurer in the same or a greater amount and on terms
     equally as favorable to the Reinsurer, unless the Reinsurer
     shall otherwise consent.  The Company agrees to transfer to
     the Reinsurer all funds withheld from reinsurers under the
     Reinsurance Agreements.


                                ARTICLE III
                                 
                          ASSUMPTION CERTIFICATES

          3.1.  POLICYHOLDER NOTICES.  Upon the request of
     the Reinsurer to reinsure, on an assumption basis, a
     Reinsured Policy pursuant to Section 2.1 hereof, and to the
     extent that the reinsurance of such Reinsured Policy is
     permitted or approval therefore has been granted under
     applicable laws, rules or regulations or positions of
     insurance regulatory authorities, the Reinsurer shall
     prepare, with the cooperation of the Company, a Policyholder
     notice ("Policyholder Notice"), certificate of assumption
     ("Certificate of Assumption") and objection form ("Objection
     Form"), and mail them to the Policyholder of such Reinsured
     Policy.  Subject to regulatory requirements of the various
     states, the Policyholder Notices, Certificates of Assumption
     and Objection Forms to be delivered to Policyholders
     pursuant to this Section 3.1 shall be substantially in the
     forms attached hereto as Exhibits A, B and C, respectively.

          3.2.  RIGHT TO OBJECT.  Subject to regulatory
     requirements of the various states, the Company and the
     Reinsurer agree that a Policyholder will be allowed to
     remain a Policyholder of the Company if such Policyholder

<PAGE>

     refuses to effect the assumption of its Reinsured Policy in
     accordance with this Article III during the applicable
     period set forth in the Policyholder notice, and all of the
     rights and obligations of the Company and the Policyholder
     under such Reinsured Policy and of the Company and the
     Reinsurer under the Coinsurance Agreement with respect to
     such Reinsured Policy, shall remain the same.

          3.3.  NOVATED POLICIES.  In the event that a
     Reinsured Policy defined herein as a Novated Policy is
     determined by applicable regulatory authorities or by
     judicial decision (in either case, following the exhaustion
     of all rights of appeal) not to have been novated, such
     Reinsured Policy shall, for all purposes of this Assumption
     Agreement, be deemed never to have been a Novated Policy. 
     Notwithstanding the foregoing, the fact that a Reinsured
     Policy has not been or cannot be assumed and novated by the
     Reinsurer pursuant to the terms and conditions of this
     Assumption Agreement, for whatever reason, shall in no event
     cause it not to be a Reinsured Policy under the Coinsurance
     Agreement.

          3.4.  DIRECT OBLIGATIONS.  The Reinsurer shall be
     the successor to the Company under the Novated Policies as
     if the Novated Policies were direct obligations originally
     issued by the Reinsurer.  The Reinsurer shall be substituted
     in the place and stead of the Company, and each
     Policyholder, insured or beneficiary under a Novated Policy
     shall disregard the Company as a party thereto and treat the
     Reinsurer as if it had been originally obligated thereunder. 
     Such Persons shall have the right to file claims or take
     other actions under the Novated Policies on or after the
     effective date of such novation directly with the Reinsurer,
     and shall have a direct right of action for insurance
     liabilities reinsured thereunder against the Reinsurer, and
     the Reinsurer hereby consents to be subject to direct action
     taken by any such Persons under a Novated Policy.  The
     Reinsurer accepts and assumes the Novated Policies subject
     to any and all defenses, setoffs and counterclaims to which
     the Company would be entitled with respect to such insurance
     liabilities, it being expressly understood and agreed by the
     parties hereto that no such defenses, setoffs or
     counterclaims are waived by the execution of this Assumption
     Agreement or the consummation of the transactions
     contemplated hereby and that the Reinsurer shall be fully
     subrogated to all such defenses, setoffs and counterclaims.

<PAGE>

          3.5.  RELEASE OF COMPANY; INDEMNITY.  Upon the
     consummation of the assumption reinsurance of a Reinsured
     Policy from the Company to the Reinsurer under this
     Reinsurance Agreement, the Company shall be released from
     any and all liability, except for Extra Contractual
     Liabilities, with respect to such Reinsured Policy.  From
     and after the consummation of the assumption reinsurance of
     a Reinsured Policy pursuant to this Assumption Agreement,
     the Reinsurer agrees to indemnify the Company for any and
     all damages, costs and expenses, including reasonable legal
     counsel fees and disbursements, arising out of, based upon
     or relating to such Novated Policy; provided, however, that
     the Reinsurer shall be under no obligation to indemnify the
     Company for any Extra Contractual Liabilities.


                                ARTICLE IV
                                 
                            GENERAL PROVISIONS

          4.1.  POLICY ADMINISTRATION.  To the extent that
     such transfers have not already taken place pursuant to the
     terms and conditions of the Coinsurance Agreement, the
     Company agrees to cooperate fully with the Reinsurer in the
     transfer of all books, records, papers or any other
     documents relating to such Novated Policies.

          4.2.  BILLING AND COLLECTIONS.  Effective on the
     respective dates on which the novation of any Reinsured
     Policy is effective, the Reinsurer shall have sole
     responsibility for billing and collecting policy loan
     repayments, interest and the making of payments of dividends
     in respect of the Novated Policies, subject to the terms of
     any administrative or other agreements between the parties
     hereto that have been or heretofore may be entered into and
     the terms of agreements between the Reinsurer and its agents
     or subcontractors. 

          4.3.  MISUNDERSTANDINGS AND OVERSIGHTS.  If any
     delay, omission, error or failure to pay amounts due or to
     perform any other act required by this Assumption Agreement
     is unintentional and caused by misunderstanding or
     oversight, the Company and the Reinsurer will adjust the
     situation to what it would have been had the
     misunderstanding or oversight not occurred.  The party first
     discovering such misunderstanding or oversight, or act
     resulting from the misunderstanding or oversight, will
     notify the other party in writing promptly upon discovery

<PAGE>

     thereof, and the parties shall act to correct such
     misunderstanding or oversight within thirty (30) Business
     Days of receipt of such notice.  However, this Section shall
     not be construed as a waiver by either party of its right to
     enforce strictly the terms of this Assumption Agreement.

          4.4.  LITIGATION; CLAIMS.  The Reinsurer shall be
     responsible for the handling of, and all costs and expenses,
     including legal fees, relating to, litigation or other
     claims under the Novated Policies.  Notwithstanding the
     foregoing, the Reinsurer shall have no liability for such
     costs and expenses to the extent they arise out of or are
     based on any Extra Contractual Liabilities, and to the
     extent that the Reinsurer incurs any such costs or expenses,
     the Reinsurer shall be indemnified by the Company.

          4.5.  NON-COMPETE.  The Company shall take no
     action directly or indirectly to induce any Policyholder of
     a Novated Policy to terminate, reinstate, lapse or exchange
     such policy.

          4.6.  COMPLIANCE WITH APPLICABLE LAWS AND
     REGULATIONS.

               (a)    INTENT OF PARTIES.  It is the intention
     of the parties that this Assumption Agreement shall be
     interpreted in accordance with the laws as of the date of
     execution hereof by both parties and comply with all
     existing applicable state and federal laws and regulations,
     and as from time to time are or may be in effect, in such a
     way that the Reinsured Policies remain reinsured on the
     coinsurance plan and contingent assumption plan.

               (b)    PROCEDURES TO REFLECT CHANGES IN LAWS OR
     REGULATIONS.  In the event that it is determined by an
     insurance regulatory authority or the Internal Revenue
     Service or by either party upon the advice of an insurance
     regulatory authority or the Internal Revenue Service that
     this Assumption Agreement fails to conform to the
     requirements of existing applicable laws and regulations and
     that the Assumption Agreement may be brought into conformity
     with said requirements only by means of a material change to
     the Assumption Agreement, or in the event that such laws or
     regulations are changed subsequent to the Effective Date and
     such change has a material adverse affect on either party or
     requires a material change to the Assumption Agreement in
     order for the Assumption Agreement to conform with
     applicable laws and regulations, the parties shall exercise

<PAGE>

     reasonable efforts to reach an agreement to amend the
     Assumption Agreement so as to return the parties to the
     economic position that they would have been in had no such
     change occurred or so that both parties share the economic
     position that they would have been in had no such change
     occurred or so that both parties share the economic
     detriment of such change equally.  If the parties are unable
     to reach an agreement to amend the Assumption Agreement,
     then the differences between the parties shall be resolved
     through arbitration in accordance with the provisions of
     Article VII.  In the event that any change required to
     conform the Assumption Agreement to the requirements of
     applicable law or regulation is not material, the Assumption
     Agreement shall be amended accordingly.  In no event,
     however, shall this provision prevent either party from
     exercising any right it otherwise has under this Assumption
     Agreement.  For purposes of this Section 4.6(b), the word
     "material" shall mean, when used with respect to (i) any
     change in law or regulation, or any change into the
     Assumption Agreement necessary to bring the Assumption
     Agreement into conformity with the requirements of any law
     or regulation; or (ii) any delay, omission, error or failure
     to pay amounts due or to perform any other act required
     under this Assumption Agreement; or (iii) any default, that
     the effect or effects of any of (i), (ii) or (iii) above
     (either individually or cumulatively) results in a deviation
     from a projected return under this Assumption Agreement
     (absent the occurrence of (i), (ii) or (III) above, either
     individually or cumulatively) by at least five percent (5%),
     measured from the first day that the occurrence of (i), (ii)
     or (iii) above, or series thereof, taken into account on a
     cumulative basis, occurred or becomes effective.

               (c)    NOTIFICATION OF DISAPPROVAL OR CHANGE IN
     LAW.  The Company shall promptly notify the Reinsurer of any
     disapprovals, recommended changes or statements regarding
     the Assumption Agreement that are made by any insurance or
     tax regulatory authorities and of any change in law,
     regulation or rulings affecting this Assumption Agreement. 
     The Reinsurer shall be allowed to make its own defense of
     the Assumption Agreement with said authorities.

          4.7.  RECOUPMENT AND FAILURE OF CONSIDERATION.  If
     either party to this Assumption Agreement fails to perform
     this Assumption Agreement in full, then the other party has
     the right to suspend performance, and if the defaults cannot
     be cured, within one hundred and twenty (120) days following
     delivery of written notice from the non-defaulting party to

<PAGE>

     the defaulting party, to terminate this Assumption
     Agreement.  Alternatively, the non-defaulting party can
     recoup damages (including, without limitation, the amount
     owed plus interest from the date owed and calculated at the
     Chase Bank prime rate plus two points) from future
     settlements between the parties.


                                 ARTICLE V
                                 
                 CONSIDERATION FOR ASSUMPTION REINSURANCE

          5.1  CONSIDERATION.  The consideration provided
     for in Article IV of the Coinsurance Agreement shall be the
     consideration for the assumption of the Novated Policies (as
     direct obligations) by the Reinsurer, and there shall be no
     additional consideration or premium due or payable under
     this Assumption Agreement.


                                ARTICLE VI
                                 
                            DUTY OF COOPERATION

          6.1.  DUTY OF COOPERATION.  Each party hereto
     shall cooperate fully with the other in all reasonable
     respects in order to accomplish the objectives of this
     Assumption Agreement.  This duty to cooperate shall include
     obtaining the governmental and regulatory consents and
     approvals and taking the other steps necessary for the
     assumption of the Reinsured Policies, as described in
     Article III hereof.  In addition, this duty to cooperate
     shall include making available any Reinsured Policy records
     which either party subsequently may require to resolve
     issues related to claims or liabilities.  The Company and
     the Reinsurer agree to perform such additional acts and
     execute such additional documents and agreements as may be
     necessary or desirable to carry out the purposes and
     objectives of this Assumption Agreement; provided however,
     that Reinsurer shall reimburse the Company for reasonable
     out-of-pocket expenses incurred by the Company.

<PAGE>

                                ARTICLE VII
                                 
                                ARBITRATION

          7.1.  GENERAL.  Any dispute or difference between
     the parties with respect to the operation or interpretation
     of, or arising from or relating to, this Assumption
     Agreement on which an amicable understanding cannot be
     reached shall be decided pursuant to and in accordance with
     the terms, conditions and procedures set forth in Article XI
     of the Coinsurance Agreement.

          7.2.  SURVIVAL.  This Article shall survive
     termination of this Assumption Agreement.


                               ARTICLE VIII
                                 
                              INDEMNIFICATION

          8.1.  THE COMPANY.  The Company hereby agrees on
     demand to indemnify and hold harmless the Reinsurer, and its
     respective officers, directors and employees from and
     against any and all demands, actions, proceedings, suits (by
     any Person) and liabilities, paid or incurred (including
     reasonable attorneys' fees), resulting from or arising out
     of the breach of or failure to perform any of the duties,
     obligations, covenants or agreements of the Company
     contained in this Assumption Agreement.

          8.2.  THE REINSURER.  The Reinsurer hereby agrees
     to indemnify and hold harmless the Company, and its
     respective officers, directors and employees from and
     against any and all demands, actions, proceedings, suits (by
     any Person) and liabilities, paid or incurred (including
     reasonable attorneys' fees), resulting from or arising out
     of the breach of or failure to perform any of the duties,
     obligations, covenants or agreements of the Reinsurer
     contained in this Assumption Agreement.

          8.3.  SURVIVAL OF ARTICLE.  This Article shall
     survive termination of this Assumption Agreement.


<PAGE>


                                ARTICLE IX
                                 
                 EXECUTORY CONTRACT AND INSOLVENCY-SETOFF

          9.1.  INSOLVENCY-SETOFF (OR OFFSET).  In the event
     either party to the Assumption Agreement shall be the
     subject of insolvency proceedings ("Insolvency Proceedings")
     all independent debts on unrelated contracts between the
     parties shall be setoff to the extent:

          (a) the debt from the creditor to the insolvent arose
          pre-petition.

          (b) the debt from the insolvent to the creditor arose
          pre-petition.

          (c) the debts are mutual, meaning they are between the
          two parties to this Assumption Agreement, and in the same
          right and the same capacity.

     The cash payment due on each reinsurance agreement between
     the parties shall constitute the "debt" on such agreement.

          9.2.  ADEQUATE ASSURANCE.  In the event of
     Insolvency Proceedings involving the Company, the
     Reinsurer's future performance is conditioned on receiving
     adequate assurance of future performance, as defined in the
     Uniform Commercial Code, Section 2-206, and the Official Comments
     thereunder.

          9.3.  IPSO FACTO CLAUSE.  If the receiver,
     including any liquidator or rehabilitator, of one of the
     parties assigns the rights or delegates the duties of this
     Assumption Agreement, and the assignee is the subject of
     Insolvency Proceedings then the other party may immediately
     terminate the Assumption Agreement without further
     performance.

          9.4.  EXECUTORY CONTRACT.  In the event either
     party to the Assumption Agreement is the subject of
     Insolvency Proceedings the receiver of the insolvent, with
     respect to future account settlements, may affirm or reject
     the Assumption Agreement, but not affirm the rewards and
     reject the burdens.  If this Assumption Agreement is neither
     affirmed nor rejected within one hundred and twenty (120)
     days after a party becomes the subject of Insolvency
     Proceedings, then the Assumption Agreement shall be deemed
     to be rejected.

<PAGE>

          If either party is the subject of Insolvency
     Proceedings other than liquidation proceedings, then the
     other party may request adequate assurance of continued
     performance and the first priority administrative expense
     with respect to future performance prior to the time the
     Assumption Agreement is either affirmed or rejected, and if
     such is not provided, then, after one hundred and twenty
     (120) days, the other party may treat its future performance
     as canceled.

     9.5.  INSOLVENCY PROCEEDINGS.  For purposes of this Assumption 
     Agreement the term "Insolvency Proceedings" shall include, but not be 
     limited to, any action by a state insurance regulatory authority to 
     place a party in, or the actual commencement of, delinquency 
     proceedings, including conservatorship, receivership, rehabilitation,
     reorganization, "adjustment of debts,"  "voluntary supervision," or 
     liquidation.


                          ARTICLE X
                  MISCELLANEOUS PROVISIONS

     10.1.  NO THIRD PARTY BENEFICIARIES.  This Assumption Agreement is 
     between the Company and the Reinsurer, and the performance of the 
     obligations of each party under this Assumption Agreement shall be
     rendered solely to the other party.  In no instance shall anyone
     other than the Company or the Reinsurer, or their successors or
     permitted assigns, have any rights, benefits or remedies under this
     Assumption Agreement.  Until the Reinsurer has reinsured a Reinsured
     Policy on an assumption reinsurance basis pursuant to this Assumption
     Reinsurance Agreement, the Reinsurer shall not be liable to any
     insured, contract owner, or beneficiary under any Reinsured Policy.

     10.2.  HEADINGS AND EXHIBIT.  Headings used herein are inserted solely
     for the convenience of reference and are not a part of this Assumption
     Agreement and shall not affect the terms hereof.  The attached Exhibits
     are part of this Assumption Agreement.

     10.3.  NOTICES.  All notices and communications hereunder shall be in
     writing and shall be deemed to have been received three (3) Business
     Days after mailing, or if by telefax or by hand, when received, and
     if by overnight mail, on the next Business Day. Any written notice
     shall be by either certified or registered mail, return receipt
     requested, or overnight delivery service (providing for delivery
     receipt) or delivered by hand.  All notices or communications with 
     the Reinsurer under this Assumption Agreement shall be addressed as
     follows:

           First International Life Insurance Company
           c/o The Guardian Life Insurance Company of America
           201 Park Avenue South
           New York, New York  10003
           Attention:  Jeremy Starr
           Telefax No.:  (212) 598-8659

     All notices and communications with the Company under this Assumption
     Agreement shall be directed to:

           Universal Guaranty Life Insurance Company
           5250 South Sixth Street
           Springfield, Illinois 62750-5147
           Attention:  James Melville
           Telefax No.:  (217) 786-4372

     10.4.  SEVERABILITY.  If any term or provision of this Assumption
     Agreement shall be held void, illegal, or unenforceable, the validity
     of the remaining portions or provisions of this Assumption Agreement
     shall not be affected thereby; PROVIDED, HOWEVER, that to the extent
     that such remaining portions or provisions affect the economic
     positions of the parties hereunder, this Assumption Agreement shall
     be amended by the parties so as to return the parties to the economic
     positions that they would have been in had no such severance occurred
     or so that both parties share the economic detriment of such severance
     equally.

     10.5.  ASSIGNMENT.  This Assumption Agreement may not be assigned by
     either party without the prior written consent of the other and any
     attempted assignment without such consent shall be void.

     10.6.  SUCCESSORS AND ASSIGNS.  The provisions of this Assumption
     Agreement shall be binding upon and inure to the benefit of and 
     be enforceablel by the parties hereto and their respective successors
     and permitted assigns.

     10.7.  EXECUTION IN COUNTERPARTS.  This Assumption Agreement may be
     executed by the parties hereto in any number of counterparts, and by
     each of the parties hereto in separate counterparts, each of which
     counterparts, when so executed and delivered, shall be deemed to be
     an original, but all such counterparts shall together constitute but
     one and the same instrument.

     10.8.  AMENDMENTS.  This Assumption Agreement may be amended only by
     written amendment hereto executed by the parties.

     10.9.  WAIVER.  The failure of the Company or Reinsurer to insist on
     strict compliance with this Assumption Agreement, or to exercise any
     right or remedy under this Assumption Agreement, shall not constitute
     a waiver of any rights provided under this Reinsurance Agreement, nor
     stop the parties from thereafter demanding full and complete compliance
     nor prevent the parties from exercising such a right or remedy in the
     future.

     10.10.  INTERPRETATION.  No provision of this Assumption Agreement
     shall be construed against any party on the ground that such party
     drafted the provision or caused it to be drafted.

     10.11.  ENTIRE AGREEMENT.  This Assumption Agreement and the 
     Coinsurance Agreement constitute the sole and entire agreement and
     understanding between the parties hereto, and supersedes all prior
     agreements, whether oral or written, between the parties, with respect
     to the subject matter hereof.

     10.12.  GOVERNING LAW AND FORUM.  This Assumption Agreement shall be
     governed by the laws of the State of New York, without giving effect 
     to principles of conflicts of law thereof.  Both parties hereby 
     irrevocably and unconditionally submit themselves to the exclusive
     jurisdiction of the Courts of the State of New York for any actions,
     suits or proceedings of or relating to this Assumption Agreement and
     the transactions contemplated thereby that cannot be resolved pursuant
     to the provisions or Article VII hereof.

     10.13.  CONFIDENTIALITY.  Except as required by law or regulatory 
     authority, neither the Company nor the Reinsurer shall publicly 
     disclose the purchase price or other terms of the transfer proposed
     herein, but this restriction shall terminate if such price and terms
     shall otherwise become public knowledge.  In the event that the
     Reinsurer or its representative are requested or required by oral 
     questions, interrogatories, requests for information or documents,
     subpoena, civil investigation, demand or similar process to disclose
     any terms or information regarding such transfer it may disclose any
     terms or information regarding such transfer provided, however, that
     to the extent practicable under the circumstances the Reinsurer shall
     give the Company reasonable notice of the order or request before
     making the disclosure provided that such notice can be provided with
     out cost to the Reinsurer.  This Section 10.13 shall survive 
     termination of this Assumption Agreement and the Coinsurance Agreement.

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