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        RELIANCE STANDARD LIFE INSURANCE COMPANY OF TEXAS

                  CONSOLIDATED SURPLUS DEBENTURE


$58,000,000                                      December 1, 1996

          FOR VALUE RECEIVED and subject to the terms, conditions,
restrictions, and limitations contained herein, Reliance Standard
Life Insurance Company of Texas, a Texas life insurance company
("RSL Texas"), promises to pay Delphi Financial Group, Inc., a
Delaware corporation ("Delphi"), the principal amount of
$58,000,000 upon the schedule provided for herein, together with
interest on the unpaid balance thereof at the rate provided for
herein.

          Interest will accrue on the outstanding principal amount
of this Surplus Debenture at an interest rate equal to nine and
one-half percent (9-1/2%) per annum (the "Rate"), and shall be
computed for the actual number of days elapsed on the basis of a
365-day year.  Interest on this Surplus Debenture will be payable
on March 1, June 1, September 1, and December 1 of each year (each
such date being referred to herein as a "Payment Date"), commencing
March 1, 1997.

          The outstanding principal amount of this Surplus
Debenture will be payable in accordance with the following
schedule:

          1997:  $3,750,000 on each Payment Date

          1998:  $4,250,000 on each Payment Date

          1999:  $6,500,000 on each Payment Date

          Both principal of and interest on this Surplus Debenture
will be due and payable at the offices of Delphi or at such other
address as may be specified in writing by the holder hereof.

          1.   On or before each Payment Date, the Surplus of RSL
Texas (as hereinafter defined) will be calculated as of the most
recent date practicable (each such date being hereinafter referred
to as a "Calculation Date").

          2.   On each Payment Date, RSL Texas will pay to Delphi
the lesser of (a) the amount of accrued but unpaid interest on the
unpaid principal balance of this Surplus Debenture or (b) the
amount by which the Surplus of RSL Texas exceeds $500,000 (the
"Surplus Floor") as of the immediately preceding Calculation Date.

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          3.   If, on any Payment Date, the Surplus of RSL Texas as
of the immediately preceding Calculation Date does not exceed the
Surplus Floor by an amount sufficient to pay all interest hereon
then due under paragraph 2(a), the interest which is due but not
paid shall be payable thereafter at such time or from time to time
as the Surplus of RSL Texas exceeds the Surplus Floor.

          4.   On each Payment Date, RSL Texas will pay to Delphi
the lesser of (a) the applicable principal installment amount
provided for in the schedule set forth above or (b) the amount by
which the Surplus of RSL Texas exceeds the Surplus Floor as of the
immediately preceding Calculation Date.

          5.   If, on any Payment Date, the Surplus of RSL Texas as
of the immediately preceding Calculation Date does not exceed the
Surplus Floor by an amount sufficient to pay the entire installment
of principal hereof then due under paragraph 4(a), the remaining
unpaid portion of such principal installment (together with
interest thereon, which shall accrue at the Rate) shall be payable
thereafter at such time or from time to time as the Surplus of RSL
Texas exceeds the Surplus Floor.

          6.   For purposes of this Surplus Debenture, the term
"Surplus of RSL Texas" shall mean, as of any Calculation Date, the
remainder obtained after subtracting the carrying value of the
insurance subsidiaries of RSL Texas (after reducing such carrying
value by the amount of any dividends or distributions paid or made
by such subsidiaries to RSL Texas after such Calculation Date but
prior to the immediately succeeding Payment Date), from the sum of
the following:

     (a)  "aggregate write-ins for other than special surplus
          funds" of RSL Texas;

     (b)  "surplus notes" of RSL Texas;

     (c)  "gross paid in and contributed surplus" of RSL Texas;

     (d)  "aggregate write-ins for special surplus funds" of RSL
          Texas;

     (e)  "unassigned funds (surplus)" of RSL Texas;

     (f)  any amounts required to be carried as liabilities with
          respect to outstanding surplus debentures issued by RSL
          Texas; and

     (g)  any similar item or entry of RSL Texas  having the same
          effect as any of items (a) through (f) of this paragraph
          6.

The items listed in clauses (a) through (g) of this paragraph 6
will be calculated in accordance with accounting practices required
or permitted from time to time by the Texas Department of
Insurance.

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          7.   The obligation of RSL Texas to pay this Surplus
Debenture will not otherwise be or constitute a liability of RSL
Texas or a claim against any of its assets except in the event of
liquidation of RSL Texas, and in no event will this Surplus
Debenture be considered or treated as a current or fixed liability
or obligation of RSL Texas except to the extent required by the
Texas insurance laws or regulations.

          8.   In the event of the liquidation of RSL Texas, this
Surplus Debenture will become immediately due and payable and will
be superior to and in preference of the rights and claims of the
shareholders of RSL Texas; provided, however, that to the extent
required by applicable law, all obligations, rights and claims
hereunder are expressly subordinated to the claims of (a)
policyholders, insureds and beneficiaries under insurance contracts
or policies issued by RSL Texas, and (b) a supervisor, conservator
or receiver of RSL Texas appointed by the Commissioner of Insurance
of the State of Texas.

          9.   All payments made hereunder will be credited first
to accrued but unpaid interest hereon, if any, and the balance of
such payment will be credited to the principal amount hereof.

          10.  Nothing contained herein shall be construed as
prohibiting RSL Texas from merging or consolidating with any other
corporation or from selling or reinsuring any part of its business,
or from acquiring all of any part of the assets of any other
corporation.  In the event that RSL Texas consolidates or merges
into another corporation or transfers all or substantially all of
its assets to any other corporation, the corporation into which RSL
Texas is consolidated or merged or to which the assets of RSL Texas
are transferred will assume the liability of RSL Texas hereunder.

          11.  By acceptance and as a part of the consideration for
the issuance hereof, Delphi expressly acknowledges that it has been
informed and has knowledge that this Surplus Debenture has not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state and that RSL Texas has issued this
Surplus Debenture pursuant to exemptions from registration
available under such acts or laws.  Delphi further expressly
acknowledges and agrees that it is acquiring this Surplus Debenture
for investment purposes and not with a view toward a public
distribution hereof and that this Surplus Debenture may not be sold
or otherwise transferred in the absence of an effective
registration statement with respect hereto or an exemption from
registration under the Securities Act of 1933, as amended, or any
other applicable securities laws.

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          12.  If this Surplus Debenture is collected through
judicial proceedings, RSL Texas agrees, subject to the conditions
and restrictions contained herein, to pay all reasonable legal fees
and disbursements incurred by the holder hereof (whether Delphi,
any pledgee of Delphi or any successor of either) in connection
with such collection.

          13.  This Surplus Debenture may be prepaid at any time or
from time to time without premium or penalty to the extent that the
Surplus of RSL Texas exceeds the Surplus Floor on the Calculation
Date immediately preceding the date of any proposed prepayment. 
Prepayments of this Surplus Debenture will be applied to the
principal installments hereof in the inverse order of their
maturity.

          14.  Pursuant to 28 Tex. Admin. Code Sec. 7.7(e), RSL Texas
will not make any repayment of principal or payment of interest
hereunder which does not comply with the payment schedule provided
for in this Surplus Debenture unless it has given written notice
thereof to the Texas Commissioner of Insurance at least 15 days
before the date scheduled for such repayment or payment.

          15.  No recourse shall be had for the payment of the
principal of, or the interest on, this Surplus Debenture, or any
claims based hereon or otherwise in respect hereof, against any
incorporator, stockholder, officer, employee or director, past,
present or future, of RSL Texas, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.

          16.  This Surplus Debenture will be governed by and
construed in accordance with the laws of the State of Texas
(without regard to principles of conflicts of laws embodied
therein).

          17.  This Surplus Debenture will be binding upon RSL
Texas and its successors and assigns.

          18.  This Surplus Debenture is executed and delivered in
replacement of, and shall supercede, Surplus Debentures No. 001 and
002, issued by RSL Texas (then known as Coronado Life Insurance
Company) to Delphi (then known as RSL Holding Company, Inc.) on
November 6, 1987.

                              RELIANCE STANDARD LIFE INSURANCE
                              COMPANY OF TEXAS


                              By:   /s/ CHARLES P. O'BRIEN     
                                    -------------------------
                                    Charles P. O'Brien
                                    President and 
                                    Chief Executive Officer