<PAGE>

                                                                  Exhibit 3(ii)

                                   I N D E X
                                   ---------

Bye-LAW   Subject
-------   -------

1         Share Capital
2         Common Shares
3         Authority of Board to Issue Shares and Divide Shares Into Different
          Classes
4         The Series B Shares
5         Restrictions on Certain "Business Combinations"
6         Employee Share Purchase
7         Repurchase by Company of its Own Shares
8         Trusts Not Recognised by Company
9         Share Certificates
10        Lost Share Certificates
11        Certificates to be under Seal
12        Register of Members
13-16     Transfer of Shares
17-19     Transmission of Shares
20-22     Increase of Capital
23        Alteration of Capital
24-25     Reduction of Capital
26        General Meetings
27-28     Notice of General Meetings
29-34     Proceedings at General Meetings
35        Inspectors
36-47     Voting
48-53     Proxies and Corporate Representatives
54-56     Appointment and Removal of Directors
57        Resignation and Disqualification of Directors
<PAGE>

58        Directors' Fees and Additional Remuneration and Expenses
59        Directors' Interests
60        Powers and Duties of the Board
61-66     Officers
67        Compensation of Officers of the Company
68-71     Delegation of the Board's Powers
72        Proceedings of the Board
73-80     Telephonic Board Meetings
81        Minutes
82-83     Secretary
84        The Seal
85-91     Dividends and Other Payments
92        Reserves
93-94     Capitalization of Profits
95        Record Dates
96-98     Accounting Records
99        Audit
100-101   Service of Notices and Other Documents
102       Winding Up
103-106   Indemnity
107       Alteration of Bye-Laws
108       Registered Office
109       Interpretation
<PAGE>

                                    BYE-LAWS
                                       of
                          MUTUAL RISK MANAGEMENT LID.

                                 SHARE CAPITAL
                                 -------------


1.   The authorised share capital of the Company is $24,751,835 divided into the
     following classes of shares:
     (i)   180,000,000 Common Shares of $0.01 each (the "Common Shares");
     (ii)  2,951,835 Series B Non-Voting Redeemable Preferred Shares of
           $0.01 each (the "Series B Shares"); and;

     (iii) $20,000,000 of Preferred Shares of such par value (being not less
           than $0.01 each) as the Board shall determine pursuant to the terms
           of Bye-Law 3 hereof (the "Preferred Shares").

                                 COMMON SHARES
                                 -------------
2.   (1)   At a general meeting of the Company every holder of Common shares
           shall, on a show of hands, be entitled to one vote, and on a poll,
           shall be entitled to one vote for every share held by him.
     (2)   The Board may in its discretion, at any time, and from time to time,
           issue or cause to be issued all or any part of the authorised but
           unissued Common Shares of the Company for consideration of such
           character and value as the Board shall in its absolute discretion
           from time to time fix or determine.

         AUTHORITY OF BOARD TO ISSUE AND DIVIDE PREFERRED SHARES INTO
         ------------------------------------------------------------
                               DIFFERENT CLASSES
                               -----------------

3.   (1)   The Board may in its discretion at any time, and from time to
           time, issue or cause to be issued all or any part of the authorised
           but unissued Preferred Shares of the
<PAGE>

           Company for consideration of such character and value as the Board
           shall in its absolute discretion from time to time fix or determine.

     (2)   Without prejudice to the generality of (1) hereof, the Board is
           hereby further expressly authorised at any time, and from time to
           time, to divide any or all of the authorised but unissued Preferred
           Shares of the Company into several classes, to consolidate or sub-
           divide and to set the par value of any of the unissued Preferred
           Shares, and in the resolution or resolutions establishing a
           particular series, before issuance of any of the shares thereof, to
           fix and determine the number of shares and the design ation of such
           series, so as to distinguish it from the shares of all other series
           and classes, and to fix and determine the voting rights, preferences,
           qualifications, privileges, limitations, options, conversion rights,
           redemption features, restrictions, and other special or relative
           rights of such series. Each of such series may differ from every
           other series previously authorised, as may be determined by the Board
           in any or all respects, to the fullest extent now, or hereafter
           permitted by the laws of Bermuda including, but not limited to, the
           variations between different series in the following respects:
     (a)   the distinctive designation of such series and the number of shares
           which shall constitute such series, which number may be increased or
           decreased (but not below the number of shares thereof then
           outstanding) from time to time by the Board;
     (b)   the annual dividend or dividend rate for such series, and the date or
           dates from which dividends shall commence to accrue;
     (c)   the par value of the shares prior to issue, provided however, that
           the par value shall in no case be set at less than $0.01 per share;
     (d)   the price or prices at which, and the terms and conditions on which,
           if any, the shares of such series may be redeemed or made redeemable;
     (e)   the purchase or sinking fund provisions, if any, for the purchase or
           redemption of shares of such series;
     (f)   subject to the terms of Bye-Law 4 hereof, the preferential amount or
           amounts, if any, payable upon shares of such series in the event of
           the liquidation, dissolution, or
<PAGE>

           winding up of the Company;
     (g)   the terms and conditions, if any, upon which shares of such series
           may be converted and the class or series of shares of the Company or
           other securities into which such shares may be converted;
     (h)   the relative seniority, priority or junior rank of such series as to
           dividends or assets in relation to any other classes or series of
           capital shares then or thereafter to be issued;
     (i)   such other terms, preferences, qualifications, privileges,
           limitations, options, restrictions, and other special rights, if any,
           of shares of such series as the Board may, at the time of such
           resolution or resolutions, lawfully fix or determine;
     (j)   cancel shares which, at the date of the passing of the resolution in
           that behalf, have not been taken or agreed to be taken by any person;
     (k)   where any difficulty arises in regard to any division, consolidation,
           or sub-division under this Bye-Law, the Board may settle the same as
           it thinks expedient and, in particular, may arrange for the sale of
           the shares representing fractions and the distribution of the net
           proceeds of sale in due proportion amongst the Members who would have
           been entitled to the fractions, and for this purpose the Board may
           authorise some person to transfer the shares representing fractions
           to the purchaser thereof, who shall not be bound to see to the
           application of the purchase money nor shall his title to the shares
           be affected by any irregularity or invalidity in the proceedings
           relating to the sale.


                              THE SERIES B SHARES
                              -------------------

4.   (1)   The Series B Shares shall confer on the holders thereof the right, in
           priority to the shares of any other class of the Company, to fixed
           cumulative preferential semi-annual dividends, payable on l5th
           February and l5th August in each year, commencing on 15th August
           1987, at an annual rate which shall be computed on the par value of
           US$1.00 per Series B Share equal to the six-months London Interbank
<PAGE>

           Offered Rate ruling on the lst August, in the case of the semiannual
           dividend payable on 15th February and on lst January in the case of
           the semi-annual dividend payable on 15th August in each year, or if
           no such rate shall have been quoted on that date, on the next
           following date upon which such rate shall have been quoted. Provided
           that, if the aggregate amount of any semi-annual dividend payable to
           the holders of the Series B Shares shall be greater than an amount
           equal to the net profit (as hereinafter defined) of the Company for
           the first or second half (as the case may be) of its financial year
           ended immediately prior to the date for payment of such semi-annual
           dividend, then and in such event the aggregate amount of such
           dividend so payable may be reduced to an amount equal to the net
           profit of the Company established as aforesaid for the relevant half
           of its said financial year and the annual rate of such dividend shall
           be computed accordingly. Provided that, if on any date for the
           payment of a semi-annual dividend on the Series B Shares the Company
           shall either :
           (a) be permitted to pay a reduced semi-annual dividend for the reason
               hereinbefore in this paragraph described, or
           (b) have insufficient moneys available to enable it to pay the
               semi-annual dividend without borrowing additional monies for
               the purpose, or
           (c) if the Board shall, in its discretion, have decided that it is
               contrary to the interests of the Company to pay all or part of a
               semi-annual dividend on the due date for payment thereof, or that
               it is in the interests of the Company to transfer moneys
               otherwise available for payment of dividends to reserves created
               to meet one or more specified contingencies,

           any amount of semi-annual dividend unpaid shall accumulate, with
           interest at the rate hereinafter mentioned, and shall be added to the
           next semi-annual dividend payable thereafter and thenceforth until
           the same shall have been paid in full with interest as aforesaid and
           no dividend shall be paid on any share of any other class of the
           Company while any semi-annual dividend on the Series B Shares, or any
           part thereof, or any interest accrued thereon shall be in arrears and
           unpaid. Provided that the amount of any semi-annual dividend which
           shall be unpaid on the due date for
<PAGE>

           payment thereof shall bear interest at the same rate as is applicable
           to the fixed cumulative preferential semi-annual dividends pursuant
           to paragraph 1 hereof, such interest to accrue from the said due date
           and be paid by the Company on the date of payment of the arrears of
           semi-annual dividend from which it shall have arisen.

     (2)   In the event that payment of all or any part of a semiannual dividend
           on the Series B Shares shall not be made on the due date for payment
           thereof by decision of the Board pursuant to sub-paragraph (c) of
           paragraph 1 hereof, and if, by subsequent decisions of the Board
           pursuant to the same sub-paragraph (c), payment thereof shall not
           have been made at the expiration of two years from the said due date,
           the discretions granted to the Board by the said sub-paragraph (c)
           shall ipso facto be vested in the holders of the Series B Shares, so
           that any decision to defer further the payment of the said semi-
           annual dividend shall be made only with the consent in writing of the
           holders of a majority of the Series B Shares, or with the sanction of
           a resolution passed at a separate general meeting of the holders of
           such shares and the Board shall, forthwith upon the expiry of the
           said period of two years, or upon the first date thereafter when the
           Company shall have funds lawfully available for the payment of such
           deferred dividend and the moneys with which to pay the same, either
           cause the Company to pay the full amount of the deferred dividend,
           with interest as aforesaid, or take all such steps as may be
           necessary to obtain such consent or sanction without delay.

     (3)   The expression "net profit" shall mean in relation to the Series B
           Shares the total of all the operating revenues of the Company and its
           subsidiaries for the period in question, including realised gains,
           less the total of all the operating expenses of the Company and its
           said subsidiaries, including realised losses, after eliminating the
           balances of all inter-company accounts between the Company and its
           said subsidiaries and between any two of such subsidiaries.

     (4)   The Company shall on 15th August, 1997 redeem at the price of $1.00
           (U.S.) per
<PAGE>

           share all of the Series B Shares. No dividend shall be declared or
           paid on any share of any class of the Company on or after the 15th
           August, 1997, until all of the Series B Shares shall have been
           redeemed as aforesaid.

     (5)   Without prejudice to the foregoing, the Company may at any time and
           from time to time prior to 15th August, 1997, upon giving not less
           than one month's prior notice in writing to the holders thereof,
           redeem all or any part of the Series B Shares at the price of $1.00
           (U.S.) per share out of moneys of the Company which may be lawfully
           be applied for that purpose. In the case of any redemption of less
           than all of the Series B Shares, the Board shall have power to decide
           in its discretion the manner in which the particular Series B Shares
           to be redeemed shall be determined and the manner in which any
           fractions of Series B Shares arising on a partial redemption shall be
           dealt with.

     (6)   The holders of the Series B Shares shall be entitled on a winding-up
           in priority to the holders of shares of any other class of the
           Company, to receive out of the assets of the Company available for
           distribution to Members a sum equal to the amount which would have
           been received by the holder of the Series B Shares in the event that
           all of the Series B Shares outstanding on the day prior to the date
           of commencement of winding up had been redeemed on that day.

     (7)   The provisions of these Bye-Laws relating to the convening of a
           Special General Meeting of the Company shall mutatis mutandis apply
           to the convening of a Special General Meeting of the holders of
           Series B Shares for the matters referred to herein.

     (8)   The holders of the Series B Shares shall not be entitled to any
           further or other right to participate in the profits or assets of the
           Company.

     (9)   The holders of the Series B Shares shall not be entitled to receive
           notice of, or to attend or vote at, any annual general meeting or
           special general meeting of Members
<PAGE>

           of the Company.

     (10)  Series B Shares are not convertible.

                RESTRICTIONS ON CERTAIN "BUSINESS COMBINATIONS"
                -----------------------------------------------

5.   (1)   Except as permitted by sub-section (2) of this Bye-Law, no Interested
           Shareholder (as hereinafter defined) shall, whether directly or
           indirect, be a party to or take any action in connection with any
           Business Combination with the Company or any of its subsidiary
           companies for a period of five years commencing on the date such
           person first became an interested Shareholder.

     (2)   The restrictions contained in sub-section (1) of this section shall
           not apply to a Business Combination:(i) if the Business Combination
           is approved by prior resolution of the Continuing Directors (as that
           term is hereinafter defined) of the Board (whether such approval is
           made prior to or subsequent to the acquisition of, or announcement of
           public disclosure of the intention to acquire, beneficial ownership
           of voting shares that caused the Interested Shareholder to become an
           Interested Shareholder); or (ii) if the Business Combination is
           approved by prior resolution of a majority of outstanding voting
           shares of the Company other than those beneficially held by an
           Interested Shareholder.

     (3)   For the purposes of this Bye-Law:-
           (a)   "beneficial owner" when used with respect to any share means a
                 person:-
           (i)   who individually or with or through any Subsidiary or Affiliate
                 beneficially owns such share, directly or indirectly; or
           (ii)  who individually or with or through any Subsidiary or Affiliate
                 beneficially owns such share, directly or indirectly; or (2)
                 who individually or with or through any Subsidiary or Affiliate
                 has:-
                 (a)  the right to acquire such share (whether such right is
                      exercisable
<PAGE>

                      immediately or only after the passage of time) pursuant to
                      an-v agreement, arrangement or understanding (whether or
                      not in writing), or upon the exercise of conversion
                      rights, exchange rights, warrants or options or otherwise;
                      provided however, that a person shall not be deemed the
                      beneficial owner of any share tendered pursuant to a
                      tender or exchange offer until such offer is accepted; or

                 (b)  the right to vote such share pursuant to any agreement,
                      arrangement or understanding (whether or not in writing);
                      provided however, that a person shall not be deemed the
                      beneficial owner of any share under this sub-
                      paragraph(ii) if the right to vote such share arises:-
                      (i)   solely from a revocable proxy or consent given in
                            response to a proxy or consent solicitation made to
                            shareholders or any class of shareholders generally;
                            or
                      (ii)  solely under a nominee or trustee agreement where
                            the nominee or trustee has no economic interest in
                            the share (other than the right to be paid normal
                            nominee or trustee fees or remuneration);
                      (iii) who has any agreement, arrangement or understanding
                            (whether or not in writing) for the purpose of
                            acquiring, holding, voting (except where the right
                            to vote is within the exclusion of sub-paragraphs
                            (i) or (ii) of paragraph (2)(b) above or disposing
                            of such share with any other person who beneficially
                            owns, or whose subsidiaries or affiliates directly
                            or indirectly beneficially own such share or any
                            interest therein;

                     but does not include an underwriter, acting in the ordinary
                     course of his business as an underwriter, who acquires
                     shares pursuant to any issue or offer of shares
                     underwritten by him.

                 (b) "Business Combination" means:-
                     (i)   any scheme of arrangement, reconstruction or
                           amalgamation
<PAGE>

                           involving the Company or any of its Subsidiaries and
                           an Interested Shareholder;
                     (ii)  any transaction or series of transactions involving
                           the sale, purchase, lease, exchange, mortgage,
                           pledge, transfer or other disposition or encumbrance
                           of assets between the Company or any of its
                           Subsidiaries and any Interested Shareholder having an
                           aggregate market value in excess of 5% of the
                           consolidated value in the Company and its
                           Subsidiaries prior to the relevant transaction or
                           series of transactions;
                     (iii) the issue or transfer to an Interested Shareholder or
                           any Affiliate thereof of any securities by the
                           Company or any of its Subsidiaries other than an
                           issue or distribution to all Shareholders of the
                           Company entitled to participate therein (such
                           entitlement not being dependent upon or affected by
                           any scheme or proposed by an Interested Shareholder)
                           pro rata to their respective entitlements ;
                     (iv)  the adoption of any plan or proposal for the
                           liquidation or dissolution of the Company or any of
                           its Subsidiaries unless such plan or proposal is
                           initiated, proposed or adopted independently of, and
                           not by agreement or arrangement with, any Interested
                           Shareholder or any Affiliate thereof;
                     (v)   the reclassification of any securities or other
                           restructuring of the capital of the Company or any of
                           its Subsidiary companies in such a way as to confer a
                           benefit on an Interested Shareholder or any Affiliate
                           thereof which is not conferred on the Members
                           generally; or (vi) the making by the Company or any
                           of its Subsidiaries of any loans, advances,
                           guarantees, pledges or financial assistance to an
                           Interested Shareholder;

                 (c) The term "Continuing Director" means (i) any member of the
                     Board, while such person is a member of the Board who is
                     not an Interested
<PAGE>

                     Shareholder or an Affiliate or Associate or representative
                     of the Interested Shareholder and was a member of the Board
                     prior to the time that the Interested Shareholder became an
                     Interested Shareholder, and (ii) any person who
                     subsequently becomes a member of the Board, while such
                     person is a member of the Board, who is not an Interested
                     Shareholder or an Affiliate or Associate or representative
                     of the Interested Shareholder, if such person's nomination
                     for election or election to the Board is recommended or
                     approved by a majority of the Continuing Directors then in
                     office;
                (d)  "Interested Shareholder" means a Member of the Company
                     (other than the Company or any Subsidiary, any profit-
                     sharing employee share ownership or other employee benefit
                     plan of the Company or any Subsidiary or any trustee of or
                     fiduciary with respect to any such plan when acting in such
                     capacity) who is, or has announced or publicly disclosed a
                     plan or intention to become, the beneficial owner of Common
                     Shares representing ten percent (10%) or more of the votes
                     entitled to be cast by the holders of all then outstanding
                     voting shares of the Company. For the purposes of
                     determining whether a person is an Interested Shareholder
                     for the purposes hereof, the number of shares deemed to be
                     outstanding shall include shares deemed beneficially owned
                     by such person through application of this paragraph (3)
                     hereof, but shall not include any other shares that may be
                     issuable pursuant to any agreement, arrangement or
                     understanding, or upon exercise of conversion rights,
                     warrants or options, otherwise;

                 (e) "person" includes:-
                     (i)    any person acting in concert with him or any nominee
                            for him or person acting on his behalf; (ii) any
                            company in which such person holds or beneficially
                            owns 10% or more of the shares carrying voting
                            rights or rights over shares; or (iii) any person
<PAGE>

                            or entity over which the person acquiring the shares
                            has, directly or indirectly, the power to direct or
                            cause the direction of management or policies;
                 (f) "persons acting in concert" include:-
                     (i)    persons who, pursuant to an agreement, arrangement
                            or understanding (whether formal or informal),
                            actively co-operate either in the acquisition by any
                            of them of any holding of shares or of the
                            beneficial ownership of shares or right over shares
                            in the Company or in the exercise of voting rights
                            with respect to shares in the Company;
                     (ii)   a company with any of its directors (or their close
                            relatives, nominees, related trusts or companies in
                            which any director holds or beneficially owns 10% or
                            more of the shares carrying voting rights or rights
                            over shares);
                     (iii)  a company with the trustees or managers of any of
                            its pension, provident or employee benefit funds or
                            any employee stock option scheme which involves the
                            issue of shares in the company to such trustees for
                            the benefit of employees;
                     (iv)   a person who is a fund manager with any investment
                            company, unit trust or other person whose
                            investments such person manages on a discretionary
                            basis, in respect of the relevant investment
                            accounts;
                     (v)    a company with its parent company or any of its
                            Subsidiary companies; or
                     (vi)   a company, in which 10% or more of the shares
                            carrying voting rights or rights over shares are
                            held or beneficially owned by a person, with any
                            other company in which 10% or more of the shares
                            carrying voting rights or rights over shares are
                            held or beneficially owned by the same person;
                 (g) "rights over shares" includes any rights acquired by a
                     person of an
<PAGE>

                     agreement to acquire shares of an option to acquire shares
                     or an irrevocable commitment to accept an offer to acquire
                     shares and includes warrants or options to subscribe for
                     shares in a company if immediately exercisable, as if such
                     warrants or option had at the relevant time been exercised;
               (h)   "securities" includes shares, debentures, and options or
                     warrants to subscribe for or purchase any shares or
                     debentures, and any rights in respect thereof or any other
                     right which if exercised would enable a person not
                     otherwise able so to do, to exercise voting rights in
                     excess of the threshold;
               (i)   "threshold" means 10% or more of the voting rights;
               (j)  "voting rights" means all the voting rights attributable to
                     the share capital of the Company which are currently
                     exercisable, or, in the case of options and warrants to
                     subscribe for shares, would be exercisable if those options
                     and warrants were themselves exercised, at a general
                     meeting of the Company;
               (k)   a person shall be deemed not to acquire or hold any share
                     if he acquires or holds such share solely as nominee or
                     bare trustee thereof and has no beneficial or economic
                     interest therein other than the right to be paid normal
                     nominee or trustee fees or remuneration;
               (l)   the terms "Affiliate" and "Associate" shall have the
                     respective meanings ascribed to such terms in Rule 12b-2
                     under the United States Securities Exchange Act as in
                     effect on April 10, 1991 (the term "registrant" in said
                     Rule 12b-2 meaning in this case the Company);
               (m)   the term "Subsidiary" for the purposes of this Bye-Law
                     means any company of which a majority of any class of
                     equity security is beneficially owned by the Company .
<PAGE>

                            EMPLOYEE SHARE PURCHASE
                            -----------------------

6.   (1)  The Board may from time to time:-
          (a)  establish a scheme or schemes whereby the Company provides money
               for the purchase of, or subscription for, fully-paid shares or
               share options or in relation to share bonus plans for Common
               Shares in the Company or its holding company, if any, being a
               purchase of subscription by trustees of or for shares to be held
               by or for the benefit of employees of the Company or of its
               associated company;
          (b)  provide for the making by the Company of loans to persons, other
               than Directors, bona fide in the employment of the Company or of
               its associated company, with a view to enabling those persons to
               purchase or subscribe for fully-paid shares in the Company or its
               holding company, to be held by themselves by way of beneficial
               ownership; and
          (c)  provide for the giving by the Company, directly or indirectly of
               financial assistance, whether by means of a loan, guarantee, the
               provision of security or otherwise, to its bona fide employees,
               or the bona fide employees of any associated company or not they
               shall also be Directors, in order that they shall also be
               Directors, in order that they may buy shares in the Company and
               the Board may, in its discretion, from time to time require, as
               one of the terms of issue of any such shares or by contract, that
               any such employee shall be required or allowed to sell such
               shares to the Company, upon such terms and at such price as the
               Board may by such terms of issue or contract establish, when such
               employee ceases to be employed by the Company or its associated
               company.

     (2)  For the purposes of this Bye-Law a company shall be deemed to be an
          associated company of the Company if shares of the first-mentioned
          company carrying fifty percent or more of the votes for the election
          of directors are held, otherwise than by
<PAGE>

          way of security directly or indirectly, by or for the benefit of the
          Company.

                    REPURCHASE BY COMPANY OF ITS OWN SHARES
                    ---------------------------------------

7.   Subject to these Bye-Laws any purchase by the Company of any class of its
     own shares in exercise of the powers conferred by Section 42A of the
     Companies Act 1981, shall be on such terms and conditions as the Board
     shall determine.

                        TRUSTS NOT RECOGNISED BY COMPANY
                        --------------------------------

8.   Except as ordered by a court of competent jurisdiction or as required by
     law, no person shall be recognised by the Company as holding any share upon
     trust and the Company shall not be bound by or required in any way to
     recognise (even when having notice thereof) any equitable, contingent,
     future or partial interest in any share or any interest in any fractional
     part of a share or (except only as otherwise provided in these Bye-laws or
     by law) any other right in respect of any share except an absolute right to
     the entirety thereof in the registered holder.

                               SHARE CERTIFICATES
                               ------------------

9.   The preparation, issue and delivery of certificates shall be governed by
     the Companies Acts. In the case of a share held jointly be several persons,
     delivery of a certificate to one of several joint holders shall be
     sufficient delivery to all.

                            LOST SHARE CERTIFICATES
                            -----------------------

10.  If a share certificate is defaced, lost or destroyed it may be replaced
     without fee but on such terms (if any) as to evidence and indemnity and to
     payment of the costs and out of pocket expenses of the Company in
     investigating such evidence and preparing such indemnity as the Board may
     think fit and, in the case of defacement, on delivery of the old
     certificate to
<PAGE>

     the Company.

                         CERTIFICATES TO BE UNDER SEAL
                         -----------------------------

11.  All certificates for share or loan capital or other securities of the
     Company (other than letters of allotment, scrip certificates and other like
     documents) shall, except to the extent that the terms and conditions for
     the time being relating thereto otherwise provide, be issued under the
     Seal.  The Board may by resolution determine, either generally or in any
     particular case, that any signatures on any such certificates need not be
     autographic but may be affixed to such certificates by some mechanical
     means or may be printed thereon or that such certificates need not be
     signed by any persons.

                              REGISTER OF MEMBERS
                              -------------------

12.  (1)  The Secretary and/or the Company's duly appointed Registrar and
          Transfer Agent shall establish and maintain the Register of Members
          which shall be available for inspection at the office of the Registrar
          and Transfer Agent and at the Registered Office in the manner
          prescribed by the Companies Acts.  Unless the Board otherwise
          determines, the Register of Members shall be open to inspection in the
          manner prescribed by the Companies Acts between 10:00 a.m. and 12:00
          noon on every working day.  Unless the Board so determines, no Member
          or intending Member shall be entitled to have entered in the Register
          any indication of any trust or any equitable, contingent, future or
          partial interest in any share or any interest in any fractional part
          of a share and if any such entry exists or is permitted by the Board
          it shall not be deemed to abrogate any of the provisions of Bye-Law 8.
     (2)  The Secretary and/or the Company's duly appointed Registrar and
          Transfer Agent, if there be one then acting, shall prepare and make,
          at least ten days before every meeting of Members, a complete list of
          the Members entitled to vote at the meeting, arranged in alphabetical
          order, and showing the address of each Member and the number of shares
          registered in the name of each Member. Such list shall be open to
<PAGE>

          the examination of any Member, 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, at the place where the meeting is to be held or
          at the office of the Transfer Agent. The list shall also be produced
          and kept at the time and place of the meeting during the whole time
          thereof, and may be inspected by any Member who is present.
     (3)  For the purposes of this Bye-Law, "Registrar and Transfer Agent" shall
          be deemed to include the duly appointed Co-Registrar and Co-Transfer
          Agent of the Company.

                               TRANSFER OF SHARES
                               ------------------

13.  Subject to the Companies Acts and to the restrictions contained in these
     Bye-Laws as may be applicable, any Member may transfer all or any of his
     shares by an instrument of transfer in the usual common form or in any
     other form which the Board may approve.

14.  The instrument of transfer of a share shall be signed by or on behalf of
     the transferor and where any share is not fully-paid the transferee, and
     the transferor shall be deemed to remain the holder of the share until the
     name of the transferee is entered in the Register in respect thereof.  All
     instruments of transfer when registered may be retained by the Company.
     The Board may, in its absolute discretion and without assigning any reason
     therefor, decline to register any transfer of any share which is not a
     fully-paid share.

     The Board may also decline to register any transfer unless:-
     (a)  the instrument of transfer is lodged with the Company, accompanied by
          the certificate for the shares to which it relates, and such other
          evidence as the Board may reasonably require to show the right of the
          transferor to make the transfer,
     (b)  the instrument of transfer is in respect of any one class of share,
     (c)  where applicable, the permission of the Bermuda Monetary Authority
          with respect thereto has been obtained,
     (d)  it shall be satisfied that the proposed transfer is in compliance with
          the United States
<PAGE>

          Securities Act of 1933.

15.  If the Board declines to register a transfer it shall, within three months
     after the date on which the instrument of transfer was lodged, send to the
     transferee notice of such refusal.

16.  No fee, other than reimbursement of any expenses or taxes incurred by the
     Company, shall be charged by the Company for registering any transfer,
     probate, letters of administration, certificate of death or marriage, power
     of attorney, distringas or stop notice, order of court or other instrument
     relating to or affecting the title to any share, or otherwise making an
     entry in the Register relating to any share.

                             TRANSMISSION OF SHARES
                             ----------------------

17.  Subject to the Companies Act and these Bye-Laws, in the case of the death
     of a Member, the survivor or survivors, where the deceased was joint
     holder, and the estate representative, where he was sole holder, shall be
     the only person recognised by the Company as having any title to his
     shares; but nothing herein contained shall release the estate of a deceased
     holder (whether the sole or joint) from any liability in respect of any
     share held by him solely or jointly with other persons. For the purpose of
     this Bye-Law, estate representative means the person to whom probate or
     letters of administration has or have been granted in Bermuda or, failing
     any such person, such other person as the Board may in its absolute
     discretion determine to be the person recognised by the Company for the
     purpose of this Bye-Law.

18.  Subject to the Companies Acts and these Bye-Laws, any person becoming
     entitled to a share in consequence of the death of a Member or otherwise by
     operation of applicable law may, subject as hereafter provided and upon
     such evidence being produced as may from time to time be required by the
     Board as to his entitlement, either be registered himself as the holder of
     the share or elect to have some person nominated by him registered as the
     transferee thereof. If the person so becoming entitled elects to be
     registered himself, he shall deliver or send to the Company a notice in
     writing signed by him stating that he so elects. If he shall
<PAGE>

     elect to have his nominee registered, he shall signify his election by
     signing an instrument of transfer of such share in favour of his nominee.
     All the limitations, restrictions and provisions of these Bye-Laws relating
     to the right to transfer and the registration of transfer of shares shall
     be applicable to any such notice or instrument of transfer as aforesaid as
     if the death of the Member or other event giving rise to the transmission
     had not occurred and the notice or instrument of transfer as an instrument
     of transfer signed by such Member.

19.  A person becoming entitled to a share in consequence of the death of a
     Member or otherwise by operation of applicable law shall (upon such
     evidence being produced as may from time to time be required by the Board
     as to his entitlement) be entitled to receive and may give a discharge for
     any dividends or other moneys payable in respect of the share to receive
     notices of or to attend or vote at general meetings of the Company or, save
     as aforesaid, to exercise in respect of the share of any of the rights or
     privileges of a member until he shall have become registered as the holder
     thereof.  The Board may at any time give notice requiring such person to
     elect either to be registered himself or to transfer the share and if the
     notice is not complied with within sixty days the Board may thereafter
     withhold payment of all dividends and other moneys payable in respect of
     the shares until the requirements of the notice have been complied with.

                              INCREASE OF CAPITAL
                              -------------------

20.  Without prejudice to the powers conferred on the Board of Directors in Bye-
     Laws 2 and 3 hereof and subject to the Companies Acts and these Bye-Laws,
     the Company may from time to time increase its authorised share capital
     detailed in Bye-Law 1 hereof by such sum to be divided into shares of such
     par value as the Company in general meeting shall prescribe.

21.  The Company may, but shall not be bound to do so, by the resolution
     increasing the capital, direct that the new shares or any of them shall be
     offered n the first instance either at par or at a premium or (subject to
     the provisions of the Companies Acts) at a discount to all the holders for
     the time being of shares of any class or classes in proportion to the
     number of
<PAGE>

     such shares held by them respectively or make any other provision as to the
     issue of the new shares.

22.  The new shares shall be subject to all the provisions of these Bye-Laws.

                             ALTERATION OF CAPITAL
                             ---------------------

23.  Subject to the Companies Acts and to any confirmation or consent required
     by law or these Bye-Laws, the Company may by resolution in general meeting
     from time to time convert any preference shares into redeemable preference
     shares.

                              REDUCTION OF CAPITAL
                              --------------------

24.  Subject to the Companies Acts, its memorandum and any confirmation or
     consent required by law or these Bye-Laws, the Company may from time to
     time in general meeting authorise the reduction of its authorised share
     capital or any capital redemption reserve fund or any share premium or
     contributed surplus account in any manner; provided however, that any
     resolution for the reduction of the authorised share capital of the Company
     shall only be effective if the same is approved by the affirmative vote of
     seventy five percent (75%) of the outstanding Voting Shares of the Company
     duly case at a general meeting of the Company called for that purpose.

25.  In relation to any such reduction, the Company may in general meeting
     determine the term upon which such reduction is to be effected including in
     the case of a reduction of part only of a class of shares, those shares to
     be affected.

                                GENERAL MEETINGS
                                ----------------

26.  (1)  The Board shall convene and the Company shall hold general meetings as
          Annual General Meetings in accordance with the requirements of the
          Companies Acts. The
<PAGE>

          Board may, whenever it thinks fit, and shall, when required by the
          Companies Acts, convene general meetings other than Annual General
          Meetings which shall be called Special General Meetings. Except with
          the unanimous approval of the Board, all Annual and Special General
          Meetings of the Company shall be held in Bermuda. Any resolution or
          matter which requires the approval of the Members of the Company shall
          only be approved at an annual or special general meeting of the
          Company called for the purpose in accordance with the provisions of
          these Bye-Laws and, for the avoidance of any doubt, Members may not
          act by written consent or a resolution in writing.
     (2)  In accordance with the terms of the Mutual Risk Management Ltd.
          Company Act 1991, the percentage of the paid up capital of the Company
          carrying the right to vote at general meetings of the Company which
          shall be necessary to requisition a Special General Meeting of the
          Members pursuant to Section 74 of the Companies Act shall be 50% or
          more.

                           NOTICE OF GENERAL MEETINGS
                           --------------------------

27.  (1)  An Annual General Meeting and any Special General Meeting shall be
          called by not less than 21 clear days' notice in writing.  For the
          purposes of this Bye-Law, the expression "clear days'" means that the
          day on which the notice is despatched and the day of the meeting shall
          not be counted in calculating the notice period.

          Notice of every general meeting shall be given in any manner permitted
          by these Bye-Laws to all Members other than such as, under the
          provisions of these Bye-Laws or the terms of issue of the shares they
          hold, are not entitled to receive such notice from the Company.

          Notwithstanding that a meeting of the Company is called by shorter
          notice than that specified in this Bye-Law, it shall be deemed to have
          been duly called if it is so agreed:-
<PAGE>

          (a)  in the case of a meeting called as an Annual General Meeting, by
               all the Members entitled to attend and vote thereat;
          (b)  in the case of any other meeting, by a majority in number of the
               Members having the right to attend and vote at the meeting, being
               a majority together holding not less than 95 percent in nominal
               value of the shares giving that right.
     (2)  At any annual or Special General Meeting of the Members, only such
          business shall be conducted as shall have been properly brought before
          the meeting.  To be properly brought before an Annual or Special
          General Meeting, business must be specified in the notice of meeting
          (or any supplement thereto) given by or at the direction of the Board,
          otherwise properly brought before the meeting by or at the direction
          of the Board, or otherwise properly brought before the meeting by a
          Member.  In addition to any other applicable requirements, for
          business to be properly brought before an Annual or Special General
          Meeting by a Member, the Member must have given timely notice thereof
          in writing to the Secretary of the Company. To be timely, a Member's
          notice must be delivered to or mailed and received at the registered
          office of the Company, not less than 50 days nor more than 75 days
          prior to the meeting; provided however, that in the event that less
          than 65 days' notice or prior public disclosure of the date of the
          meeting is given or made to Members, notice by the Member to be timely
          must be so received not later than the close of business on the 15th
          day following the day on which such notice of the date of the Annual
          or Special General Meeting was mailed or such public disclosure was
          made.  A Member's notice to the Secretary shall set forth as to each
          matter the Member proposes to bring before the meeting (i) a brief
          description of the business desired to be brought before the meeting
          and the reasons for conducting such business at the meeting, (ii) the
          name and record address of the Member proposing such business, (iii)
          the class and number of shares of the Company which are beneficially
          owned by the Member, (iv) any material interest of the Member in such
          business.  Provided at all times that Members may only give notice to
          the Secretary of matters to be brought before an Annual or Special
          General Meeting for the purposes of this Bye-Law that are matters
<PAGE>

          that are suitable and appropriate for submission to general meetings
          of the Members of a publicly-quoted company.

          Notwithstanding anything in the Bye-Laws to the contrary, no business
          shall be conducted at an Annual or Special General Meeting except in
          accordance with the procedures set forth in this Bye-Law.  Provided
          however, that nothing in this Bye-Law shall be deemed to preclude
          discussion by any Member of any business properly brought before the
          Annual or Special General Meeting in accordance with the procedures
          herein detailed.

          The Chairman of an Annual or Special General Meeting shall, if the
          facts warrant, determine and declare to the meeting that business was
          not properly brought before the meeting in accordance with the
          provisions of this Bye-Law, and if he should so determine, he shall so
          declare to the meeting and any such business not properly brought
          before the meeting shall not be transacted.

          For the avoidance of doubt, it is hereby noted that any nomination or
          nominations of persons for election to the Board of the Company made
          in accordance with the provisions of Bye-Law 54 hereof shall be deemed
          for the purposes of this Bye-Law to constitute business properly
          brought before an Annual or Special General Meeting, as the case may
          be.

28.  The accidental omission to give notice of a meeting or (in cases where
     instruments of proxy are sent out with the notice) the accidental omission
     to send such instrument of proxy to, or the non-receipt of notice of a
     meeting or such instrument of proxy by, any person entitled to receive such
     notice shall not invalidate the proceedings at that meeting.

                        PROCEEDINGS AT GENERAL MEETINGS
                        -------------------------------

29.  No business shall be transacted at any general meeting unless it shall have
     been properly
<PAGE>

     brought before the Annual or Special General Meeting in accordance with
     Bye-Law 27(2) hereof and a quorum is present when the meeting proceeds to
     business, but the absence of a quorum shall not preclude the appointment,
     choice or election of a chairman which shall not be treated as part of the
     business of the meeting. Save as otherwise provided in these Bye-Laws, at
     least two Members representing not less than 30% of the outstanding shares
     carrying the right to vote in the Company, represented in person or by
     proxy, shall constitute a quorum for all purposes.

30.  If within five minutes (or such longer time as the Chairman of the meeting
     may determine to wait) after the time appointed for the meeting, a quorum
     is not present, the meeting, if convened on the requisition of Members,
     shall be dissolved.  In any other case, it shall stand adjourned to such
     other day and such other time and place as the Chairman of the meeting may
     determine and at such adjourned meeting two Members present in person
     (whatever the number of shares held by them) shall be a quorum.  The
     Company shall give not less than 7 days' notice of any meeting adjourned
     through want of a quorum and such notice shall state that two Members
     present in person (whatever the number of shares held by them) shall be a
     quorum.

31.  Each Director shall be entitled to attend and speak at any general meeting
     of the Company.

32.  The Chairman of the Board shall preside as Chairman at every general
     meeting.  In his absence, the following shall preside in the order stated:
     the President or any Senior Vice President.  If none of the foregoing is
     present within five minutes after the time appointed for holding the
     meeting, or if none of them is willing to act as Chairman, the Directors
     present shall choose one of  their number to act or if one Director only is
     present he shall preside as Chairman if willing to act.  If no Director is
     present or if each of the Directors present declines to take the chair, the
     persons present and entitled to vote on a poll shall elect one of their
     number to be Chairman.

33.  The Chairman may, with the consent of any meeting at which a quorum is
     present (and shall
<PAGE>

     if so directed by the meeting), adjourn the meeting from time to time and
     from place to place but no business shall be transacted at any adjourned
     meeting except business which might lawfully have been transacted at the
     meeting from which the adjournment took place. When a meeting is adjourned
     for three months or more, notice of the adjourned meeting shall be given as
     in the case of an original meeting.

34.  Save as expressly provided by these Bye-Laws, it shall not be necessary to
     give any notice of an adjournment or of the business to be transacted at an
     adjourned meeting.

                                   INSPECTORS
                                   ----------

35.  The Board may, in advance of any meeting of Members, appoint one or more
     inspectors to act at such meeting or any adjournment thereof.  If the
     inspectors shall not be so appointed or if any of them shall fail to appear
     or act, the Chairman of the meeting may and on the request of any Member
     entitled to vote thereat shall, appoint inspectors.  Each inspector, before
     entering upon the discharge of his duties, shall take and sign an oath
     faithfully to exercise the duties of inspector at such meeting with strict
     impartiality and according to the best of his ability.  The inspectors
     shall determine the number of shares outstanding and the voting power of
     each, the number of shares represented at the meeting, the existence of a
     quorum, the validity and effect of proxies, and shall receive votes,
     ballots or consents, hear and determine all challenges and questions
     arising in connection with the right to vote, count and tabulate all votes,
     ballots or consents, determine the result, and do such acts as are proper
     to conduct the election or vote with fairness to all Members.  On the
     request of the Chairman of the meeting or any Member entitled to vote
     thereat, the inspectors shall make a report in writing of any challenge,
     request or matter determined by them and shall execute a certificate of any
     fact found by them.  No director or candidate for the office of director
     shall act as inspector.  Inspectors need not be Members.
<PAGE>

                                     VOTING
                                     ------

36.  Save where a greater majority is required by the Companies Acts or these
     Bye-Laws any question proposed for consideration at any general meeting
     shall be decided on by a simple majority of votes cast.  No matter or item
     of business shall be put to a vote of a general meeting of Members unless
     that matter or item of business is specifically articulated in the Notice
     and Agenda of the meeting and complies with the provisions of Bye-Laws
     27(2) and 54 hereof.

37.  At any general meeting, a resolution put to the vote of the meeting shall
     be decided on a show of hands unless (before or on the declaration of the
     result of the show of hands or on the withdrawal of any other demand for a
     poll) a poll is demanded by:-

     (a)  the Chairman of the meeting; or
     (b)  at least three Members present in person or represented by proxy; or
     (c)  any Member of Members present in person or represented by proxy and
          holding between them not less than one tenth of the total voting
          rights of all the Members having the right to vote at such meeting; or
     (d)  a Member of Members present in person or represented by proxy holding
          shares conferring the right to vote at such meeting, being shares on
          which an aggregate sum has been paid up equal to not less than one
          tenth of the total sum paid up on all such shares conferring such
          right.

     Unless a poll is so demanded and the demand is not withdrawn, a declaration
     by the Chairman that a resolution has, on a show of hands, been carried or
     carried unanimously or by a particular majority or not carried by a
     particular majority or lost shall be final and conclusive, and an entry to
     that effect in the Minute Book of the Company shall be conclusive evidence
     of the fact without proof of the number of votes recorded for or against
<PAGE>

     such resolution.

38.  If a poll is duly demanded, the result of the poll shall be deemed to be
     the resolution of the meeting at which the poll is demanded.

39.  A poll demanded on the election of a Chairman, or on a question of
     adjournment, shall be taken forthwith.  A poll demanded on any other
     question shall be taken in such manner and either forthwith or at such time
     (being not later than three months after the date of the demand) and place
     as the Chairman shall direct.  It shall not be necessary (unless the
     Chairman otherwise directs) for notice to be given of a poll.

40.  The demand for a poll shall not prevent the continuance of a meeting for
     the transaction of any business other than the question on which the poll
     has been demanded and it may be withdrawn at any time before the close of
     the meeting or the taking of the poll, whichever is the earlier.

41.  On a poll, votes may be cast either personally or by proxy.

42.  A person entitled to more than one vote on a poll need not use all of his
     votes or case all the votes he uses in the same way.

43.  In the case of an equality of votes at a general meeting, whether on a show
     of hands or on a poll, the Chairman of such meeting shall not be entitled
     to a second or casting vote.

44.  In the case of joint holders of a share, the vote of the Senior who tenders
     a vote, whether in person or by proxy, shall be accepted to the exclusion
     of the votes of the other joint holders, and for this purpose seniority
     shall be determined by the order in which the names stand in the Register
     in respect of the joint holding.
<PAGE>

45.  A Member who is a patient for any purpose of any statute or applicable law
     relating to mental health of in respect of whom an order has been made by
     any Court having jurisdiction for the protection or management of the
     affairs of persons incapable of managing their own affairs may vote,
     whether on a show of hands or on a poll, by his receiver, committee,
     curator bonis or other person in the nature of a receiver, committee,
     curator bonis appointed by such Court and such receiver, committee, curator
     bonis or other person may vote on a poll by proxy, and may otherwise act
     and be treated as such Member for the purpose of the general meeting.

46.  No Member shall, unless the Board otherwise determines, be entitled to cote
     at any general meeting unless all calls or other sums presently payable by
     him in respect of the shares in the Company have been paid.

47.  If (i) any objection shall be raised to the qualification of any voter or
     (ii) any votes have been counted which ought not have been counted or which
     might have been rejected or (iii) any votes are not counted which ought to
     have been counted, the objection or error shall not vitiate the decision of
     the meeting or adjourned meeting on any resolution unless the same is
     raised or pointed out at the meeting or, as the case may be, the adjourned
     meeting at which the vote objected to is given or tendered or at which the
     error occurs.  Any objection or error shall be referred to the Chairman of
     the meeting and shall only vitiate the decision of the meeting on any
     resolution if the Chairman decides that the same may have affected the
     decision of the meeting.  The decision of the Chairman on such matters
     shall be final and conclusive.

                     PROXIES AND CORPORATE REPRESENTATIVES
                     -------------------------------------

48.  The instrument appointing a proxy shall be in writing under the hand of the
     appointor or of his attorney authorised by him in writing or, if the
     appointer is a company, either under its seal or under the hand of an
     officer, attorney or other persons authorised to sign the same.
<PAGE>

49.  A Member may designate a person who is not a Member of the Company as his
     proxy to represent such Member and vote on his behalf at any General
     Meeting of the Company or any Meeting of the holders of any class of shares
     in the capital of the Company and the Company may appoint a representative
     as permitted by the Companies Act and such representative need not be a
     Member.

50.  The instrument appointing a proxy together with such other evidence as top
     its die execution as the Board may from time to time require, shall be
     delivered at the Registered Office (or at such place as may be specified in
     the notice convening the meeting or in any notice of adjournment or, in
     either case, in any document sent therewith) at least two business days
     prior to the holding of the meeting or adjourned meeting at which the
     persons named in the instrument proposes to vote or, in the case of a poll
     taken subsequent to the date of the a meeting or adjourned meeting, before
     the time appointed for the taking of the poll and in default the instrument
     of proxy shall not be treated as valid.

51.  Instruments of proxy shall be in any common form or in such other form as
     the Board may approve and the Board may, if it thinks fit, send out with
     the notice of any meeting forms of instruments of proxy for use at that
     meeting.  The instrument of proxy shall be deemed to confer authority to
     demand or join in demanding a poll and to vote on any amendment of a
     resolution put to the meeting for which it is given as the proxy thinks
     fit.  The instrument of proxy shall unless the contrary is stated therein
     be valid as well for any adjournment of the meeting as for the meeting to
     which it relates.

52.  (1)  A vote given in accordance with the terms of an instrument of proxy
          shall be valid notwithstanding the previous death or insanity of the
          principal, or revocation of the instrument of proxy or of the
          authority under which it was executed, provided that no intimation in
          writing of such death, insanity or revocation shall have been received
          by the Company at the Registered Office (or such other place as may be
<PAGE>

          specified for the delivery of instruments of proxy in the notice
          convening the meeting or other documents sent therewith) one hour at
          least before the commencement of the meeting or adjourned meeting, or
          the taking of the poll, at which the instrument of proxy is used.

     (2)  A proxyholder shall only vote in accordance with the direction made in
          the instrument of proxy duly executed by the Member granting such
          proxy and in the absence of such direction the proxyholder shall be
          bound to vote the proxy in favour of the proposals recommended by the
          Board of the Company.

53.  Subject to the Companies Acts, the Board may at its discretion waive any of
     the provisions of these Bye-Laws related to proxies or authorisations and,
     in particular, may accept such verbal or other assurances as it thinks fit
     as to the right of any person to attend and vote on behalf of any Member at
     general meetings.

                      APPOINTMENT AND REMOVAL OF DIRECTORS
                      ------------------------------------

54.  (1)  The number of Directors which shall constitute the whole Board of
          Directors of the Company shall not be more than fifteen (15).  The
          Board is divided into three classes, Class I, Class II and Class III.
          The number of Directors in each class shall be the whole number
          contained in the quotient arrived at by dividing the authorised number
          of Directors by three and if a fraction is also contained in such
          quotient, then if such fraction is one-third (1/3) the extra Director
          shall be a member of Class III and if the fraction is two-thirds (2/3)
          one of the Directors shall be member of Class III and the other shall
          be a member of Class II. Each Director shall serve for a term ending
          on the third annual meeting following the annual meeting at which such
          Director was elected; provided however, that the Directors first
          elected to Class I shall serve for a term ending on the annual meeting
          next ensuing, the Directors first elected to Class II shall serve for
          a term ending on the second annual meeting following the meeting at
          which such Directors were first elected, and the Directors first
          elected to Class III
<PAGE>

          shall serve a full term as hereinbefore provided. The foregoing
          notwithstanding, each Director shall serve until his successor shall
          have been duly elected and qualified, unless he shall resign, become
          disqualified, disabled or shall otherwise be removed.

          For the purpose of the preceding paragraph, reference to the first
          election of Directors is to the election at the 1991 Annual General
          Meeting.  At each annual election held thereafter, the Directors
          chosen to succeed those whose terms then expire shall be identified as
          being of the same class as the Directors they succeed.  If for any
          reason the number of Directors in the various classes shall not
          conform with the formula set forth in the preceding paragraph, the
          Board may redesignate any Director to a different class in order that
          the balance of Directors in such classes shall conform thereto.

     (2)  A Director need not be a Member.

     (3)  Only persons who are nominated in accordance with the following
          procedures shall be eligible for election as Directors.  Nominations
          of persons for election to the Board of the Company may be made at a
          meeting of Members by or at the discretion of the Board, by any
          nominating committee or person appointed by the Board or by any Member
          of the Company entitled to vote for the election of Director at the
          meeting who complies with the notice procedures set forth in this Bye-
          Law.  Such nominations, other than those made by or at the direction
          of the Board, shall be made pursuant to timely notice in writing to
          the Secretary of the Company. To be timely, a Member's notice shall be
          delivered to or mailed and received at the registered office of the
          Company not less than 50 days nor more than 75 days prior to the
          meeting; provided however that in the event that less than 65 days'
          notice or prior public disclosure of the date of the meeting is given
          or made to Members, notice by the Member to be timely must be received
          not later than the close of business on the 15th day following the day
          on which such notice of the date of the meeting was mailed or such
          public disclosure was made.  Such Member's notice to the Secretary
<PAGE>

          shall set forth (a) as to each person whom the Member proposes to
          nominate for election or re-election as a Director, (i) the name, age,
          business address and residence address of the persons, (ii) the
          principal occupation or employment of the person, (iii) the class and
          number of shares of Common Shares of the Company which are
          beneficially owned by the person and (iv) any other information
          relating to the person that is required to be disclosed in
          solicitations for proxies for election of Directors pursuant to
          Schedule 14A under the Securities Exchange Act of 1934, as amended;
          and (b) as to the Member giving the notice (i) the name and record
          address of the Member and (ii) the class and number of shares of
          capital stock of the Company which are beneficially owned by the
          Member.  The Company may require any proposed nominee to furnish such
          other information as may reasonably be required by the Company to
          determine the eligibility of such proposed nominee to serve as a
          Director of the Company.  No persons shall be eligible for election as
          a Director of the Company unless nominated in accordance with the
          procedures set forth herein.

          The Chairman of the meeting shall, if the facts warrant, determine and
          declare to the meeting that a nomination was not made in accordance
          with the foregoing procedure, and if he should so determine, he shall
          so declare to the meeting and the defective nomination shall be
          disregarded.

55.  Without prejudice to the power of the Company in general meeting in
     pursuance of any of the provisions of these Bye-Laws to appoint any person
     to be a Director, the Board, so long as a quorum of Directors remains in
     office, shall have power at any time and from time to time to appoint any
     individual to be a Director so as to fill a casual vacancy.  Any individual
     appointed as a Director to fill a casual vacancy shall service for the
     remainder of the unexpired term of the individual that he replaced.

56.  The Company may in Special General Meeting call for that purpose remove a
     Director for cause provided notice of any such meeting shall be served upon
     the Director concerned not less than 14 days before the meeting and he
     shall be entitled to be heard at that meeting.  Any
<PAGE>

     resolution to remove a Director of the Company pursuant to the terms of
     this Bye-Law shall require the affirmative vote of the holders of eighty
     percent (80%) of the outstanding shares of the Company then entitled to
     vote generally for the election of Directors. Any vacancy created by the
     removal of a Director at a Special General Meeting may be filled at the
     Meeting by the election of another Director in his place or, in the absence
     of any such election, by the Board.

                 RESIGNATION AND DISQUALIFICATION OF DIRECTORS
                 ---------------------------------------------

57.  The office of a Director shall be vacated upon the happening of any of the
     following events:

     (a)  if he resigns his office by notice in writing delivered to the
          Registered Office or tendered at a meeting of the Board;
     (b)  if he becomes of unsound mind or a patient for any purpose of any
          statute or applicable law relating to mental health and the Board
          resolves that his office is vacated;
     (c)  if he becomes bankrupt or compounds with his creditors;
     (d)  if he is prohibited by law from being a Director;
     (e)  if he is removed from office by a resolution in writing in accordance
          with the procedure set out in Bye-Law 56.

            DIRECTORS' FEES AND ADDITIONAL REMUNERATION AND EXPENSES
            --------------------------------------------------------

58.  The amount, if any, of Directors' fees shall from time to time be
     determined by the Compensation/Stock Option Committee of the Board.  In
     addition, each Director shall be paid his reasonable traveling, hotel and
     incidental expenses in attending and returning from meetings of the Board
     or committees constituted pursuant to these Bye-Laws or general meeting and
     shall be paid all expenses properly and reasonably incurred by him in the
     conduct of the Company's business or in the discharge of his duties as
     Director.  Any question as to the reasonableness of expenses as provided
     herein shall be a matter to be
<PAGE>

     determined by the Compensation/Stock Committee of the Board. Any Director
     who, by request, goes or resides abroad for any purposes of the Company or
     who performs services which in the opinion of the Board go beyond the
     ordinary duties of a Director may be paid such extra remuneration (whether
     by way of salary, commission, participation in profits or otherwise) as the
     Board may determine, and such extra remuneration shall be in addition to
     any remuneration provided for by or pursuant to any other Bye-Law.

                              DIRECTORS' INTERESTS
                              --------------------

59.  (a)  A Director may hold any other office or place of profit with the
          Company (except that of Auditor) in conjunction with this office of
          Director for such period and upon such terms as the Board may
          determine, and may be paid such extra remuneration therefor (whether
          by way of salary, commission, participation in profits or otherwise)
          as the Board may determine, and such extra remuneration shall be in
          addition to any remuneration provided for by or pursuant to any other
          Bye-Laws.

     (b)  A Director may act by himself or his firm in a professional capacity
          for the Company (otherwise than as auditor) and he or his firm shall
          be entitled to remuneration for professional services as if he were
          not a Director.

     (c)  Subject to the provisions of the Companies Acts, a Director may
          notwithstanding his office be a party to, or otherwise interested in,
          any transaction or arrangement with the Company or in which the
          Company is otherwise interested; and be a Director or other officer
          of, or employed by, or a part to any transaction or arrangement with,
          or otherwise interested in, any body corporate promoted by the Company
          or in which the Company is interested.  The Board may also cause the
          voting power conferred by the shares in any other company held or
          owned by the Company to be exercised in such manner in all respect as
          it thinks fit, including the exercise thereof in favour of any
          resolution appointing the Directors or any of them to be directors or
          officers of such other company, or voting or providing for the payment
          of remuneration to the
<PAGE>

          directors or officers of such other company.

     (d)  So long as, where it is necessary, he declares the nature of his
          interest at the first opportunity at a meeting of the Board or by
          writing to the Directors as required by the Companies Acts, a Director
          shall not by reason of his office be accountable to the Company for
          any benefit which he derives from any office or employment to which
          these Bye-Laws allow him to be appointed or from any transaction or
          arrangement in which these Bye-Laws allow him to be interested, and no
          such transaction or arrangement shall be liable to be avoided on the
          ground on any interest or benefit.

     (e)  Subject to the Companies Acts and any further disclosures required
          thereby, a general notice to the Directors by a Director or officer
          declaring that he is a director or officer or has an interest in a
          person and is to be regarded as interested in any transaction or
          arrangement made with that person, shall be a sufficient declaration
          of interest in relation to any transaction or arrangement so made.

                         POWERS AND DUTIES OF THE BOARD
                         ------------------------------

60.  Subject to the provisions of the Companies Acts and these Bye-Laws and to
     any directions given by the Company in general meeting, the Board shall
     manage all aspects of the business of the Company and in connection with
     the exercise of its powers shall have regard to the best interests of the
     Company and its Members and in determining what is in the best interests of
     the Company and its Members, the Board shall have regard to all relevant
     factors including without limitation the possible effects that the exercise
     of any of its powers may have on the business of the Company and its
     subsidiaries and on the employees, customers, suppliers and creditors of
     the Company and its subsidiaries.

     No alteration of these Bye-Laws and no such direction shall invalidate any
     prior act of the Board which would have been valid if that alteration had
     not been made or that direction had not been given.  All actions shall be
     taken by the Board (or its committees) conducting their
<PAGE>

     duties as a corporate body, and no individual from time to time serving as
     a member of the Board shall have the authority in his capacity as a Board
     member to negotiate or conclude any contracts in the name of the Company or
     otherwise to bind the Company, except as set forth in a specific
     authorisation duly adopted by the Board. The powers given by this Bye-Law
     shall not be limited by any special power given to the Board by these Bye-
     Laws and a meeting of the Board at which a quorum is present shall be
     competent to exercise all the powers, authorities and discretions for the
     time being vested in or exercisable by the Board.

                                    OFFICERS
                                    --------

61.  The officers of the Company shall include a Chairman, a President and one
     or more Senior Vice Presidents who may not need not be Directors and shall
     be elected by the Board as soon as possible after each annual general
     meeting.  The authority of the Chairman shall be that of a Chief Executive
     Officer.

     The authority of any Officer of the Company including the President and any
     Senior Vice Presidents so long as such officers, in the opinion of the
     Board, shall be resident in the United States shall be limited to
     maintaining an oversight and review of and providing recommendations and
     information to the Board, but not to any third party, regarding the affairs
     of the Company pertaining to its subsidiaries incorporated in the United
     States and otherwise to enable the Company to fulfil its role as the holder
     of shares of such subsidiaries. The President and any Senior Vice
     Presidents shall have no authority (i) to negotiate or conclude contracts
     in the name of the Company (or any of its subsidiaries not incorporated in
     the United States) or otherwise bind the Company (or any of its
     subsidiaries not incorporated in the United States) within the United
     States; or (ii) to conduct or manage any activities of the Company (or any
     of its subsidiaries not incorporated in the United States) within or
     outside of the United States, or (iii) to act in any way which might result
     in the Company (or any of its subsidiaries not incorporated in the United
     States) being considered to be engaged in a trade of business in the United
     States within the meaning of the Internal Revenue Code of 1986 or any
     subsequent United States Tax Legislation.
<PAGE>

     Any purported action or contract done or made by the President or any
     Senior Vice Presidents or any other duly appointed officer of the Company
     in violation of the provisions hereof shall be null and void ab initio and
     the Company or any of its subsidiaries shall in no way be bound or affected
     by any such action or contract done or made on violation of the provisions
     hereof.

     Any person elected or appointed pursuant to this Bye-Law Shall hold office
     for such period and upon such terms as the Board may determine and the
     Board may revoke or terminate any such election or appointment.  Any such
     revocation or termination shall be without prejudice to any claim for
     damages that such officer may have against the Company or the Company may
     have against such officer for any breach of any contract of service between
     him and the Company which may be involved in such revocation or
     termination.  Save as provided in the Companies Acts or these Bye-Laws, and
     subject to the limitations on the authority of the President and any Senior
     Vice Presidents contained in these Bye-Laws, the powers and duties of the
     officers of the Company shall be such (if any) as are determined from time
     to time by the Board.

62.  In addition to the provisions of Bye-Law 61 hereof, the Board may appoint
     any person whether or not he is a Director to hold such other office
     (including any additional Vice Presidencies) as the Board may from time to
     time determine.  Any person elected or appointed pursuant to this Bye-Law
     shall hold office for such period and upon such terms and the Board may
     determine and the Board may revoke or terminate any such election or
     appointment.  Any such revocation or termination shall be without prejudice
     to any claim for damages that such officer may have against the Company or
     the Company may have against such officer for any breach of contract of
     service between him and the Company which may be involved in such
     revocation or termination.  Save as provided in the Companies Acts or these
     Bye-Laws, the powers and duties of the officers of the Company shall be
     such (if any) as are determined from time to time by the Board.
<PAGE>

63.  The Board may exercise all the powers of the Company to borrow money and to
     mortgage or charge all or any part of the undertaking, property and assets
     (present and future) and uncalled capital of the Company and to issue
     debentures and other securities, whether outright or as collateral security
     for any debt, liability or obligation of the Company or of any other
     persons.

64.  All cheques, promissory notes, drafts, bills or exchange or other
     instruments, whether negotiable or transferrrable or not, and all receipts
     for money paid to the Company shall be signed, drawn, accepted, endorsed or
     otherwise executed, as the case may be, in such manner as the Board shall
     from time to time by resolution determine.

65.  The Board on behalf of the Company may provide benefits, whether by the
     payment of gratuities or pensions or otherwise, for any persons including
     any Director of former Director who has held any executive officer or
     employment with the Company or with any body corporate which is or have
     been a subsidiary or affiliate of the Company or a predecessor in the
     business of the Company or of any such subsidiary or affiliate, and to any
     member of his family or any person who is or was dependent on him, and may
     contribute to any fund and pay premiums for the purchase or provision of
     any such gratuity, pension or other benefit, for the the insurance of any
     such person.

66.  Subject to Bye-Law 61 hereof, the Board may from time to time appoint one
     or more of its body to hold any employment or executive office with the
     Company for such period and upon such terms as the Board may determine may
     revoke or terminate any such appointments.  Any such revocation or
     termination as aforesaid shall be without prejudice to any claim for
     damages that such Director may have against the Company or the Company may
     have against such Director for any breach of any contract of service
     between him and the Company which may be involved in such revocation or
     termination.  Any person so appointed shall receive remuneration (if any)
     (whether by way of salary, commission,
<PAGE>

     participation in profits or otherwise) as the Board may determine, and
     either in addition to or in lieu of his remuneration as a Director.

                    COMPENSATION OF OFFICERS OF THE COMPANY
                    ---------------------------------------

67.  The compensation payable by the Company to its Executive Officers as
     detailed herein and such other officers and employees of the Company as the
     Board may from time to time approve shall be determined by the
     Compensation/Stock Option Committee of the Board. The said
     Compensation/Stock Option Committee shall have the absolute power to set
     remuneration of officers and employees of the Comapny in terms of salary,
     commission, participation in profits or otherwise of the Company as the
     said Committee in its absolute discretion shall determine.  For the
     avoidance of doubt, the issue of compensation payable by the Company to its
     Executive Officers and employees shall be as provided herein, that is, it
     shall be a matter for the Compensation/Stock Option Committee of the Board
     only and shall not under any circumstances be a matter for action by
     Members in general meeting.

                        DELEGATION OF THE BOARD'S POWERS
                        --------------------------------

68.  The Board may by power of attorney appoint any company, firm or person or
     any fluctuating body of persons, whether nominated directly or indirectly
     by the Board, to be the attorney or attorneys of the Company for such
     purposes and with such powers, authorities and discretions (not exceeding
     those vested in or exerciseable by the Board under these Bye-Laws) and for
     such period and subject to such conditions as it may think fit, and any
     such power of attorney may contain such provisions for the protection and
     convenience of persons dealing with any such attorney and of such attorney
     as the Board may think fit, and may also authorise any such attorney to
     sub-delegate all or any of the powers, authorities and discretions vested
     in him.

69.  The Board may entrust to and confer upon any Director or officer any of the
     powers exerciseable by it upon such terms and conditions with such
     restrictions as it thinks fit, and
<PAGE>

     either collaterally with, or to the exclusion of, its own powers, and may
     from time to time revoke or vary all or any of such powers but no person
     dealing in good faith and without notice of such revocation or variation
     shall be affected thereby.

70.  The Board may delegate any of its powers, authorities and discretions to
     committees, consisting of such person or persons (whether a member or
     members of its body or not) as it thinks fit.  Any committee so formed
     shall, in the exercise of the powers, authorities and discretions so
     delegated, conform to any regualtions which may be imposed upon it by the
     Board.

71.  Subject to Bye-Law 61 hereof and without prejudice to the generality of
     Bye-Law 70, the Board shall, immediately following the Annual General
     Meeting each year, establish the following Committees of the Board:-

     (1)  The Audit Committee
     (2)  The Executive Committee
     (3)  The Investment Committee
     (4)  The Compensation/Stock Option Committee
     (5)  The Reinsurance Security Committee, and
     (6)  The Nominating Committee

     The foregoing committees shall consist of such person or persons (whether a
     member or members of its body or not) as the Board thinks fit.  The
     Committee shall, in the exercise of the powers, authorities and discretions
     delegated to them, conform to any regulations which may be imposed upon
     them from time to time by the Board.

                            PROCEEDINGS OF THE BOARD
                            ------------------------

72.  The Board may meet for the despatch of business, adjourn or otherwise
     regulate its meetings as it thinks fit, provided that no business shall be
     transacted at a meeting of the Board unless
<PAGE>

     not less than 7 clear days' notice in writing of the meeting shall be given
     to each director giving reasonable details of the business to be so
     transacted, and provided further that any director may by notice in writing
     to the Company agree that no notice need, or any shorter notice specified
     in the notice may, be given to him either generally or in respect of a
     particular meeting. Questions arising at any meeting shall be determined by
     a majority of votes. In the case of an equality of votes, the motion shall
     be deemed to have been lost. Any four Directors of the Company or the
     Chairman acting alone may summon a Board Meeting. A Director may, and the
     Secretary on the requistion of the Director shall at any time summon a
     Board meeting. For the purpose of this Bye-Law the expression 'clear days'
     means that the day on which the notice is despatched and the day of the
     meeting shall not be counted in calculating notice period. Except with the
     unanimous approval of the Directors, all Board Meetings shall be held in
     Bermuda.

                           TELEPHONIC BOARD MEETINGS
                           -------------------------

73.  Directors may participate in any meeting of the Board by means of
     conference telephone or other communications equipment through which all
     persons participating in the meeting can communicate with each other and
     such participation shall constitute presence at a meeting as if those
     participating were present in person.  A telephonic board meeting shall
     only be initiated from Bermuda where there is a quorum present in Bermuda
     when the telephone link-up is initiated and Bermuda shall thus be deemed to
     be the situs of the Board Meeting.

74.  Notice of a Board meeting shall be deemed to be duly given to a Director if
     it is given to him personally or sent to him by post, cable, telex,
     telecopier or other mode or representing or reproducing words in a legible
     and non-transitory form at his last known address or any other address
     given by him to the Company for this purpose.  A Director may waive notice
     of any meeting either prospectively or retrospectively.

75.  (a)  The quorum necessary for the transaction of the business of the Board
          shall be two Directors. Any Director who ceases to be a Director at a
          board meeting may continue
<PAGE>

          to be present and to act as a Director and be counted in the quorum
          until the termination of the Board meeting.

     (b)  A Director who to his knowledge is in any way, whether directly or
          indirectly, interested in a contract or proposed contract, transaction
          or arrangement with the Company has complied with the provisions of
          the Companies Acts and these Bye-Laws with regard to disclosure of his
          interests shall be entitled to vote in respect of any contract,
          transaction or arrangement in which he is so interested and if he
          shall do so his vote shall be counted, and he shall be taken into
          account in ascertaining whether a quorum is present.

76.  So long as a quorum of Directors remains in office, the continuing
     Directors may act notwithstanding any vacancy in the Board but, if no
     quorum of Directors remains, the continuing Directors or a sole continuing
     Director may act only for the purpose of calling a general meeting.

77.  The Board shall elect the Chairman of the Board from amongst its members.
     If the Chairman of the Board is absent, the President shall be Chairman.
     If at any meeting neither the Chairman of the Board nor the President is
     present within five minutes after the time appointed for the holding the
     same, the Directors present may choose one of their number to be Chairman
     of the meeting.

78.  The meetings and proceedings of any committee consisting of two or more
     members shall be governed by the provisions contained in these Bye-Laws for
     regulating the meetings and proceedings of the Board so far as the same are
     applicable and are not superseded by any regulations imposed by the Board.

79.  A resolution in writing signed by all the Directors for the time being
     entitled to receive notice of a meeting of the Board or by all the members
     of a committee for the time being shall be valid and effectual as a
     resolution passed at a meeting of the Board or, as the case may be,
<PAGE>

     of such committee duly called and constituted. Such resolution may be
     contained in one document or in several documents in the like form each
     signed by one or more of the Directors or members of the committee
     concerned.

80.  All acts done by the Board or by any committee or by any person acting as a
     Director or member of a committee or any person duly authorised by the
     Board or any committee, shall, notwithstanding that it is afterwards
     discovered that there was some defect in the appointment of any member of
     the Board or such committee or person acting as aforesaid or that they or
     any of them were disqualified or had vacated their office, be as valid as
     if every such person had been duly appointed and was qualified and had
     continued to be a Director, member of such committee or persons so
     authorised.

                                    MINUTES
                                    -------
81.  (1)  The Directors shall cause minutes to be made and books kept for the
          purpose of recording -
          (a)  all appointments of officers made by the Directors;
          (b)  the names of the Directors and other persons (if any) present at
               each meeting of Directors and of any committee;
          (c)  of all proceedings at meetings of the Company, of the holders of
               any class of shares in the Company, and of committees;
          (d)  of all proceedings of managers (if any).
     (2)  Save as expressly directed by the Chairman, the Secretary shall be
          under no obligation to circulate to the Members copies of the minutes
          of any general meeting. Copies of the same shall be available for
          inspection at the registered office of the Company without charge
          during normal business hours and the Secretary shall on request supply
          photocopies of the same to any Member.

                                   SECRETARY
                                   ---------

82.  The Secretary shall be appointed by the Board at such remuneration (if any)
     and upon such
<PAGE>

     terms as it may think fit and any secretary so appointed may be removed by
     the Board. The duties of the Secretary shall be those prescribed by the
     Companies Acts together with such other duties as shall from time to time
     be prescribed by the Board.

83.  A provision of the Companies Acts or these Bye-Laws requiring or
     authorising a thing to be done by or to a Director and the Secretary shall
     not be satisfied by its being done or to the same person acting both as
     Director and as, or in the place of, the Secretary.

                                    THE SEAL
                                    --------

84.  (a)  The Seal shall consist of a circular metal device with the name of the
          Company around the outer margin thereof and the country and year of
          incorporation across the centre thereof.
     (b)  The Board shall provide for the custody of the Seal, which Seal shall
          only be used by authority of the Board or of a committee authorised by
          the Board in that behalf. Subject to these Bye-Laws, any instrument to
          which the seal is affixed shall be signed by a Director and by the
          Secretary or by a second Director; provided that the Secretary or a
          Director may affix the Seal over his signature only to authenticate
          copies of these Bye-Laws, the minutes of any meeting or any other
          documents requiring authentication.
     (c)  The Company may have one duplicate Seal which shall be known as the
          "Overseas Seal" and which shall be used for the execution of documents
          and instruments which require to be executed outside Bermuda.  The
          provisions of paragraph (a) of this Bye-Law applicable to the Seal
          shall mutatis mutandis apply to the Overseas Seal.
     (c)  The Overseas Seal of the Company may be used outside Bermuda for the
          bona fide purposes of the Company and wherever and whenever so used
          shall be duly noted and recorded at a meeting of the Board and copies
          of all instruments sealed by the Overseas Seal shall be kept at, or
          remitted to, the registered office of the Company.
<PAGE>

                          DIVIDENDS AND OTHER PAYMENTS
                          ----------------------------

85.  Subject to the Companies Acts and these Bye-Laws, the Board may from time
     to time declare cash dividends to be paid to the Members according to their
     rights and interests in the profits including such interim dividends as
     appear to the Board to be justified by the position of the Company.  The
     Board may also pay any fixed cash dividend which is payable on any shares
     of the Company half yearly or on such other dates, whenever the position of
     the Company, in the opinion of the Board, justifies such payment.   For the
     purpose of this Bye-Law, contributed surplus shall be deemed not be a
     profit of the Company and shall not be taken account of in calculating the
     amount of the profits available for distribution to the Members and shall
     not be available for distribution other than in the manner provided for in
     Bye-Law 91.

86.  Except insofar as the rights attaching to, or the terms of issue of, any
     share otherwise provide:-
     (a)  all dividends may be declared and paid according to the amounts paid
          up on the shares in respect of which the dividend is paid, and an
          amount paid up on a share in advance of calls may be treated for the
          purpose of this Bye-Law as paid-up on the share;
     (b)  dividends may be apportioned and paid pro rata according to the
          amounts paid-up on the shares during any portion or portions of the
          period in respect of which the dividend is paid.

87.  The Board may deduct from any dividend or other moneys payable to a Member
     by the Company on or in respect of any shares all sums of money (if any)
     presently payable by him to the Company on account of calls or otherwise in
     respect of shares of the Company.
<PAGE>

88.  No dividend or other moneys payable by the Company on or in respect of any
     share shall bear interest against the Company.

89.  Any dividend, interest or other sum payable in cash to the holder of shares
     may be paid by cheque or warrant sent through the post addressed to the
     holder at his address in the Register or, in the case of joint holders,
     addressed to the holder whose name stands first in the Register in respect
     of the shares at his registered address as appears in the register or
     addressed to such person at such address as the holder or joint holders may
     in writing direct. Every such cheque or warrant shall, unless the holder or
     joint holders otherwise direct, be made payable to the order of the holder
     or, in the case of joint holders, to the order of the holder whose name
     stands first in the Register in respect of such shares, and shall be sent
     at his or their risk and payment of the cheque or warrant by the bank on
     which it is drawn shall constitute a good discharge to the Company.  Any
     one of two or more joint holders may give effectual receipts for any
     dividends or other moneys payable or property distributable in respect of
     the shares held by such joint holders.

90.  Any dividend unclaimed for a period of six years from the date of
     declaration of such dividend shall be forfeited and shall revert to the
     Company and the payment by the Board of any unclaimed dividend, interest or
     other sum payable on or in respect of the share into a separate account
     shall not constitute the Company a trustee in respect thereof.

91.  The Board may (a) declare a distribution to any Member out of contributed
     surplus and (b) may direct payment or satisfaction of such distribution or
     any dividend wholly or in part by the distribution of specific assets, and
     in particular of paid-up shares or debentures of any other company, and
     where any difficulty arises in regard to such distribution or dividend and
     Board may settle it as it thinks expedient, and in particular, may
     authorise any person to sell and transfer any fractions or may ignore
     fractions altogether, and may fix the value for distribution or dividend
     purposes of any such specific assets and may determine that cash
<PAGE>

     payments shall be made to any Members upon the footing of the values so
     fixed in order to secure equality of distribution and may vest any such
     specific asset in trustees as may seem expedient to the Board.

                                    RESERVES
                                    --------

92.  The Board may, before recommending or declaring any dividend, set aside out
     of the profits of the Company such sums as it thinks proper as reserves
     which shall, at the discretion of the Board, be applicable for any purpose
     to which the profits of the Company may be properly applied and pending
     such application may, also at such discretion, either be employed in the
     business of the Company or be invested in such investments as the Board may
     from time to time think fit.  The Board may also without placing the same
     to reserve carry forward any profits which it may think it prudent not to
     distribute.

                           CAPITALIZATION OF PROFITS
                           -------------------------

93.  The Company may, upon the recommendation of the Board, at any time and from
     time to time resolve in general meeting to the effect that it is desirable
     to capitalize all or part of any amount for the time being standing to the
     credit of any reserve or fund which is available for distribution or to the
     credit of any share premium account or any capital redemption reserve fund
     and accordingly that such amount be set free for distribution amongst the
     Members or any class of Members who would be entitled thereto if
     distributed by way of dividend and in the same proportions, on the footing
     that the same be not paid in cash but be applied either in or towards
     paying up amounts for the time being unpaid on any shares in the Company
     held by such Members respectively or in payment up in full of unissued
     shares, debentures or other obligations of the Company, to be allotted and
     distributed credited as fully paid amongst such Members, or partly in one
     way and partly in the other, and the Board shall give effect to such
     resolution, provided that for the purpose of this Bye-Law, a share premium
     account and a capital redemption reserve fund may be applied only in paying
     up of unissued shares to be issued to such Members credited as fully paid.
<PAGE>

94.  Where any difficulty arises in regard to any distribution under the last
     preceding Bye-Law the Board may settle the same as it thinks expedient and,
     in particular, may authorise any person to sell and transfer any fractions
     or may resolve that the distribution should be as nearly as may be
     practicable in the correct proportion but not exactly so or may ignore
     fractions altogether, and may determine that cash payments should be made
     to any Members in order to adjust the rights of all parties, as may seem
     expedient to the Board.  The Board may appoint any person to sign on behalf
     of the persons entitled to participate in the distribution any contract
     necessary or desirable for giving effect thereto and such appointment shall
     be effective and binding upon the Members.

                                  RECORD DATES
                                  ------------

95.  The Board may fix any date as the record date for the payment of any
     dividend or distribution or for the allotment or issue of shares in the
     Company.  The Board shall also fix the record date for General Meetings of
     the Company identifying the persons entitled to receive notices of and vote
     at the General Meeting.   Such record date for any General Meeting shall be
     a period fixed by the Board but shall not be more than 90 days or less than
     7 days prior to the General Meeting.

                               ACCOUNTING RECORDS
                               ------------------

96.  The Board shall cause to be kept accounting records sufficient to give a
     true and fair view of the state of the Company's affairs and to show and
     explain its transactions, in accordance with the Companies Acts.

97.  The records of account shall be kept at the Registered Office or at such
     other place or places as the Board thinks fit, and shall at all times be
     open to inspection by the Directors, and provided that if the records of
     account are kept at some place outside Bermuda, there shall
<PAGE>

     be kept at an office of the Company in Bermuda such records as will enable
     the Directors to ascertain with reasonable accuracy the financial position
     of the Company at the end of each three month period. No Member (other than
     an officer of the Company) shall have any right to inspect any accounting
     record or book or document of the Company except as conferred by law or
     authorised by the Board or the Company in general meeting.

98.  A copy of every balance sheet and statement of income and expenditure,
     including every document required by law to be annexed thereto, which is to
     be laid before the Company in general meeting, together with a copy of the
     auditors' report, shall be sent to each person entitled thereto in
     accordance with the requirements of the Companies Acts.

                                     AUDIT
                                     -----

99.  Save and to the extent that an audit is waived in the manner permitted by
     the Companies Acts, auditors shall be appointed and their duties regulated
     in accordance with the Companies Acts, any other applicable law and such
     requirements not inconsistent with the Companies Acts as the Board may from
     time to time determine.

                     SERVICE OF NOTICES AND OTHER DOCUMENTS
                     --------------------------------------

100. Any notice of a general meeting of the Company shall be deemed to be duly
     given to a Member if it is sent to him by cable, telex, telecopier or other
     mode of representing or reproducing words in a legible and non-transitory
     form at his address as appearing in the Register or any other address given
     by him to the Company for this purpose.  Any such notice shall be deemed to
     have been served twenty-four hours after its despatch.

101. Any notice or other document delivered, sent or given to a Member in any
     manner permitted by these Bye-Laws shall, notwithstanding that such Member
     is then dead or bankrupt or than any other event has occurred, and whether
     or not the Company has notice of the death or bankruptcy or other event, be
     deemed to have been duly served or delivered in respect of any
<PAGE>

     share registered in the name of such Member as sole or joint holder unless
     his name shall, at the time of the service or delivery of the notice or
     document, have been removed from the Register as the holder of the share,
     and such service or delivery shall for all purposes be deemed as sufficient
     service or delivery of such notice or document on all persons interested
     (whether jointly with or as claiming through or under him) in the share.

                                   WINDING UP
                                   ----------

102. Subject to these Bye-Laws, if the Company shall be wound up, the liquidator
     may, with the sanction of a resolution of the Company and any other
     sanction required by the Companies Acts, divide amongst the Members in
     specie or kind the whole or any part of the assets of the Company (whether
     they shall consist of property of the same kind or not) and may for such
     purposes set such values as he deems fair upon any property to be divided
     as aforesaid and may determine how such division shall be carried out as
     between the Members or different classes of Members.  The liquidator may,
     with the like sanction, vest the whole or any part of such assets in
     trustees upon such trust for the benefit of the contributories as the
     liquidator, with the like sanction, shall think fit, but so that no Member
     shall be compelled to accept any shares or other assets upon which there is
     any liability.

                                   INDEMNITY
                                   ---------

103. Subject to the proviso below, every Director, officer of the Company and
     member of a committee constituted under Bye-Laws 70 and 71 shall be
     indemnified out of the funds of the Company against civil liabilities loss
     damage or expense (including but not limited to liabilities under contract,
     tort and statute or any applicable foreign law or regulation and all
     reasonable legal and other costs and expenses properly payable) incurred or
     suffered by him as such Director, officer or committee member and the
     indemnity contained in this Bye-law shall extend to any person acting as a
     Director, officer or committee member in the reasonable belief that he has
     been so appointed or elected notwithstanding any defect in such appointment
     or election provided always that the indemnity contained in this Bye-law
     shall
<PAGE>

     not extend to any matter which would render it void pursuant to the
     Companies Acts.

104. To the extent that any Director, officer or member of a committee duly
     constituted under these Bye-Laws is entitled to claim an indemnity pursuant
     to these Bye-Laws in respect of amounts paid or discharged by him, the
     relative indemnity shall take effect as an obligation of the Company to
     reimburse the person making such payment or effecting such discharge.

105. No Director, Secretary or other duly appointed Officer of the Company shall
     be personally liable to the Company or its Members for monetary damages in
     respect of the exercise or non-exercise of any power or duty vested in such
     Director, Secretary or Officer, provided however, the foregoing shall not
     extend to any matter which would be rendered void by the operation of
     Section 98 of the Companies Act.

106  Expenses incurred in defending a civil or criminal action, suit or
     proceeding shall be paid by the Company in advance of the final disposition
     of such action, suit or proceeding as authorised by the Board in the
     specific case upon receipt of an undertaking by or on behalf of the
     Director, Secretary, officer, liquidator or trustee to repay such amount
     unless it shall ultimately be determined that he is entitled to be
     indemnified by the Company as authorised in these Bye-Laws or otherwise
     pursuant to the laws of Bermuda.

                             ALTERATION TO BYE-LAWS
                             ----------------------

107. Any amendment to these Bye-Laws shall be decided on by a simple majority of
     votes cast at any General Meeting of the Company; provided however, that
     any proposed amendment to Bye-Laws 2, 3, 5, 24, 26, 27, 56, and 107 shall
     be decided on by the affirmative vote of 75% of the outstanding voting
     shares in the Company duly cast at a general meeting of the Company called
     for the purpose.
<PAGE>

                               REGISTERED OFFICE
                               -----------------

108. The Registered office shall be at such place in Bermuda as the Board shall
     from time to time appoint.

                                 INTERPRETATION
                                 --------------

109. In these Bye-Laws unless the context otherwise requires -

     "Bermuda" means the Islands of Bermuda;

     "Board" means the Board of Directors of the Company or the Directors
     present at a meeting of Directors at which there is a quorum;

     "Company" means Mutual Risk Management Ltd. incorporated in Bermuda on the
     5th day of September, 1977;

     "the Companies Acts" means every Bermuda statute from time to time in force
     concerning companies insofar as the same applies to the Company;

     "Member" means any person who agrees to become a member of the Company and
     whose name is entered in its register.  The term "member" and "shareholder"
     are hereby deemed synonymous;

     "paid up" means paid up or credited as paid up;

     "Register" means the Register of Members of the Company;
<PAGE>

     "Seal" means the common seal of the Company;

     "Secretary" includes a temporary or assistant Secretary and any person
     appointed by the Board to perform any of the duties of the Secretary;

     "these Bye-Laws" means these Bye-Laws in their present form or as from time
     to time amended;

     for the purposes of these Bye-Laws a corporation shall be deemed to be
     present in person if its representative duly authorised pursuant to the
     Companies Acts is present;

     words importing the singular number only include the plural number and vice
     versa;

     words importing the masculine gender only include the feminine and neuter
     genders respectively;

     words importing persons include companies or associations or bodies of
     persons, whether corporate or un-incorporate;

     reference to writing shall include typewriting, printing, lithography,
     photography and other modes of representing or reproducing words in a
     legible and non-transitory form;

     any words or expressions defined in the Companies Acts in force at the date
     when these Bye-Laws any part thereof are adopted shall bear the same
     meaning in these Bye-Laws or such part (as the case may be).



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