K:\GIG\98PERM\AMRECONT.DOC
             Property Facultative Binding Agreement

                             between
           Associated International Insurance Company
            and any other company authorized to issue
                for and on behalf of the Company
                               and
                  American Re-Insurance Company


                        Table of Contents


           ARTICLE                             PAGE

          1. General Conditions                  1

          2. Business Reinsured                  1

          3. Agency Agreement                    2

          4. Territory                           2

          5. Retention and Limit                 2

          6. Exclusions                          2

          7. Special Acceptances                 3

          8. Definition of Loss                  4

          9. Definition of Loss Occurrence       4

          10. Reinsurance Premium                5

          11. Reports and Remittances            6

          12. Knowledge of Loss                  7

          13. Audits                             7

          14. Offset and Security Clause         7

          15. Insolvency Clause                  8

          16. Commencement and Termination       8


             Property Facultative Binding Agreement

                  American Re-Insurance Company
                        American Re Plaza
                      555 College Road East
                          P.O. Box 5241
                Princeton, New Jersey 08543-5241

The  Binding  Agreement  made and entered  into  by  and  between
Associated  International Insurance Company  of  Woodland  Hills,
California,  and any other company authorized to  issue  policies
for  and  on  behalf  of  the  Company (hereinafter  collectively
referred   to   as   "Company")  and   participating   reinsurers
subscribing to the respective Interests and Liabilities  Contract
to  which  this  Agreement is attached (hereinafter  collectively
referred to as "Reinsurer").

Witnesseth:

Facultative  Reinsurance  is provided by  the  Reinsurer  to  the
Company  wherein the Company shall cede to the Reinsurer and  the
Reinsurer shall accept from the Company property insurance to the
extent on the terms and conditions hereinafter set forth.

  This  Binding  Agreement authorizes the  Company  to  bind  the
  Reinsurer on Property Facultative risks for a period of 60 days
  commencing not earlier that 60 days prior to the mailing of the
  binding  information shall be mutually agreed  to  between  the
  Company and the Reinsurer.

  If  the  risk  is unacceptable to the Reinsurer, the  Reinsurer
  shall notify the Company in writing of its declination within 30
  days  after receipt of the binding information from the Company
  and the Company shall terminate the Reinsurer's liability on the
  risk  within  30 days after the receipt by the Company  of  the
  notice of declination.

In  addition  to  the above terms, the reinsurance  provided  for
risks  reinsured  hereunder  shall be  subject  to  the  terms  ,
conditions and limitations set forth herein:

1.  General Conditions

     All risks are subject to the General Conditions of the
     Property Facultative Reinsurance Certificate as of the
     effective date of this Agreement, a copy of which is
     attached to and made part of this Agreement , except as such
     General Conditions may be modified by the terms of this
     Agreement.

2.  Business Reinsured

     This reinsurance shall indemnify the Company in respect of
     excess liability incurred by the Company as a result of loss
     or losses arising from policies issued by the Company during
     the term of this Agreement and as respects property business
     classified by the Company as Fire and Allied Liens, Inland
     Marine, Commercial Multiple Peril (property section) and
     Homeowners (property section), and Difference in Conditions
     including flood and earthquake that is underwritten by the
     Company's DIC Division and General Excess and Surplus
     Division.

3.  Agency Agreement

a)  The business reinsured hereunder shall include policies
issued by the Company and any other company authorized to issue
policies for and on behalf of the Company.

b)  The Agreement is solely between the Company and the
Reinsurer.  When more than one Company is named as a party to
this Agreement, the first company named shall be the agent of the
other companies as to all matters pertaining to this Agreement.
Performance of the obligations of each party to this Agreement
shall be rendered solely to the other party; however, if the
Company becomes insolvent, the liability of the Reinsurer shall
be modified to the extent set forth in Article 15, Insolvency
Clause.

4.  Territory

     This Agreement shall apply to the territorial limits set
     forth in the Company's policies reinsured hereunder.

5.  Retention and Limit

a)  As respects risk located along the Newport-Inglewood Fault
line:

The Company shall retain and be liable for the first $5,000,000
of loss per risk each loss occurrence.  The Reinsurer shall then
be liable for the loss amount that exceeds the Company's
retention but the liability of the Reinsurer shall not exceed
$2,500,000 per risk each loss occurrence.

b)  As respects risks located at all other locations:

The Company shall retain and be liable for the first $7,500,000
of loss per risk each loss occurrence.  The Reinsurer shall be
then liable for the loss amount that exceeds the Company's
retention but the liability of the Reinsurer shall not exceed
$2,500,000 per risk each loss occurrence.

c)  It is understood and agreed that the Reinsurer's liability
shall not exceed $10,000,000 per loss occurrence for all losses
under paragraphs (a) and (b) above.

6.  Exclusions

     The following are excluded from coverage under this
     Agreement:

a)  Casualty.
b)  Boiler and Machinery.
c)  Fidelity.
d)  Surety.
e)  Credit insurance and all forms of financial guarantees.
f)  Ocean Marine.
g)  Aviation.
h)  Risks assumed by participation in or reinsurance of pools or
syndicates.
i)  All reinsurance assumed by the Company.  This does not apply
to intra-company pooling.
j)  Growing or standing crops.
k)  Loss or liability excluded by the provisions of Nuclear
Incident Exclusion Clause, Physical Damage Reinsurance Number 2
and Reinsurance Number 4, attached hereto.
l)  War risks as excluded under a standard policy containing a
war risk exclusion clause.
m)  Bridges, dams, tunnels.
n)  Jewelers Block, Fine Arts and Furriers' Customers.
o)  Loss or liability excluded by the provisions of Pollution,
Contamination, Debris Removal Exclusion Clause Number 1, attached
hereto.
p)  Loss in respect of overhead transmission and distribution
lines and their supporting structures, other than those on or
within 300 meters (or 2,000 feet) of the Insured's premises.
q)  Mortgage Impairment insurance, except this exclusion shall
not apply to Lender's Single Interest Mortgage insurance.
r)  Business classified by the Company as Railroads and
Engineered Course of Construction risks.
s)  Risks located outside of the territorial limits of the United
States of America, except this exclusion shall not apply to such
risk which total insured value is less than 20% of the total
insured values of the account.

7.  Special Acceptances

     Risks which are specifically excluded by this Agreement may
     be individually submitted by the Company to the Reinsurer
     for inclusion hereunder, and, if accepted by the Reinsurer,
     such business shall then be covered under the terms of this
     Agreement, except as such terms may be modified by such
     acceptance.

8.  Definition of Loss

a)  The term "loss" as used herein shall mean the actual loss
incurred by the Company under policies reinsured hereunder.  Such
loss shall include sums paid in settlement of claims and suits,
including allocated loss adjustment expenses (as defined
hereinafter), and in satisfaction of judgments, including
prejudgment interest when added to a judgment.

All salvages, recoveries, payments and reversals or reductions of
verdicts or judgments whether recovered, received or obtained
prior or subsequent to loss settlements under Agreement,
including amounts recoverable under other reinsurance whether
collected or not, shall be applied as if recovered, received or
obtained prior to the aforesaid settlement and shall be applied
as if recovered, received or obtained prior to the aforesaid
settlement and shall be deducted from the actual losses sustained
to arrive at the amount of the net loss.  Nothing herein shall be
construed to mean losses are not recoverable until the loss to
the Company finally has been ascertained.

b)  The term "allocated loss adjustment expenses" as used herein
shall mean expenses sustained in connection with settlement and
litigation of claims and suits, satisfaction of judgments,
resistance to or negotiations concerning a loss (which shall
include the pro rata share of the Company's outside employees
according to the time occupied in adjusting such loss and
salaries and expenses of the Company's employees while diverted
from their normal duties to the service of field adjustment, but
shall not include any salaries of officers nor normal overhead
expenses of the Company's), legal expenses and costs incurred in
connection with coverage questions and legal actions, including
declaratory judgment actions, connected thereto, interest on
judgments other than prejudgment interest when added to a
judgment, and expenses sustained to obtain recoveries, salvages
and other reimbursements, or to secure the reversal of reduction
of a verdict or judgment.

9.  Definition of Loss Occurrence

a)  The term "loss occurrence" shall mean the sum of all
individual losses directly occasioned by any one disaster,
accident or loss or series of disasters, accidents or losses
arising out of one event.

b)  As respects property catastrophe loss occurrence, the term
"loss occurrence" shall mean the sum of all individual losses
directly occasioned by any one disaster, accident or loss or
series of disasters, accidents or losses arising out of one event
which occurs within the area of one state of the United States or
province of Canada and states or provinces contiguous thereto and
to one another.  However, the duration and extent of any one
"loss occurrence" shall be limited to all individual losses
sustained by the Company occurring during any period of 168
consecutive hours arising out of and directly occasioned by the
same event except that the terms "loss occurrence" shall be
further defined as follows:

i)  As regards windstorm, hail, tornado, hurricane, cyclone,
including ensuing collapse and water damage, all individual
losses sustained by the Company occurring during any period of 72
consecutive hours arising out of and directly occasioned by the
same event.  However, the event need not be limited to one state
or province or states or provinces contiguous thereto.

ii) As regards riot, riot attending a strike, civil commotion,
vandalism and malicious mischief, all individual losses sustained
by the Company occurring during any period of 72 consecutive
hours within the area of one municipality or county and the
municipalities or counties contiguous thereto arising out of and
directly occasioned by the same event.  The maximum duration of
72 consecutive hours may be extended in respect of individual
losses which occur beyond such 72 consecutive hours during the
continued occupation of an assured's premises by strikers,
provided such occupation commenced during the aforesaid period.

iii)  As regards earthquake (the epicenter of which need not
necessarily by within the territorial confines referred to in the
opening paragraph of this Article) and fire following directly
occasioned by the earthquake, only those individual fire losses
which commence during the period of 168 consecutive hours may be
included in the Company's "loss occurrence".

iv) As regards "Freeze", only individual losses directly
occasioned by collapse, breakage of glass and water damage
(caused by bursting of frozen pipes and tanks) may be included in
the Company's "loss occurrence".

c)  The Company may choose the date and time when any such period
of consecutive hours commences provided that it is not earlier
than the date and time of the occurrence of the first recorded
individual loss sustained by the Company arising out of that
disaster, accident or loss and provided that only one such period
of 168 consecutive hours shall apply with respect to one event,
except for those "loss occurrences" referred to in subparagraphs
(i) and (ii) above where only one such period of 72 consecutive
hours shall apply with respect to one event, regardless of the
duration of the event.

d)  No individual losses occasioned by an event that would be
covered by 72 hours clauses may be included in any "loss
occurrence" claimed under the 168 hours provision.

10. Reinsurance Premium

a)  As consideration for the reinsurance provided by this
Agreement the Company shall pay the Reinsurer 10% of the Net
Written Premium, as defined in paragraph (d) of this Article, as
respects the business reinsured during the term of this
Agreement, however, subject to a minimum reinsurance premium of
$1,000,000.

b)  Within 30 days after the end of each calendar quarter, the
Company shall provide a report  to the Reinsurer setting forth
the premium due hereunder, computed in accordance with paragraph
(a) of this Article and if the premium so computed is greater
than the deposit premium paid, as set forth in paragraph (c) of
this Article, the balance shall be remitted by the Company with
its report.

c)  The Company shall pay the Reinsurer a deposit premium of
$200,000 payable on or before the inception of this Agreement.
d)  "Net Written Premium" as used herein is defined as gross
written premium of the Company for the classes of business
reinsured hereunder, less cancellations and return premiums on
policies reinsured hereunder, and less premiums ceded by the
Company for reinsurance inures to the benefit of this Agreement.

11. Reports and Remittances

a)  The Company will provide the Reinsurer with all necessary
data respecting premiums and losses, including reserves thereon,
on forms mutually acceptable to the Company and the Reinsurer.

b)  Within 30 days after the end of each month, the Company shall
render to the Reinsurer a monthly account summarizing the
following information relating to the business reinsured under
this Agreement during said month:

1)  Named of Insured;
2)  Policy Number;
3)  Effective and expiration dates of Policy;
4)  Policy Limit of Liability;
5)  Policy attachment point;
6)  Original Gross Written Premium;
7)  Net written premium due hereunder.

c)  Reinsurance premium due the Reinsurer shall be paid and
reported by the Company in accordance with provisions set forth
in Article 10, Reinsurance Premium.

d)  Within 30 days after the end of each calendar quarter the
Company shall provide and report to the Reinsurer IRAS data.

e)  The Company shall advise the Reinsurer promptly of all claims
and any subsequent developments pertaining thereto which may
reasonably be expected to develop into losses involving
reinsurance hereunder, including reserves for outstanding losses
and allocated loss adjustment expenses.

12. Knowledge of Loss

     The Company shall have no direct or indirect knowledge or
     information of any loss or impending loss under any risk to
     be reinsured affecting or threatening adversely the interest
     of the Reinsurer.

13. Audits

     The Company shall place at the disposal of the Reinsurer and
     the Reinsurer shall have the right to inspect, through its
     authorized representatives, at all reasonable times during
     the currency of this Agreement and thereafter, the books,
     records and papers of the Company pertaining to the
     reinsurance provided hereunder and all claims made in
     connection therewith.

14. Offset and Security Clause

a)  Each party hereto has the right, which may be exercised at
any time, to offset any amounts, whether on account or premiums
or losses or otherwise, due from such party to another party
under this Agreement or any other reinsurance agreement
heretofore or hereafter entered into between them, against any
amounts, whether on account of premiums or losses or otherwise
due from the latter party to the former party.  The party
asserting the right of offset may exercise this right, whether as
assuming or ceding insurer or in both roles in the relevant
agreement or agreements.

b)  Each party hereby assigns and pledges to the other party (or
to each other party, if more than one) all of its rights under
this Agreement to receive premium or loss payments at any time
forms such other party ("Collateral"), to secure its premium or
loss obligations to such other party at any time under this
Agreement and any other reinsurance agreement heretofore or
hereinafter entered into by and between them ("Secured
Obligations").  If at any time a party is in default under any
Secured Obligation or shall be subject to liquidation,
rehabilitation, reorganization or conservation proceeding, each
other party shall be entitled in its discretion, to apply, or to
withhold for the purpose of applying in due course, any
Collateral assigned and pledged to it by the former party and
otherwise to realize upon such Collateral as security for such
Secured Obligations.

c)  The security interest described herein, and the term
"Collateral", shall apply to all payments and other proceeds in
respect of the rights assigned and pledged.  A party's security
interest in Collateral shall be deemed evidenced only by the
counterpart of this Agreement delivered to such party.

d)  Each right under this Article is a separate and independent
right, exercisable, without notice or demand, alone or together
with other rights, in the sole election of the party entitled
thereto, and no waiver, delay, or failure to exercise, in respect
of any right, shall constitute a waiver of any other right.  The
provisions of this Article shall survive any cancellation or
other termination of this Agreement.

15. Insolvency Clause

a)  In the event of the insolvency of the Company and the
appointment of a conservator, liquidator or statutory successor
of the Company, the reinsurance provided by this Agreement shall
be payable to such conservator, liquidator or statutory successor
immediately upon demand, subject to the right of offset and with
reasonable provisions for verification of the Reinsurer's
liability, on the basis of claim allowed against the insolvent
Company by any court if competent jurisdiction or by any
conservator, liquidator, or statutory successor of the Company
having the authority to allow such claims, with diminution
because of such insolvency or because such conservator,
liquidator or statutory successor has failed to pay all or a
portion of any claims.  Payments by the Reinsurer as above set
forth shall be made directly to the Company or to its
conservator, liquidator or statutory successor, except where this
Agreement specifically provides another payee of such reinsurance
in the event of the insolvency of the Company.

b)  In the event of the insolvency of the Company, the
liquidator, conservator or statutory successor of the Company
shall give the Reinsurer written notice of the pendency of each
claim against the Company on a policy or bond reinsured within a
reasonable time after such claim is filed in the insolvency
proceeding.  During the pendency of such claim, the Reinsurer
may, at its own expense, investigate such claim and interpose in
the proceeding where such claim is to be adjudicated any defense
or defenses which it may deem available to the Company, its
conservator, liquidator or statutory successor.  Subject to court
approval, any expense thus incurred by the Reinsurer shall be
chargeable against the Company as part of the expense of
liquidation to the extent of such proportionate share of the
benefit as shall accrue to the Company solely as a result of the
defense undertaken by the Reinsurer.

16. Commencement and Termination

a)  This Agreement shall take effect as of 12:01 a.m., Standard
Time, June 1, 1996 and continue in force until 12:01 a.m.,
Standard Time, June 1, 1997.  The term "Standard Time" as used
herein shall mean the Standard Time as specified in the original
policy of insurance.

b)  The Reinsurer shall not be liable for losses arising under
Policies incepting on or after the expiration date of this
Agreement.  The Reinsurer shall remain liable for losses
occurring under Policies in force at the expiration date of this
Agreement until the earlier of the Policy's next anniversary or
renewal date, natural expiration or the Policy's prior
termination date.

c)  Notwithstanding the expiration of this Agreement, the
provisions of this Agreement shall continue to apply to all
unfinished business hereunder to the end that all obligations and
liabilities incurred by each party hereunder prior to said date
is fully performed and discharged.


                       GENERAL CONDITIONS


  The Reinsurer agrees to indemnify the Company against losses or
  damages  which  the Company is legally obligated  to  pay  with
  respect to which insurance is afforded during the term of  this
  Certificate  under  the  policy  reinsured,  subject   to   the
  reinsurance limits and coverages shown in the Declarations.  The
  Reinsurer shall not indemnify the Company for liability  beyond
  circumscribed policy provisions, including but not  limited  to
  punitive,  exemplary,  consequential  or  compensatory  damages
  resulting from an action of an insured or assignee against  the
  Company.  The Company warrants the copy of the policy forwarded
  to  the  Reinsurer to be a true and complete copy of  the  said
  policy,  and  agrees to notify the Reinsurer  promptly  of  any
  changes made therein, provided that such changes shall  not  be
  binding  upon  the  Reinsurer until accepted thereby.   Nothing
  contained herein shall in any manner create any obligations  of
  the Reinsurer or establish any rights against the Reinsurer  in
  favor of the direct insured or any third parties or any persons
  not parties to this Certificate of Reinsurance.

  The  Company  shall  settle  all claims  under  its  policy  in
  accordance  with  the  terms and conditions  thereof.   If  the
  reinsurance hereunder is pro rata, the Reinsurer shall be liable
  for its pro rata proportion of settlements made by the Company.
  If  the reinsurance hereunder is excess, the Reinsurer shall be
  liable  for  its excess proportion of settlements made  by  the
  Company  after  deduction  of  any  recoveries  from  pro  rata
  reinsurance inuring to the benefit of the Reinsurer.

  The  Reinsurer shall be liable for its proportion of  allocated
  loss expenses incurred by the Company in the same ratio that the
  Reinsurer's  share of the settlement of judgment bears  to  the
  total  amount of such settlement or judgment under  the  policy
  reinsured.  The term "allocated loss expense" means all expenses
  incurred in the investigation and settlement of claims or suits,
  including  the  salaries and expenses of  staff  adjusters  but
  excluding other Company salaries and office expenses.  It  also
  includes  court  costs and interest on any  judgment  or  award
  provided the Reinsurer's prior consent to trial court proceedings
  has  been obtained.  Allocated loss expenses shall not  include
  expenses  incurred by the Company in regard to  any  actual  or
  alleged liability that it not within the circumscribed provisions
  of the policy reinsured.

  The  Company shall advise the Reinsurer promptly of  any  claim
  and any subsequent developments pertaining thereto which, in the
  opinion  of the Company, may involve the reinsurance hereunder.
  The Company has the obligation to investigate and defend claims
  or suits affecting this reinsurance and to pursue such claims or
  suits  to final determination.  The Company, when so requested,
  will  afford the Reinsurer an opportunity to be associated with
  the Company, at the expense of the Reinsurer, in the defense or
  control  of  any  claim,  suit  or  proceeding  involving  this
  reinsurance, and the Company and the Reinsurer shall cooperate in
  every respect in the defense and control of such claim, suit or
  proceeding.

  The Reinsurer shall be paid or credited with its proportion  of
  salvages (i.e., recoveries or reimbursements made or obtained by
  the Company) less the cost of obtaining such salvage, excluding
  the office expenses of the Company and the salaries and expenses
  of all employees of the Company.  If the reinsurance hereunder is
  excess, salvage shall be applied in the inverse order in  which
  liability attaches, otherwise salvage shall be applied on a pro
  rata basis.

  The Company shall furnish proof that payment of a loss and loss
  expense has actually been made by the Company and payment by the
  Reinsurer  of  its proportion thereof shall be  made  promptly;
  provided  however, in the event of insolvency  of  the  Company
  payment  by  the Reinsurer of its proportion of loss  and  loss
  expense which the Company has incurred or for which it is liable,
  shall be made to the liquidator, receiver or statutory successor
  of the Company in accordance with the provisions of Section 8 of
  these general conditions.

  The  Company  shall place at the disposal of the Reinsurer  and
  the  Reinsurer  shall  have the right to inspect,  through  its
  authorized  representative, at all reasonable times during  the
  currency of this Certificate and thereafter, the books, records
  and papers of the Company pertaining to the reinsurance provided
  hereunder and all claims made in connection therewith.

  The  reinsurance provided by this Certificate shall be  payable
  by  the Reinsurer directly to the Company or to its liquidator,
  receiver or statutory successor on the basis of the liability of
  the Company under the policy reinsured without diminution because
  of the insolvency of the Company.  In the event of the insolvency
  of the Company, the liquidator, receiver or statutory successor
  of the Company shall give written notice of the pendency of each
  claim  against  the  Company on the policy reinsured  hereunder
  within  a  reasonable time after such claim  is  filed  in  the
  insolvency proceeding and during the pendency of such claim the
  Reinsurer may investigate such claim and interpose at  its  own
  expense in the proceeding where such claim is to be adjudicated
  any  defenses  or defenses which it may deem available  to  the
  Company, its liquidator, receiver or statutory successor.   The
  expense  thus  incurred by the Reinsurer shall  be  chargeable,
  subject to court approval against the insolvent company as part
  of the expense of liquidation to the extent of such proportionate
  share of the benefit which may accrue to the Company solely  as
  the  result  of  the defense undertaken by the Reinsurer.   The
  reinsurance shall be payable as hereinbefore in this  paragraph
  provided except (a) where this Certificate specifically provides
  another payee of such reinsurance in the event of the insolvency
  of  the Company and (b) where the Reinsurer with the consent of
  the   direct  insured  or  insureds  has  assumed  such  policy
  obligations of the Company as direct obligations of the Reinsurer
  to  the  payee  under such policy and in substitution  for  the
  oblations of the Company to such payee.

  Each party hereto shall have, and may exercise at any time  and
  from time to time, the right to offset any balance or balances,
  whether  on  account  of premiums or on account  of  losses  or
  otherwise, due from such party to the other (or, if  more  that
  one, any other) party hereto under this Certificate or under any
  other  reinsurance  certificate  or  agreement  heretofore   or
  hereafter entered into by and between them, and may offset  the
  same against any balance or balances due or to become due to the
  former  from the latter under the same or any other reinsurance
  certificate or agreement between them; and the party  asserting
  the  right  to  offset shall have and may exercise  such  right
  whether  the balance or balances due or to become due  to  such
  party form the other are on account of premiums or on account of
  losses or otherwise and regardless of the capacity, whether  as
  assuming insurer or as ceding insurer, in which each party acted
  under  the  certificate or agreement or if more that  one,  the
  different certificates and agreement involved, provided, however,
  that,  in the event of the insolvency of a party hereto, offset
  shall  only  be  allowed in accordance with the  provisions  of
  Section 538 of the Insurance Law of the State of New York.

  This  Certificate  may be canceled by either party  giving  not
  less than thirty days' notice in writing by registered mail  to
  the  other party.  If canceled by the Reinsurer, adjustment  of
  premium  shall  be on the pro rata basis.  If canceled  by  the
  Company, with simultaneous cancellation of the original  policy
  reinsured,  adjustment of premium shall be on  the  short  rate
  basis.  However, if the Company's original policy reinsured  is
  canceled, same shall constitute simultaneous cancellation of this
  certificate and calculation of the reinsurance premium hereunder
  shall  follow the Company's calculation in the use of the short
  rate or pro rata tables.

IN  WITNESS WHEREOF THE AMERICAN RE-INSURANCE COMPANY has  caused
this  Certificate  to  be  signed  by  its  Vice  President   and
Secretary,  but  same  shall not be binding  upon  the  Reinsurer
unless  countersigned  by  an authorized  representative  of  the
Reinsurer.



                NUCLEAR INCIDENT EXCLUSION CLAUSE
             PHYSICAL DAMAGE -- REINSURANCE -- NO. 2

  (1)This  Reinsurance  does  not cover  any  loss  or  liability
accruing to the Reassured, directly or indirectly and whether  as
Insurer  or  Reinsurer, from any Pool of Insurers  or  Reinsurers
formed  for  the  purpose of covering Atomic  or  Nuclear  Energy
risks.

  (2)Without  in any way restricting the operation  of  paragraph
(1)  of this Clause, this Reinsurance does not cover any loss  or
liability  accruing to the Reassured, directly or indirectly  and
whether  as  Insurer  or  Reinsurer, form any  insurance  against
Physical Damage (including business interruption or consequential
loss arising out of such Physical Damage) to:

  I.Nuclear   reactor  power  plants  including   all   auxiliary
     property on the site, or

  II.   Any   other   nuclear  reactor  installation,   including
     laboratories  handling radioactive materials  in  connection
     with  reactor  installations and  "critical  facilities"  as
     such, or

  III.Installations  for fabricating complete  fuel  elements  or
     for  processing  substantial quantities of "special  nuclear
     material,"   and  for  reprocessing,  salvaging,  chemically
     separating, storing or disposing of "spent" nuclear fuel  or
     waste materials, or

  IV.  Installations other than those listed in paragraph (2) III
     above  using substantial quantities of radioactive  isotopes
     or other products of nuclear fission.

  (3)Without  in any way restricting the operations of paragraphs
(1)  and (2) hereof, this Reinsurance does not cover any loss  or
liability by radioactive contamination accruing to the Reassured,
directly or indirectly, and whether as Insurer or Reinsurer, from
any  insurance on property which is on the same site as a nuclear
reactor  power  plant  or  other nuclear installation  and  which
normally  would  be insured therewith except that this  paragraph
(3) shall not operate:

     (a)  where Reassured does not have knowledge of such nuclear
     reactor power plant or nuclear installation, or

     (b)  where  said  insurance contains a  provision  excluding
     coverage for damage to property caused by or resulting  from
     radioactive contamination, however caused.  However  on  and
     after  1st  January 1960 this sub-paragraph (b)  shall  only
     apply  provided the said radioactive contamination exclusion
     provision  has  been approved by the Governmental  Authority
     having jurisdiction thereof.

  (4)Without  in any way restricting the operations of paragraphs
(1), (2) and (3) hereof, this Reinsurance does not cover any loss
or   liability  by  radioactive  contamination  accruing  to  the
Reassured,  directly  or indirectly, and whether  as  Insurer  or
Reinsure,  when such radioactive contamination is a named  hazard
specifically insured against.

  (5)It  is  understood  and agreed that this  Clause  shall  not
extend to risks using radioactive isotopes in any form where  the
nuclear  exposure is not considered by the Reassured  to  be  the
primary hazard.

  (6)The  term "special nuclear material" shall have the  meaning
given  it  in  the  Atomic Energy Act  of  1954  or  by  any  law
amendatory thereof.

  (7)Reassured to be sole judge of what constitutes:

     (a) substantial quantities, and

     (b) the extent of installation, plant or site.

  Note.  --  Without  in  any way restricting  the  operation  of
  paragraph (1) hereof, it is understood and agreed that:

     (a)  All  policies  issued by the  Reassured  on  or  before
     31st December 1957 shall be free from the application of the
     other  provisions  of  this  Clause  until  expiry  date  or
     31st December 1960 whichever first occurs whereupon all  the
     provision of this Clause shall apply,

     (b)  With  respect  to any risk located in  Canada  policies
     issued  by  the  Reassured on or before 31st  December  1958
     shall  be  free from the application of the other provisions
     of  this  Clause  until expiry date or  31st  December  1960
     whichever first occurs whereupon all the provisions of  this
     Clause shall apply.

     NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE - NO. 4


(1)  This  reinsurance  does  not cover  any  loss  or  liability
accruing to the Reassured as a member of, or subscriber  to,  any
association  of  insurers  formed for  the  purpose  of  covering
nuclear energy risks or as a direct or indirect reinsurer of  any
such member, subscriber or association.


(2)  Without  in  any way restricting the operations  of  Nuclear
Incident  Exclusion Clause No. 1B - Liability, No. 2  -  Physical
Damage,  No. 3 - Boiler and Machinery and paragraph (1)  of  this
clause,  it  is  understood and agreed that for all  purposes  as
respects  the  reinsurance  assumed by  the  Reinsurer  from  the
Reassured,  all original insurance policies or contracts  of  the
Reassured  (new,  renewal and replacement)  shall  be  deemed  to
include  the  applicable existing Nuclear Clause  and/or  Nuclear
Exclusion  Clause(s) in effect at that time  and  any  subsequent
revisions  thereto as agreed upon and approved by  the  Insurance
Industry and/or a qualified Advisory or Rating Bureau.

            POLLUTION, CONTAMINATION, DEBRIS REMOVAL
                    EXCLUSION CLAUSE - NO. 1


I.  DEFINITION

     "CONTAMINATION" means any unclean or unsafe or  damaging  or
     injurious  or  unhealthful  condition  arising  out  of  the
     presence  of  pollutants, whether permanent or transient  in
     any environment;

     "ENVIRONMENT"  includes any person,  any  real  or  personal
     property, animals, crops and vegetation, land including land
     under  which  the  building  is  placed,  bodies  of  water,
     underground water or water table supplies, air and any other
     feature  of  the  earth or its atmosphere,  whether  or  not
     altered, developed or cultivated, including, but not limited
     to,  any  of the above owned, controlled or occupied  by  an
     insured;

     "POLLUTANTS"  means  smoke,  vapors,  soot,  fumes,   acids,
     sounds, alkalies, chemicals, liquids, solids, gases, thermal
     pollutants, waste, and all other irritants, or contaminants.
     Waste  includes  material to be recycled,  reconditioned  or
     reclaimed;

II. POLLUTION AND CONTAMINATION EXCLUSION

     This Reinsurance does not cover:

       Loss  or  damage  caused  by  the  release,  discharge  or
       dispersal  of  pollutants or contaminants (as  defined  in
       Section  I above) into the environment anywhere,  anytime,
       in  anyway, whether accidental or intentional,  sudden  or
       intermittent or continuous, unless the release,  discharge
       or  dispersal  is  itself caused by any of  the  following
       "specified  causes  of  loss": fire, lightning,  aircraft,
       explosion,   riot,   civil  commotion,  smoke,   vehicles,
       windstorm  or hail to property contained in any  building,
       vandalism,  malicious  mischief or leakage  or  accidental
       discharge  form  automatic fire protection  systems.   The
       term  "Loss  or Damage" is understood to also include  any
       claim  arising from loss of use.  If loss  or  damage   by
       the  above  "specified causes of loss" results,  then  the
       Reinsurer under this Certificate shall be liable  for  the
       resulting  loss  or damage caused by the "specified  cause
       of loss."

III.  ASBESTOS EXCLUSION

     This reinsurance does not cover:

     1.Asbestos,     dioxin    or    polychlorinated    biphenols
       (hereinafter all referred to as "Materials") removal  from
       any  good,  product or structure unless  the  asbestos  is
       itself   damaged  by  fire,  lightning,  aircraft  impact,
       explosion,  riot, civil commotion, smoke, vehicle  impact,
       windstorm or hail, vandalism, malicious mischief,  leakage
       or  accidental  discharge from automatic  fire  protective
       systems.

     2.Demolition  or  increased cost of reconstruction,  repair,
       debris  removal  or  loss  of  use  necessitated  by   the
       enforcement  of  any  law  or  ordinance  regulating  such
       Materials.

     3.Any  governmental direction or request declaring that such
       Materials  present  in  or part  of  or  utilized  on  any
       undamaged portion of the insured's property can no  longer
       be  used  for  the  purpose for which it was  intended  or
       installed and must be removed or modified.

     The  coverage  afforded does not apply to  payment  for  the
     investigation or defense of any loss, damage  or  any  cost,
     loss  of use expense, fine or penalty or for any expense  or
     claim or suit related to any of the above.

IV. DEBRIS REMOVAL EXCLUSION

     Notwithstanding   any  other  exclusion   listed   in   this
     reinsurance, this reinsurance shall only cover  the  expense
     to remove debris of insured property damaged or destroyed by
     an  insured peril during the policy term and, then, only  up
     to  an amount equal to 25% of the amount payable under  this
     Reinsurance.

     This Reinsurance does not cover any expense involved to:

     1.Extract  contaminants or pollutants, as defined in Section
       I, from the debris; or
     2.Extract  contaminants or pollutants, as defined in Section
       I, from land or water; or
     3.Remove,  restore or replace contaminated or polluted  land
       or water; or
     4.Remove  or transport any property or debris to a site  for
       storage  or decontamination required because the  property
       or  debris  is  affected  by pollutants  or  contaminants,
       whether    or    not   such   removal,    transport,    or
       decontamination is required by law or regulation.


IT  IS  CONDITION PRECEDENT TO RECOVERY UNDER THIS  CERTIFICATION
THAT  THE  COMPANY SHALL HAVE PAID [OR AGREED TO PAY] FOR  DIRECT
PHYSICAL  LOSS OR DAMAGE TO THE PROPERTY REINSURED HEREUNDER  AND
THAT  THE COMPANY RECEIVED WRITTEN NOTICE OF INTENT TO CLAIM  FOR
COST  OF  REMOVAL OF DEBRIS OR COST TO CLEAN UP  NOT  LATER  THAN
TWELVE MONTHS AFTER THE DATE OF SUCH PHYSICAL LOSS OR DAMAGE.



                           ENDORSEMENT


     Attached to and forming part of Property Facultative Binding
Agreement  No.  428-0016 made and entered  into  by  and  between
ASSOCIATED  INTERNATIONAL INSURANCE COMPANY  of  Woodland  Hills,
California,  and  any  other company for  which  the  Company  is
authorized  to  issue policies for and on behalf of  the  Company
(hereinafter  collectively referred  to  as  "Company")  and  the
Subscribing Reinsurer executing the Addendum to the Interests and
Liability  Contract attached hereto (hereinafter referred  to  as
the "Reinsurer")

     It   is   mutually  understood  and  agreed  that  effective
12:01  a.m.  Standard Time July 1, 1997, the provisions  of  this
Agreement are revised as follows:

     A.   Article 5 - Retention and Limit is amended as follows:

          5.       (a)   As   respects  risks  written   by   the
                   Company's    General   Excess   and    Surplus
                   Division:

                    The  Company shall retain and be  liable  for
                    the  first $10,000,000 of loss per  risk  net
                    and   treaty   each  loss  occurrence.    The
                    Reinsurer shall then be liable for  the  loss
                    amount  that exceeds the Company's  retention
                    but  the liability of the Reinsurer shall not
                    exceed   $2,5000,000  per  risk   each   loss
                    occurrence.

                   (b)   As   respects  risks  written   by   the
                   Company's Pacific Coast DIC Division:

                    The  Company shall retain and be  liable  for
                    the first $5,000,000 of loss per risk net and
                    treaty  each loss occurrence.  The  Reinsurer
                    shall then be liable for the loss amount that
                    exceeds  the  Company's  retention  but   the
                    liability  of the Reinsurer shall not  exceed
                    $2,5000,000 per risk each loss occurrence.

                   (c)  It  is  understood and  agreed  that  the
                   Reinsurer's   liability   shall   not   exceed
                   $10,000,000  per  loss  occurrence   for   all
                   losses  under paragraphs (a) and (b)  of  this
                   Article.

     B.   Article 10 - Reinsurance Premium is amended as follows:

          10. REINSURANCE PREMIUM

                   (a)   As  consideration  for  the  reinsurance
                   provided  by this Agreement the Company  shall
                   pay  the  Reinsurer  10% of  the  Net  Written
                   Premium, as defined in paragraph (c)  of  this
                   Article,  as  respects the business  reinsured
                   during the term of this Agreement.

                   (b)  Within  30  days after the  end  of  each
                   calendar quarter, the Company shall provide  a
                   report  to  the  Reinsurer setting  forth  the
                   premium  due hereunder, computed in accordance
                   with paragraph (a) of this Article.

                   (c)  "Net  Written Premium" as used herein  is
                   defined  as  gross  written  premium  of   the
                   Company  for the classes of business reinsured
                   hereunder,   less  cancellations  and   return
                   premiums on policies reinsured hereunder,  and
                   less   premiums  ceded  by  the  Company   for
                   reinsurance  that  inures to  the  benefit  of
                   this Agreement.

     C.   Paragraph   (a)  of  Article  16  -  Commencement   and
          Termination is amended as follows:

                   (a)  This  agreement shall take effect  as  of
                   12:01  a.m.,  Standard Time June 1,  1996  and
                   continue  in force until 12:01 a.m.,  Standard
                   Time  December  31, 1998.  The term  "Standard
                   Time"  as  used herein shall mean the Standard
                   Time  as  specified in the original policy  of
                   insurance.

     All other terms and conditions remain unchanged.



                            ADDENDUM


Attached  to  and  forming part of the Interests and  Liabilities
Contract   made  and  entered  into  by  and  between  ASSOCIATED
INTERNATIONAL  INSURANCE COMPANY of Woodland  Hills,  California,
and  any  other  company for which the Company is  authorized  to
issue  policies  for  and on behalf of the  Company  (hereinafter
collectively  referred to as "Company") and AMERICAN RE-INSURANCE
COMPANY,  a  Delaware Corporation with Administrative Offices  in
Princeton,   New   Jersey  (hereinafter  referred   to   as   the
"Subscribing Reinsurer").

It  is  mutually  agreed between the Company and the  Subscribing
Reinsurer that the Property Facultative Binding Agreement No. 428-
0016  is amended as of 12:01 a.m. Standard Time July 1, 1997,  in
accordance with the provisions of attached Endorsement E001.

IN  WITNESS WHEREOF, the parties hereto have caused this Addendum
to   be   signed   in   duplicate  by   their   duly   authorized
representatives in Woodland Hills, California, this 18th  day  of
November, 1997.

ACCEPTED:
ASSOCIATED INTERNATIONAL INSURANCE COMPANY
and  any  other company authorized to issue policies for  and  on
behalf of the Company



_________________________________



_________________________________
Attested by:


and in Princeton, New Jersey, this 13th day of November, 1997,

AMERICAN RE-INSURANCE COMPANY



_________________________________



_________________________________
Attested by:
                        ENDORSEMENT NO. 2


Attached  to and forming part of Reinsurance agreement  No.  428-
0016 between ASSOCIATED INTERNATIONAL INSURANCE COMPANY, Woodland
Hills,  California and any other company which is  authorized  to
issue  policies  for  and on behalf of the Company  (therein  and
herein  referred  to  as  the "Company")  and  the  AMERICAN  RE-
INSURANCE  COMPANY,  a Delaware Corporation  with  Administrative
Offices in Princeton, New Jersey (therein and herein referred  to
as the "Reinsurer").

It  is  hereby  understood and agreed between the parties  hereto
that  effective as of 12:01 a.m., Standard Time, January 1, 1998,
this Agreement is amended as set forth herein.

I.   Article  5 -- Retention and Limit is deleted in its entirety
     and replaced as follows:

     As  respects  risks written by the Company's General  Excess
     and Surplus Division and its Pacific Coast DIC Division, the
     Reinsurer  shall be liable for a one (1) time match  of  the
     Company's   net  and  treaty  retention,  subject   to   the
     following:

           a $1,000,000 minimum attachment point;
           a maximum of $2,500,000 in any one layer;
           a maximum of $2,500,000 on any one risk, and
           a maximum of $10,000,000 in any one loss occurrence.

II.  Paragraph  (a)  of  Article  10 --  Reinsurance  Premium  is
     deleted  and  the  subsequent  paragraphs  re-lettered   and
     revised to read as follows:

     (a)  Within  30 days after the end of each calendar quarter,
          the  Company  shall provide a report to  the  Reinsurer
          setting forth the net written premium due hereunder.

     (b)  "Net Written Premium" as used herein is defined as  the
          Company's  gross  written premium for  the  classes  of
          business   reinsured  hereunder,  plus  any  additional
          premiums,  less  cancellations and return  premiums  on
          policies reinsured hereunder and less premiums ceded by
          the  Company for reinsurance that inures to the benefit
          of this Agreement.

III. A  new Article 11 -- Commission is added as follows, and all
     subsequent Articles are renumbered accordingly.

     The Reinsurer will allow the Company a ceding commission of:

          (1)  30% on all business ceded by the company's General
               Excess and Surplus Division or
          (2)  27.5%  on  all  business ceded  by  the  company's
               Pacific Coast DIC Division

     on  all  gross  premiums  ceded  on  each  risk  under  this
     Agreement   and   said  commission  allowed  shall   include
     provision for all taxes, assessments and any other  expenses
     of   whatsoever  nature  except  allocated  loss  adjustment
     expenses.

     All other terms and conditions remain unchanged.

IN   WITNESS  WHEREOF,  the  parties  hereto  have  caused   this
Endorsement to be executed in duplicate by their duly  authorized
representatives

in Woodland Hills, California, this 16th day of March, 1998.

ACCEPTED:
ASSOCIATED INTERNATIONAL INSURANCE COMPANY
and  any  other company authorized to issue policies for  and  on
behalf of the Company



_________________________________



_________________________________
Attested by:


and in Princeton, New Jersey, this 10th day of March, 1998,

AMERICAN RE-INSURANCE COMPANY



_________________________________



_________________________________
Attested by: