Document:

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                                                             EXHIBIT 10.6.2.1

                                          EXECUTION COPY

                 AGGREGATE LOSS PORTFOLIO REINSURANCE AGREEMENT

                                     between

                            POTOMAC INSURANCE COMPANY

                              Boston, Massachusetts

                                       and

                           NATIONAL INDEMNITY COMPANY

                                 Omaha, Nebraska

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                                TABLE OF CONTENTS

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                                                                                                               PAGE
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Article I                  DEFINITIONS............................................................................2
Article II                 COVERAGE..............................................................................11
Article III                GENERAL PROVISIONS....................................................................14
Article IV                 REINSURANCE PREMIUM...................................................................16
Article V                  ADMINISTRATION; CHANGES...............................................................17
Article VI                 DURATION AND TERMINATION AND RECAPTURE................................................18
Article VII                ACCOUNTING............................................................................19
Article VIII               INSOLVENCY............................................................................19
Article IX                 FUNDING...............................................................................20
Article X                  ARBITRATION...........................................................................27
Article XI                 NONCONTRACTUAL COVERAGES..............................................................31
Article XII                SALVAGE, SUBROGATION AND CEDED REINSURANCE AGREEMENTS.................................32
Article XIII               WARRANTIES............................................................................35
Article XIV                MISCELLANEOUS PROVISIONS..............................................................36
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                                    SCHEDULES

SCHEDULE 1     -       POOLS AND ASSOCIATIONS
SCHEDULE 2     -       REINSURANCE PREMIUM
SCHEDULE 3     -       EXCLUDED PIP LOSSES

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                 AGGREGATE LOSS PORTFOLIO REINSURANCE AGREEMENT

                  This Agreement, dated as of March 19, 2001 (this "Agreement")
is made and entered into by and between Potomac Insurance Company, a corporation
organized under the laws of Pennsylvania (hereinafter referred to as the
"Reinsured"), and National Indemnity Company, a corporation organized under the
laws of Nebraska (hereinafter referred to as the "Reinsurer") to be effective as
of the Effective Date (as defined below).

                  The Reinsured and the Reinsurer mutually agree to reinsure
under the terms and conditions stated herein. This Agreement is an indemnity
reinsurance agreement solely among the Reinsured and the Reinsurer, and the
performance of the obligations of each party under this Agreement shall be
rendered solely to the other party. In no instance, except as set forth in
Article VIII of this Agreement, shall anyone other than the Reinsured or the
Reinsurer have any rights under this Agreement.

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                                    ARTICLE I

                                   DEFINITIONS

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

                  "ADMINISTRATIVE SERVICES AGREEMENT" means the Administrative
Services Agreement entered into by and among the Reinsured, CGU Insurance
Company and the Reinsurer.

                  "AGGREGATE LIMIT" shall have the meaning specified in Section
2.1.

                  "AGREEMENT" shall have the meaning specified in the Recitals.

                  "ALLOCATED LOSS ADJUSTMENT EXPENSES" means all court
arbitration, mediation or other dispute resolution costs, attorneys' fees,
expenses, fees and interest accrued prior to or after any judgment, award,
agreement or compromise (excluding any overhead, internal costs, staff costs and
similar internal costs) incurred in connection with any defense, settlement,
investigation or audit of or negotiations in relation to any Reinsured Risk.

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                  "BUSINESS COVERED" means

         (a)      all losses from all perils on policies or contracts of
                  insurance or reinsurance issued by the Reinsured or any CGU
                  Insurer (or any predecessor thereof to which such CGU Insurer
                  has succeeded by merger or otherwise) which terminated on or
                  before December 31, 1987 and, with respect to policies or
                  contracts of insurance or reinsurance issued by the Reinsured
                  or any CGU Insurer (or any predecessor thereof to which the
                  Reinsured or any CGU Insurer has succeeded by merger or
                  otherwise) on or before January 1, 1987 which terminated after
                  December 31, 1987, all losses from all perils incurred before
                  January 1, 1988;

         (b)      all asbestos related losses covered by policies or contracts
                  of insurance or reinsurance issued by the Reinsured or any CGU
                  Insurer (or any predecessor thereof to which the Reinsured or
                  any CGU Insurer has succeeded by merger or otherwise) which
                  terminated on or before December 31, 1992 and, with respect to
                  policies or contracts of insurance or reinsurance issued by
                  the Reinsured or any CGU Insurer (or any predecessor thereof
                  to which the Reinsured or any CGU Insurer has succeeded by
                  merger or otherwise) on or

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                  before January 1, 1992 which terminated after December 31,
                  1992, all asbestos-related losses covered by such policies or
                  contracts incurred before January 1, 1993;

         (c)      all lead-related losses on policies or contracts of insurance
                  or reinsurance issued by the Reinsured or any CGU Insurer (or
                  any predecessor thereof to which the Reinsured or any CGU
                  Insurer has succeeded by merger or otherwise) which terminated
                  on or before December 31, 1995 and, with respect to policies
                  or contracts of insurance or reinsurance issued by the
                  Reinsured or any CGU Insurer (or any predecessor thereof to
                  which the Reinsured or any CGU Insurer has succeeded by merger
                  or otherwise) on or before January 1, 1995 which terminated
                  after December 31, 1995, all lead-related losses incurred
                  before January 1, 1996; and

         (d)      all losses arising from the pools and associations listed in
                  Schedule 1 hereto;

                  in each case excluding (x) all workers' compensation("WC")
                  losses (except for coverage 1(b) claims that involve asbestos,
                  any WC in pools and associations in Schedule 1 and any WC in
                  other assumed

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                  reinsurance business included in Business Covered) and (y) any
                  liability of the Reinsured or any CGU Insurer ceded to CGNU
                  plc or any majority-owned non-U.S. subsidiary thereof or
                  predecessor of such a subsidiary under any arrangement under
                  which the Reinsured or such CGU Insurer was acting as a
                  fronting insurer for such non-U.S. person. It is understood
                  that clauses (b), (c) and (d) above are in addition to and do
                  not limit clause (a) above.

                  "BUSINESS DAY" means any day on which a United States national
banking association in the State of New York is open for regular business.

                  "CEDED REINSURANCE AGREEMENTS" means all agreements of
reinsurance other than this Agreement whereby the Reinsured or any CGU Insurer
has ceded liability with respect to the Business Covered.

                  "CGU INSURERS" means all property and casualty companies a
majority of the stock of which is owned directly or indirectly by CGU
Corporation, including CU Lloyd's of Texas but excluding Houston General
Insurance Company, Traders & General

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Insurance Company, Traders & Pacific Insurance Company and Houston General
Lloyds.

                  "CGU REINSURANCE AGREEMENT" means the reinsurance agreement
entered into between CGU Insurance Company and the Reinsured whereby business
covered under the definition of Business Covered hereunder which was written by
members of the CGU intercompany pool or certain other affiliates of the
Reinsured was assumed by the Reinsured.

                  "DECLARATORY JUDGMENT EXPENSE" means all attorneys' fees,
expenses and other litigation costs attributable to coverage analysis or
declaratory judgment actions or other coverage dispute resolution procedures
brought to determine defense and/or indemnification or payment obligations for
any Reinsured Risk, whether or not a loss has been paid.

                  "EFFECTIVE DATE" means the earlier of (i) the Closing Date
under the Stock Purchase Agreement dated as of September 24, 2000, as amended,
by and among CGNU plc, White Mountains Insurance Group, Ltd. and others and (ii)
July 1, 2001.

                  "EXCLUDED LIABILITY" means the following:

         (a)      any sum paid or booked as paid prior to the Inception Date in
                  settlement or payment of any obligation arising from Business
                  Covered, including any such sums

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                  for loss, Allocated Loss Adjustment Expense, Declaratory
                  Judgment Expense or Noncontractual Damages;

         (b)      any liabilities for losses incurred (i) due to fraud by a
                  member of the Board of Directors or a corporate officer of the
                  Reinsured (or any directors or officers of the CGU Insurers)
                  acting individually or collectively or in collusion with any
                  individual or corporation or any other organization or party
                  involved in the presentation, defense or settlement of any
                  Reinsured Risk or (ii) in respect of any tortious or bad faith
                  act of the Reinsured or any of the CGU Insurers in connection
                  with any insurance policies or reinsurance contracts not
                  reinsured hereunder;

         (c)      any liability of the Reinsured or any of the CGU Insurers with
                  respect to any tax or assessment, whether paid directly by the
                  Reinsured or billed to the Reinsured by or through a cedent or
                  insured, regardless of whether the tax is denominated as an
                  income tax, excise tax, premium tax, surplus lines tax, or any
                  other tax or assessment (excluding any pool or other
                  assessment for payment of losses or loss adjustment expenses,
                  including without limitation any governmental charge which in
                  the future is enacted in

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                  replacement in whole or in part of any insurance or
                  reinsurance liability, all of which shall constitute Reinsured
                  Risks);

         (d)      any liability of the Reinsured or any CGU Insurer under any
                  insurance policy or reinsurance contract not constituting
                  Business Covered;

         (e)      subject to the provisions of Section 11.2, all coverage
                  excluded in the underlying insurance policies and reinsurance
                  contracts reinsured by this Agreement;

         (f)      any liability of the Reinsured or any CGU Insurer ceded to any
                  majority-owned non-U.S. subsidiary of CGNU plc or predecessor
                  of such a subsidiary under any arrangement under which the
                  Reinsured or such CGU Insurer was acting as a fronting insurer
                  for such non-U.S. person;

         (g)      Any policyholder dividends, return premiums and retrospective
                  or loss sensitive premiums (except reinstatement or adjustment
                  premiums (l) paid in connection with reinsurance inuring to
                  the benefit of the Reinsurer with respect to risks reinsured
                  hereunder or where the payment of such amounts benefits the
                  Reinsurer either by way of reduction in the net present value
                  of the liabilities of the Reinsurer with respect to risks
                  reinsured under this

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                  Agreement or by increasing reinsurance recoverables or
                  coverage available to the Reinsurer hereunder in an amount
                  greater than the dividend or premium; or (2) where the
                  Reinsurer has given its prior approval to the payment of such
                  reinstatement premiums).

         (h)      all losses specifically listed on Schedule 3.

                  "INCEPTION DATE" shall have the meaning specified in Section
2.1.

                  "INITIAL REINSURANCE PREMIUM" shall have the meaning specified
in Section 4.1.

                  "INTEREST RATE" means an annual interest rate of six and
one-half percent (6.5%) per annum.

                  "LETTER OF CREDIT" shall have the meaning specified in Section
9.2.

                  "NONCONTRACTUAL DAMAGES" shall have the meaning specified in
Section 11.1.

                  "OPTION PREMIUM" means the sum of $20 million previously paid
by or on behalf of the Reinsured to the Reinsurer under an option agreement
relating to the reinsurance cover provided under this Agreement.

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                  "POOLS AND ASSOCIATIONS" means the pools and associations
listed in Schedule 1.

                  "PRIME RATE" shall be determined for each business day in New
York City, and for non-business days shall equal the Prime Rate as determined
for the most recent preceding business day. The Prime Rate as published in THE
WALL STREET JOURNAL (Eastern Edition) shall be the primary source for the Prime
Rate. If THE WALL STREET JOURNAL does not publish such a rate for a business
day, the Prime Rate shall be the maximum of the rates publicly announced by
major banks in New York City as their Prime Rates applicable to such day.

                  "REINSURANCE PREMIUM" shall have the meaning specified in
Section 4.2.

                  "REINSURED CONTRACTS" means all policies of insurance issued
by the Reinsured or any of the CGU Insurers covering or pertaining to Business
Covered.

                  "REINSURED RISKS" shall have the meaning specified in Section
2.1.

                  "SAP" means statutory accounting practices prescribed or
permitted by the Commissioner of Insurance of the State of Pennsylvania.

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                  "TOTAL CEDED RESERVES" means the lesser of (i) the gross
reserves of the Reinsured (including reserves for losses incurred but not
reported) calculated in accordance with SAP with respect to Ultimate Net Loss,
less an amount equal to reinsurance ceded with respect to Ultimate Net Loss
pursuant to the Ceded Reinsurance Agreements; and (ii) the remaining Aggregate
Limit.

                  "TRUST ACCOUNT" shall have the meaning specified in Section
9.3.

                  "TRUST AGREEMENT" shall have the meaning specified in Section
9.3.

                  "TRUSTEE" shall have the meaning specified in Section 9.3.

                  "ULTIMATE NET LOSS" shall have the meaning specified in
Section 2.3.

                                   ARTICLE II

                                    COVERAGE

                  2.1. COVERAGE. Effective as of 12:01 a.m., Eastern Standard
Time, on January 1, 2000 (the "Inception Date"), the Reinsured agrees to
reinsure with the Reinsurer, and the Reinsurer agrees to indemnify the Reinsured
for, all

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Ultimate Net Loss incurred by the Reinsured and paid or payable on or after the
Inception Date (the "Reinsured Risks"). The Reinsurer's limit of liability under
this Agreement with respect to Ultimate Net Loss (the "Aggregate Limit") shall,
notwithstanding any other provisions of this Agreement to the contrary, be the
sum of $2.5 billion. UNDER NO CIRCUMSTANCES, HOWSOEVER ARISING, SHALL REINSURER
BE LIABLE FOR ANY AMOUNT OF ULTIMATE NET LOSS GREATER THAN $2.5 BILLION BY
REASON OF ENTERING INTO THIS AGREEMENT.

                  2.2. CONDITIONS. No material changes made on or after the date
hereof in the terms and conditions of the Reinsured Contracts shall be covered
hereunder without the prior approval of such changes by the Reinsurer, which
shall not be unreasonably withheld or delayed. In the event material changes are
made in any Reinsured Contract without the prior approval of the Reinsurer, this
Agreement will cover Ultimate Net Loss arising from such Reinsured Contract as
if the non-approved changes had not been made. No Reinsured Contract that is an
agreement of assumed reinsurance shall be commuted by the Reinsured or any CGU
Insurer without the prior approval of the Reinsurer, which approval shall not be
unreasonably withheld or delayed.

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                  2.3. ULTIMATE NET LOSS. (a) (a) "Ultimate Net Loss" shall mean
(i) the actual amount paid by the Reinsured or any CGU Insurer on its net
retained liability with respect to the Business Covered (including, with respect
to contracts of assumed reinsurance included as Business Covered, all amounts
paid by the Reinsured or any CGU Insurer to cedents, whether for losses, loss
adjustment expenses or otherwise) after making deductions for all salvage,
subrogation and reinsurance recoverables under the Ceded Reinsurance Agreements,
to the extent actually collected and due the Reinsurer pursuant to Article XII
plus (ii) Allocated Loss Adjustment Expenses paid by the Reinsured or any CGU
Insurer. Ultimate Net Loss shall include Declaratory Judgment Expense and
Noncontractual Damages, but shall exclude all unallocated loss adjustment
expenses incurred pursuant to the Administrative Services Agreement.

                  (b) All recoveries or payments received by the Reinsured
subsequent to a loss settlement under this Agreement shall be applied as if
recovered or received prior to the aforesaid settlement and all necessary
adjustments shall be made by the parties hereto, including an adjustment to the
remaining Aggregate Limit, PROVIDED, that nothing in this Section 2.3(b) shall
be construed to mean that losses under this Agreement are not recoverable until
the Reinsured's loss has been ascertained.

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                  2.4. TERRITORY. The territorial limits of this Agreement shall
be identical with those of the Reinsured Policies.

                                  ARTICLE III

                               GENERAL PROVISIONS

                  3.1. INSPECTION. The Reinsurer or its designated
representative may inspect, at the offices of the Reinsured (or any cedent under
the CGU Reinsurance Agreement) where such records are located, the papers and
any and all other books or documents of the Reinsured (or any cedent under the
CGU Reinsurance Agreement) reasonably relating to the Reinsured Contracts,
during normal business hours for such period as this Agreement is in effect or
for as long thereafter as the Reinsured seeks performance by the Reinsurer
pursuant to the terms of this Agreement. The information obtained shall be used
only for purposes relating to this Agreement.

                  3.2. MISUNDERSTANDINGS AND OVERSIGHTS. If any delay, omission,
error or failure to pay amounts due or to perform any other act required by this
Agreement is unintentional and caused by misunderstanding or oversight, the
Reinsured and the Reinsurer will adjust the situation to what it would have been
had the misunderstanding or oversight not occurred. The party

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first discovering such misunderstanding or oversight, or an act resulting from
such misunderstanding or oversight, will notify the other party in writing
promptly upon discovery thereof, and the parties shall act to correct such
misunderstanding or oversight within twenty (20) Business Days of such other
party's receipt of such notice. However, this Section shall not be construed as
a waiver by either party of its right to enforce strictly the terms of this
Agreement.

                  3.3. SET-OFF. Any debts or credits, matured or unmatured,
liquidated or unliquidated, regardless of when they arose or were incurred, in
favor of or against either of the Reinsured or the Reinsurer with respect to
this Agreement are deemed mutual debts or credits, as the case may be, and shall
be set-off, and only the net balance shall be allowed or paid.

                  3.4. PAYMENTS. Except as otherwise set forth in Section
9.3(f), all payments between the parties, made pursuant to this Agreement shall
be made by wire transfer of immediately available non-reversible United States
Federal Funds to such bank account or accounts as designated by the recipient.

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                                   ARTICLE IV

                               REINSURANCE PREMIUM

                  4.1. INITIAL REINSURANCE PREMIUM. The Reinsured shall pay to
the Reinsurer on or before the Effective Date the sum of $1,230 million (being a
total premium of $1,250 million less the Option Premium), as adjusted through
December 31, 2000 in the manner set forth on Schedule 2 hereto (the "Initial
Reinsurance Premium"). In addition, the Reinsured hereby assigns to the
Reinsurer the salvage and subrogation amounts under Section 12.1 and the
reinsurance recoverable amounts under Section 12.2.

                  4.2. PREMIUM ADJUSTMENT. On or before the last day of the
first full month following the Effective Date, the Initial Reinsurance Premium
shall be adjusted through the Effective Date in the manner set forth on Schedule
2 hereto. The Initial Reinsurance Premium, as so adjusted shall be referred to
herein as the "Reinsurance Premium". In the event that the Reinsurance Premium
exceeds the Initial Reinsurance Premium, the Reinsured shall pay an amount equal
to such excess amount to the Reinsurer within 10 days following the
determination of the Reinsurance Premium by the parties, together with interest
from the date of payment of the Initial Reinsurance Premium to the date of
payment of such excess amount at the prevailing rate of U.S. 30 day Treasury
securities. In the event that the Initial

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Reinsurance Premium exceeds the Reinsurance Premium, the Reinsurer shall pay an
amount equal to such excess amount to the Reinsured within 10 days following the
determination of the Reinsurance Premium by the parties, together with interest
from the date of payment of the Initial Reinsurance Premium to the date of
payment of such excess amount at the prevailing rate of U.S. 30 day Treasury
securities.

                                   ARTICLE V

                             ADMINISTRATION; CHANGES

                  5.1. ADMINISTRATION. Pursuant to the Administrative Services
Agreement, the Reinsured and the CGU Insurers appoint the Reinsurer to perform
all administrative services with respect to the Reinsured Contracts until the
date of termination of this Agreement (or the date of termination of the
Administration Services Agreement, if earlier) and the Reinsurer agrees to
perform such services on behalf of the Reinsured and such CGU Insurers at its
sole expense, including, but not limited to, the direct payment of all Ultimate
Net Loss and the administration of claims. The Reinsurer shall provide such
services utilizing its employees or utilizing the employees of affiliates of the
Reinsured pursuant to a separate agreement between the Reinsurer and such
affiliates of the Reinsured.

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                  5.2. RESERVE ASSUMPTION CHANGES. The Reinsured shall not, on
its own initiative, change the methods used by the Reinsured to establish Total
Ceded Reserves. The Reinsurer shall share proportionately in any changes in the
methods used to establish the Total Ceded Reserves required by law or applicable
regulation. Nothing contained herein shall be construed to require the Reinsurer
to adopt the Reinsured's reserving methodologies, or vice versa. Each party
shall establish its reserves in respect of the liabilities reinsured hereunder.

                                   ARTICLE VI

                     DURATION AND TERMINATION AND RECAPTURE

                  6.1. DURATION. Except as otherwise provided herein, this
Agreement shall be unlimited in duration.

                  6.2. REINSURER'S LIABILITY. The Reinsurer's liability with
respect to Ultimate Net Loss will terminate on the earlier of: (i) the date the
Reinsured's liability with respect to the Reinsured Risks are terminated and all
amounts due the Reinsured under this Agreement with respect to such Reinsured
Risks are paid or (ii) the date on which the Reinsurer has paid to the Reinsured
an amount of Ultimate Net Loss equal to the Aggregate Limit.

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                                   ARTICLE VII

                                   ACCOUNTING

                  7.1. Pursuant to and in accordance with the terms of the
Administrative Services Agreement, the Reinsurer will provide to the Reinsured
accounting and settlement reports as to the Reinsured Contracts.

                                  ARTICLE VIII

                                   INSOLVENCY

                  8.1. PAYMENTS. In the event of the insolvency of the
Reinsured, all payments due the Reinsured under this Agreement shall be payable
by the Reinsurer directly to the Reinsured or to its liquidator, receiver,
conservator or statutory successor on the basis of the liability of the
Reinsured under the policy or policies reinsured, without diminution,
acceleration or enlargement because of the insolvency of the Reinsured. It is
agreed and understood, however, (i) that in the event of the insolvency of the
Reinsured the Reinsurer shall be given written notice of the pendency of a claim
against the Reinsured on a Reinsured Policy within a reasonable time after such
claim is filed in the insolvency proceeding and (ii) that during the pendency of
such claim the Reinsurer may investigate such claim and interpose, at its own
expense, in the proceeding where such

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claim is to be adjudicated any defenses which it may deem available to the
Reinsured or its liquidator, receiver conservator or statutory successor.

                  8.2. EXPENSES. It is further understood that any expense thus
incurred by the Reinsurer pursuant to Section 8.1 shall be chargeable, subject
to court approval, against the Reinsured as part of the expense of liquidation
to the extent of a proportionate share of the benefit which may accrue to the
Reinsured solely as a result of the defense undertaken by the Reinsurer. Where
two or more assuming reinsurers are involved in the same claim and a majority in
interest elect to interpose defenses to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the Reinsured.

                                   ARTICLE IX

                                     FUNDING

                  9.1. RESERVES. In the event that, and for so long as, (a) A.M.
Best Company reduces its rating of the Reinsurer to A or lower, and Standard &
Poor's Corporation reduces its rating of the Reinsurer to AA or lower or (b)
either A.M. Best Company or Standard & Poor's Corporation lowers its rating as
aforesaid

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and the other does not issue a rating, or (c) any event occurs that would cause
the reinsurance provided hereunder by the Reinsurer to fail to qualify for
statutory statement credit from any state of the United States, the District of
Columbia or (if it becomes relevant) the United States in which the Reinsured
must file a statutory statement of financial condition, the parties agree that,
when the Reinsured establishes Total Ceded Reserves with respect to the Business
Covered, the Reinsurer shall (A) place assets in trust in an amount sufficient
to satisfy the Total Ceded Reserves; or (B) provide a clean, unconditional
annually renewable letter of credit from banks, and having terms, reasonably
satisfactory to the Reinsured, in an amount sufficient to satisfy the Total
Ceded Reserves. This obligation to provide security shall continue only for so
long as, and only to the extent, required by the criteria set forth above. The
Reinsured agrees that in the event that the condition giving rise to the
establishment of a trust account or letter of credit, as the case may be, ceases
to exist, the Reinsured will provide its approval for the termination of the
trust or letter of credit and for the return of all assets or collateral to the
Reinsurer. In addition, to the extent that the obligations of the Reinsurer to
provide such security diminish, the Reinsured shall provide its approval for the
reduction of such trust account or letter of credit.

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                  9.2. LETTER OF CREDIT. (a) (a) In the event that the Reinsurer
elects to provide a letter of credit as set forth in Section 9.1 (the "Letter of
Credit"), the Reinsured and the Reinsurer agree that the Letter of Credit
provided by the Reinsurer under this provision may be drawn upon at any time,
notwithstanding any other provisions in this Agreement, and be utilized by the
Reinsured or any successor by operation of law of the Reinsured, including,
without limitation, any liquidator, rehabilitator, receiver or conservator of
the Reinsured for the following purposes:

                        (i) to reimburse the Reinsured for the Reinsurer's share
                  of benefits and losses paid by the Reinsured with respect to
                  the Business Covered;

                        (ii) to fund an account specifically established by the
                  Reinsured to cover loss exposures of the Reinsured in an
                  amount at least equal to the deduction, for reinsurance ceded,
                  from the Reinsured's liabilities ceded under this Agreement.
                  Such amount shall include, but not be limited to, amounts for
                  policy reserves and reserves for claims and losses incurred
                  (including losses incurred but not reported); and

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                        (iii) to pay any other amounts, consistent with the
                  terms of this Agreement, which the Reinsured has calculated to
                  be due to it.

                  (b) In the event the Reinsured draws upon the Letter of Credit
for the purposes set forth in Section 9.2(a)(i) or (ii) in excess of amounts
required to meet the Reinsurer's obligations to the Reinsured, or in excess of
amounts determined pursuant to a final accounting between the Reinsured and the
Reinsurer to be due under Section 9.2(a)(iii), the Reinsured will return such
excess to the Reinsurer, plus interest at the average Prime Rate of interest
applicable to the period during which the amounts were held pursuant to Section
9.1(a)(ii).

                  (c) All of the foregoing shall be applied without diminution
because of insolvency on the part of the Reinsured or the Reinsurer.

                  (d) The designated bank shall have no responsibility
whatsoever in connection with the propriety of withdrawals made by the Reinsured
or the disposition of funds withdrawn, except to see that withdrawals are made
upon the order of the properly authorized representatives of the Reinsured.

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<PAGE>

                  (e) The Reinsurer shall be liable for all bank charges
incurred with respect to issuing and providing the Letter of Credit.

                  9.3. TRUST ACCOUNT. (a) (a) In the event that the Reinsurer
elects to place assets in trust as set forth in Section 9.1, the Reinsurer shall
enter into a trust agreement (the "Trust Agreement") and establish a trust
account (the "Trust Account") for the benefit of the Reinsured with respect to
the Reinsured Risks with a bank (the "Trustee") and in a form reasonably
acceptable to the Reinsured.

                  (b) The Reinsurer agrees to deposit, and maintain in the Trust
Account, assets to be held in trust by the Trustee for the benefit of the
Reinsured as security for the payment of the Reinsurer's obligations to the
Reinsured under this Agreement.

                  (c) The Reinsurer agrees that the assets so deposited shall be
valued according to their current fair market value and shall consist only of
cash (United States legal tender), certificates of deposit (issued by a United
States bank and payable in United States legal tender), and other admitted
assets of a character, maturity, and value to fulfill the intent of this
Agreement, provided that such investments are issued by an institution that is
not the parent, subsidiary or affiliate

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of either the Reinsured or the Reinsurer and provided further that such assets
are of the type listed by the Securities Valuation Office of the National
Association of Insurance Commissioners and specified under Regulation 114 of the
New York Insurance Department. All payments of interest on, and dividends
actually received by the Trustee in respect of, assets in the Trust Account
shall be deposited by the Trustee in a separate income account established and
maintained by the Reinsurer at an office of the Trustee, and the Reinsurer shall
have the right to withdraw funds from such income account at any time.

                  (d) The Reinsurer, prior to depositing assets with the
Trustee, shall execute all assignments and endorsements in blank, or transfer
legal title to the Trustee of all shares, obligations or any other assets
requiring assignments, in order that the Reinsured, or the Trustee upon
direction of the Reinsured, may whenever necessary negotiate any such assets
without consent or signature from the Reinsurer or any other entity.

                  (e) All settlements of account under the Trust Agreement
between the Reinsured and the Reinsurer shall be made in cash or its equivalent.

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                  (f) The Reinsurer and the Reinsured agree that the assets in
the Trust Account may be withdrawn by the Reinsured at any time, notwithstanding
any other provisions in this Agreement, provided such assets are applied and
utilized by the Reinsured (or any successor of the Reinsured by operation of
law, including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Reinsured), on the basis of the liability of the Reinsured
under the Reinsured Contracts, without diminution because of the insolvency of
the Reinsured or the Reinsurer, only for the following purposes:

                        (i) to reimburse the Reinsured for the Reinsurer's share
                  of policy benefits or losses paid by the Reinsured or any CGU
                  Insurer with respect to the Business Covered;

                        (ii) to fund an account specifically established by the
                  Reinsured to cover loss exposures of the Reinsured or any CGU
                  Insurer in an amount at least equal to the deduction, for
                  reinsurance ceded, from the Reinsured's liabilities ceded
                  under this Agreement. Such amount shall include, but not be
                  limited to, amounts for policy reserves and claims and losses
                  incurred (including losses incurred but not reported); and

                                      -26-

<PAGE>

                        (iii) to pay any other amounts, consistent with the
                  terms of this Agreement, which the Reinsured or any CGU
                  Insurer has calculated to be due to it.

                  (g) In the event that the Reinsured or any CGU Insurer
withdraws assets from the Trust Account for the purposes set forth in Section
9.3(f)(i) or (ii) above in excess of actual amounts required to meet the
Reinsurer's obligations to the Reinsured, or in excess of amounts determined
pursuant to a final accounting between the Reinsured and the Reinsurer to be due
under Section 9.3(f)(iii) above, the Reinsured will return such excess to the
Reinsurer, plus interest at the average Prime Rate of interest applicable to the
period during which the amounts were held pursuant to Section 9.3(f)(ii) above.

                  (h) The Reinsurer shall be liable for all bank charges
incurred with respect to the Trust Account.

                                    ARTICLE X

                                   ARBITRATION

                  10.1. RESOLUTION OF DAMAGES. As a condition precedent to any
right arising under this Agreement, any dispute between the Reinsured and the
Reinsurer arising out of the provisions of this Agreement, or concerning its
interpretation or validity, whether arising before or after termination of this

                                      -27-

<PAGE>

Agreement, shall be submitted to arbitration in the manner set forth in this
Article X. The Reinsured or the Reinsurer may initiate arbitration of any such
dispute by giving written notice to the other party by registered or certified
mail, return receipt requested, of its intention to arbitrate and of its
appointment of an arbitrator in accordance with Section 10.3.

                  10.2. COMPOSITION OF PANEL. Unless the parties agree upon a
single arbitrator within fifteen (15) days after the receipt of notice of
intention to arbitrate, all disputes shall be submitted to an arbitration panel
composed of two arbitrators and an umpire, chosen in accordance with Sections
10.3 and 10.4.

                  10.3. APPOINTMENT OF ARBITRATORS. The members of the
arbitration panel shall be chosen from persons knowledgeable in the insurance
and reinsurance business. The party requesting arbitration (hereinafter referred
to as the "claimant") shall appoint an arbitrator and give written notice
thereof, by registered or certified mail, return receipt requested, to the other
party (hereinafter referred to as the "respondent") together with its notice of
intention to arbitrate. Unless a single arbitrator is agreed upon within fifteen
(15) days after the receipt of the notice or intention to arbitrate, the

                                      -28-

<PAGE>

respondent shall, within thirty (30) days after receiving such notice, also
appoint an arbitrator and notify the claimant thereof in a like manner. Before
instituting a hearing, the two arbitrators so appointed shall choose an umpire.
If, within twenty (20) days after they are both appointed, the arbitrators fail
to agree upon the appointment of an umpire, the umpire shall be appointed by the
President of the American Arbitration Association.

                  10.4. FAILURE OF A PARTY TO APPOINT ARBITRATOR. If the
respondent fails to appoint an arbitrator within thirty (30) days after
receiving a notice of intention to arbitrate, such arbitrator shall be appointed
by the President of the American Arbitration Association, and shall then,
together with the arbitrator appointed by the claimant, choose an umpire as
provided in Section 10.3.

                  10.5. CHOICE OF FORUM. Any arbitration instituted pursuant to
this Article X shall be held in New York, New York.

                  10.6. SUBMISSION OF DISPUTE TO PANEL. Unless otherwise
extended by the arbitration panel, or agreed to by the parties, each party shall
submit its case to the panel within thirty (30) days after the selection of an
umpire.

                                      -29-

<PAGE>

                  10.7. PROCEDURE GOVERNING ARBITRATION. All proceedings before
the panel shall be informal and the panel shall not be bound by the formal rules
of evidence. The panel shall have the power to fix all procedural rules relating
to the arbitration proceeding. In reaching any decision, the panel shall give
due consideration to the custom and usage of the insurance and reinsurance
business and the mutual intention of the parties as reflected in this Agreement.

                  10.8. ARBITRATION AWARD. The arbitration panel shall render
its decision within sixty (60) days after termination of the proceeding, which
decision shall be in writing. The decision of the majority of the panel shall be
final and binding on the parties to the proceeding.

                  10.9. COST OF ARBITRATION. Unless otherwise allocated by the
panel, each party shall bear the expense of its own arbitrator and its own
witnesses and shall jointly and equally bear with the other party the expense of
the umpire and the arbitration.

                  10.10. LIMIT OF JURISDICTION. The arbitration panel shall not
have jurisdiction to authorize any punitive damage awards between the parties.

                                      -30-

<PAGE>

                                   ARTICLE XI

                            NONCONTRACTUAL COVERAGES

                  11.1. NONCONTRACTUAL DAMAGES. This Agreement shall cover
Noncontractual Damages. "Noncontractual Damages" as used herein shall mean those
liabilities for which the Reinsured or any CGU Insurer is legally liable arising
from actual or alleged misconduct of the Reinsured, any CGU Insurer or any of
their affiliates, or their agents, brokers, or representatives (other than the
Reinsurer acting on behalf of the Reinsured pursuant to the Administrative
Services Agreement, which liability shall be indemnified pursuant to such
Agreement) in their handling of claims or losses, or in any of their dealings
with their insureds or any other person. Such liabilities shall include, but are
not limited to, punitive, exemplary, compensatory, and consequential damages.
Such misconduct shall include, but is not limited to, failure to settle within
the policy limit, negligence, fraud or bad faith in rejecting an offer of
settlement or in the preparation of the defense, or in the trial of any action
or in the preparation or prosecution of any appeal consequent upon any action.
Noncontractual Damages shall also include, and this Agreement shall cover, any
and all amounts otherwise included in the definition of Ultimate Net Loss that
the Reinsured actually pays or is obligated to pay to

                                      -31-

<PAGE>

ceding companies under Business Covered that are agreements of assumed
reinsurance, whether under the terms of such reinsurance contracts or as a
result of agreements between the Reinsured and cedents as to the settlement of
specific claims.

                  11.2. UNDERLYING EXCLUSION. This Agreement shall cover losses
for which the Reinsured or any CGU Insurer is liable because (i) a judicial
entity, having legal jurisdiction, invalidates any exclusion under an insurance
policy or reinsurance contract, or (ii) the issuer of such insurance policy or
reinsurance contract settles or pays, in good faith, a Reinsured Risk to which
any such exclusion might provide a defense, PROVIDED, HOWEVER, that the amount
of any such loss shall be subject to the other terms, conditions and exclusions
of this Agreement.

                                  ARTICLE XII

              SALVAGE, SUBROGATION AND CEDED REINSURANCE AGREEMENTS

                  12.1. SALVAGE AND SUBROGATION. The Reinsurer shall be
subrogated as respects any Ultimate Net Loss for which the Reinsurer shall
actually pay, or become liable to pay, on or after the Inception Date, but only
to the extent of the amount of payment by, or the amount of liability of, the
Reinsurer, to all rights of the Reinsured against any person or other entity

                                      -32-
<PAGE>

who may be legally responsible in damages for such Ultimate Net Loss. In
addition, the Reinsured hereby assigns, transfers and conveys to the Reinsurer
any and all rights of the Reinsured or any CGU Insurer to salvage and
subrogation on the Business Covered which was paid prior to the Inception Date
(other than salvage and subrogation with respect to the BROTHER JONATHAN loss,
PROVIDED that the Reinsurer shall have no obligation to pay any costs of
recovery thereof). The rights of the Reinsurer and the obligations of the
Reinsured under this Section 12.1 shall terminate at such time as the Reinsurer
shall have paid to the Reinsured under this Agreement an amount of Ultimate Net
Loss equal to the Aggregate Limit.

                  12.2. CEDED REINSURANCE AGREEMENTS. Effective as of the
Inception Date, the Reinsured hereby assigns, transfers and conveys to the
Reinsurer all reinsurance recoverables payable under the Ceded Reinsurance
Agreements, including amounts due from reinsurers for losses or loss adjustment
expenses on the Business Covered which were paid prior to the Inception Date;
provided, however, that the foregoing assignment shall be null and void
immediately upon (i) the filing of any petition or initiation of any proceeding
for the supervision, rehabilitation, conservation, or liquidation of the
Reinsurer or other proceedings for the protection of the Reinsurer's

                                      -33-

<PAGE>

creditors, which petition or proceedings shall have resulted in a finding by a
court or insurance regulator of competent jurisdiction of the insolvency of the
Reinsurer or (ii) at such time as the Reinsurer shall have paid to the Reinsured
under this Agreement an amount of Ultimate Net Loss equal to the Aggregate
Limit. The parties agree that neither the Reinsurer nor the Reinsured shall have
the right during the term of this Agreement to commute any of the Ceded
Reinsurance Agreements without the prior written consent of the other party.

                  12.3. COLLECTION. The Reinsured shall, if reasonably requested
by the Reinsurer, aid the Reinsurer, at the Reinsurer's expense, in collection
of all amounts due in respect of the Reinsured Risks from reinsurers. The
collectibility of such reinsurance shall be the ultimate responsibility of the
Reinsurer and shall be at the risk and for the account of the Reinsurer in the
event such reinsurance is not collected until such time as Reinsurer shall have
paid to the Reinsured under this Agreement an amount of Ultimate Net Loss equal
to the Aggregate Limit.

                  12.4. EXPENSES. In determining the amount of salvage,
subrogation or reinsurance recoverables, there shall first be deducted from any
amount recovered the expenses incurred in effecting the recovery (including,
without

                                      -34-

<PAGE>

limitation, all court, arbitration, mediation or other dispute resolution costs,
attorneys' fees and expenses but excluding overhead, salaries and expenses of
officers and employees of the Reinsured and similar internal costs), except to
the extent otherwise paid or reimbursed by the Reinsurer hereunder.

                  12.5. ACTUAL RECEIPT. The Reinsured shall not be obligated to
credit the Reinsurer for salvage, subrogation or reinsurance recoverables until
such time as the Reinsured receives actual payment of such amounts in cash or
other assets.

                                  ARTICLE XIII

                                   WARRANTIES

                  13.1. Other than the contemplated acquisition of the Reinsured
which has been disclosed to Reinsurer, the Reinsured warrants and represents
that it shall not voluntarily undertake any change in its corporate structure
which would have a materially adverse impact upon the Reinsurer without the
prior consent of the Reinsurer, which shall not be unreasonably withheld or
delayed. The Reinsured further warrants and represents that it shall not change
its domicile, or the domicile of any affiliate reinsured hereunder, outside the
United States without the prior consent of the Reinsurer, which shall not be
unreasonably withheld or delayed.

                                      -35-

<PAGE>

                  13.2. The Reinsured warrants and represents that the direct
PIP claims set forth in Schedule 3 to this Agreement contains all direct PIP
claims known to Reinsured as of the date of this Agreement.

                  13.3. The Reinsured warrants and represents that to the best
of its knowledge and belief no material information relating to risks reinsured
hereunder has been intentionally withheld from the Reinsurer.

                  13.4. The Reinsured warrants and represents that in the event
that the Reinsured purchases any additional reinsurance as respects the Business
Covered, the Reinsurer shall have a first right to sell such reinsurance to the
Reinsured. The Reinsured shall notify the Reinsurer that it intends to purchase
such reinsurance. It shall also notify the Reinsurer of the terms of such
additional reinsurance as offered in binding format by an appropriately licensed
non-affiliated reinsurer rated AAA by Standard & Poor's Corporation and Moody's.
The Reinsurer shall have thirty (30) days to make a binding offer to the
Reinsured to provide reinsurance to the Reinsured on the same terms and
conditions as those offered by the non-affiliated reinsurer.

                                      -36-

<PAGE>

                                  ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

                  14.1. HEADINGS AND SCHEDULES. Headings used herein are not a
part of this Agreement and shall not affect the terms hereof. The attached
Schedules are a part of this Agreement.

                  14.2. NOTICES. All notices and communications hereunder shall
be in writing and shall become effective when received. Any written notice shall
be by either certified or registered mail, return receipt requested, or
overnight delivery service (providing for delivery receipt) or delivered by
hand. All notices or communications under this Agreement shall be addressed as
follows:

                  If to the Reinsured:
                  c/o CGU Corporation
                  One Beacon Street
                  Boston, MA  02108
                  Attention: General Counsel

                  If to the Reinsurer:
                  c/o Berkshire Hathaway Group
                  Reinsurance Division
                  100 First Stamford Plaza
                  Stamford, CT  06902
                  Attention: General Counsel

or in each case at such other address as either party shall
provide to the other as provided in this Section 14.2.

                                      -37-

<PAGE>

                  14.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. Neither this Agreement, nor any
right hereunder, may be assigned by either party without the prior written
consent of the other party hereto.

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

                  14.5. CURRENCY. Whenever the word "Dollars" or the "$" sign
appears in this Agreement, they shall be construed to mean United States
Dollars, and all transactions under this Agreement shall be in United States
Dollars.

                  14.6. AMENDMENTS. This Agreement may not be changed, altered
or modified unless the same shall be in writing executed by the Reinsured and
the Reinsurer.

                                      -38-

<PAGE>

                  14.7. GOVERNING LAW. This Agreement shall be interpreted and
governed by the laws of the State of New York without regard to its rules with
respect to conflicts of law.

                  14.8. INTEGRATION. This Agreement constitutes the entire
agreement between the parties hereto relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no general or specific warranties, representations or other agreements by or
among the parties in connection with the entering into of this Agreement or the
subject matter hereof, except as specifically set forth or contemplated herein.

                  14.9. NO WAIVER. No consent or waiver, express or implied, by
any party to or of any breach or default by any other party in the performance
by such other party of its obligations hereunder shall be deemed or construed to
be a consent or waiver to or of any other breach or default in the performance
of obligations hereunder by such other party hereunder. Failure on the part of
any party to complain of any act or failure to act of any other party or to
declare any other party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such first party of any of its
rights hereunder.

                                      -39-

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives.

                                    POTOMAC INSURANCE COMPANY

                                    By:
                                       -----------------------------------------
                                    Title:
                                          -----------------------------
                                    Date:
                                         ------------------------------

                                    NATIONAL INDEMNITY COMPANY

                                    By:
                                       -----------------------------------------
                                    Title:
                                          -----------------------------
                                    Date:
                                         ------------------------------

                                      -40-

<PAGE>

                                   SCHEDULE 2

                               REINSURANCE PREMIUM

Initial Reinsurance Premium                                   $1,230 million

  less:  Ultimate Net Loss Paid by the                           [     ]
         Reinsured on or after the
         Inception Date and prior to
         the Effective Date

  plus:  Recoverables received under                             [     ]
         the Ceded Reinsurance Agreements
         on or after the Inception Date
         and prior to the Effective Date

  plus:  Salvage and subrogation received                        [     ]
         on or after the Inception Date
         and prior to the Effective Date

  less:  Unallocated Loss Adjustment                             [     ]
         Expenses incurred or assumed by
         Reinsured on or after the
         Inception Date and prior to the
         Effective Date(1)

  plus:  Interest at a rate of 6.5% per annum                    [     ]
         calculated as set forth below(2)

Reinsurance Premium                                              [     ]
                                                                 =======

-------------------------
         (1)   calculated as follows [    ]

         (2)   calculated (i) as of the last day of each month ending after the
Inception Date and (ii) as of the Effective Date, based on the mean of the
Reinsurance Premium calculated on an interim basis in accordance with the above
formula as of the first day of the applicable month (or as of the Inception Date
with respect to the initial period), and the Reinsurance Premium so calculated
through the last day of such month (or as of the Effective Date with respect to
the final period).

                                      -41-<PAGE>

                                                               EXHIBIT 10.6.2.2

                                          EXECUTION COPY

                 AGGREGATE LOSS PORTFOLIO REINSURANCE AGREEMENT

                                     between

                              CGU INSURANCE COMPANY

                              Boston, Massachusetts

                                       and

                            POTOMAC INSURANCE COMPANY

                              Boston, Massachusetts

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>

Article I                  DEFINITIONS............................................................................2
Article II                 COVERAGE..............................................................................11
Article III                GENERAL PROVISIONS....................................................................13
Article IV                 REINSURANCE PREMIUM...................................................................15
Article V                  ADMINISTRATION; CHANGES...............................................................16
Article VI                 DURATION AND TERMINATION AND RECAPTURE................................................18
Article VII                ACCOUNTING............................................................................18
Article VIII               INSOLVENCY............................................................................19
Article IX                 [THIS ARTICLE INTENTIONALLY LEFT BLANK]..............................................20
Article X                  ARBITRATION...........................................................................20
Article XI                 NONCONTRACTUAL COVERAGES..............................................................23
Article XII                SALVAGE, SUBROGATION AND CEDED REINSURANCE AGREEMENTS.................................25
Article XIII               WARRANTIES............................................................................28
Article XIV                MISCELLANEOUS PROVISIONS..............................................................30
</TABLE>

                                    SCHEDULES

SCHEDULE 1        -        POOLS AND ASSOCIATIONS

SCHEDULE 2        -        REINSURANCE PREMIUM

SHCEDULE 3        -        EXCLUDED PIP LOSSES

                                      -i-

<PAGE>

                 AGGREGATE LOSS PORTFOLIO REINSURANCE AGREEMENT

                  This Agreement, dated as of March 19, 2001 (this "Agreement")
is made and entered into by and between CGU Insurance Company, a corporation
organized under the laws of Pennsylvania (hereinafter referred to as the
"Reinsured"), and Potomac Insurance Company, a corporation organized under the
laws of Pennsylvania (hereinafter referred to as the "Reinsurer") to be
effective as of the Effective Date (as defined below).

                  The Reinsured and the Reinsurer mutually agree to reinsure
under the terms and conditions stated herein. This Agreement is an indemnity
reinsurance agreement solely among the Reinsured and the Reinsurer, and the
performance of the obligations of each party under this Agreement shall be
rendered solely to the other party. In no instance, except as set forth in
Article VIII of this Agreement, shall anyone other than the Reinsured or the
Reinsurer have any rights under this Agreement.

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

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

                  "ADMINISTRATIVE SERVICES AGREEMENT" means the Administrative
Services Agreement entered into by and among the Reinsurer, Potomac and NICO.

                  "AGGREGATE LIMIT" shall have the meaning specified in Section
2.1.

                  "AGREEMENT" shall have the meaning specified in the Recitals.

                  "ALLOCATED LOSS ADJUSTMENT EXPENSES" means all court
arbitration, mediation or other dispute resolution costs, attorneys' fees,
expenses, fees and interest accrued prior to or after any judgment, award,
agreement or compromise (excluding any overhead, internal costs, staff costs and
similar internal costs) incurred in connection with any defense, settlement,
investigation or audit of or negotiations in relation to any Reinsured Risk.

                                      -2-
<PAGE>

                  "BUSINESS COVERED" means

         (a)      all losses from all perils on policies or contracts of
                  insurance or reinsurance issued by the Reinsured or any CGU
                  Insurer (or any predecessor thereof to which the Reinsured or
                  such CGU Insurer has succeeded by merger or otherwise) which
                  terminated on or before December 31, 1987 and, with respect to
                  policies or contracts of insurance or reinsurance issued by
                  the Reinsured or any CGU Insurer (or any predecessor thereof
                  to which the Reinsured or any CGU Insurer has succeeded by
                  merger or otherwise) on or before January 1, 1987 which
                  terminated after December 31, 1987, all losses from all perils
                  incurred before January 1, 1988;

         (b)      all asbestos related losses covered by policies or contracts
                  of insurance or reinsurance issued by the Reinsured or any CGU
                  Insurer (or any predecessor thereof to which the Reinsured or
                  any CGU Insurer has succeeded by merger or otherwise) which
                  terminated on or before December 31, 1992 and, with respect to
                  policies or contracts of insurance or reinsurance issued by
                  the Reinsured or any CGU Insurer (or any predecessor thereof
                  to which the Reinsured or any CGU

                                      -3-
<PAGE>

                  Insurer has succeeded by merger or otherwise) on or before
                  January 1, 1992 which terminated after December 31, 1992, all
                  asbestos-related losses covered by such policies or contracts
                  incurred before January 1, 1993;

         (c)      all lead-related losses on policies or contracts of insurance
                  or reinsurance issued by the Reinsured or any CGU Insurer (or
                  any predecessor thereof to which the Reinsured or any CGU
                  Insurer has succeeded by merger or otherwise) which terminated
                  on or before December 31, 1995 and, with respect to policies
                  or contracts of insurance or reinsurance issued by the
                  Reinsured or any CGU Insurer (or any predecessor thereof to
                  which the Reinsured or any CGU Insurer has succeeded by merger
                  or otherwise) on or before January 1, 1995 which terminated
                  after December 31, 1995, all lead-related losses incurred
                  before January 1, 1996; and

         (d)      all losses arising from the pools and associations listed in
                  Schedule 1 hereto;

                  in each case excluding (x) all workers' compensation("WC")
                  losses (except for coverage 1(b) claims that involve asbestos,
                  any WC in pools and

                                      -4-
<PAGE>

                  associations in Schedule 1 and any WC in other assumed
                  reinsurance business included in Business Covered) and (y) any
                  liability of the Reinsured or any CGU Insurer ceded to CGNU
                  plc or any majority-owned non-U.S. subsidiary thereof or
                  predecessor of such a subsidiary under any arrangement under
                  which the Reinsured or such CGU Insurer was acting as a
                  fronting insurer for such non-U.S. person. It is understood
                  that clauses (b), (c) and (d) above are in addition to and do
                  not limit clause (a) above.

                  "BUSINESS DAY" means any day on which a United States national
banking association in the State of New York is open for regular business.

                  "CEDED REINSURANCE AGREEMENTS" means all agreements of
reinsurance other than this Agreement whereby the Reinsured or any CGU Insurer
has ceded liability with respect to the Business Covered.

                  "CGU INSURERS" means all property and casualty companies a
majority of the stock of which is owned directly or indirectly by CGU
Corporation, including CU Lloyd's of Texas but excluding Houston General
Insurance Company, Traders & General

                                      -5-
<PAGE>

Insurance Company, Traders & Pacific Insurance Company and Houston General
Lloyds.

                  "CGU REINSURANCE AGREEMENTS" means all pooling and other
reinsurance agreements entered into between other CGU Insurers and the Reinsured
whereby business covered under the definition of Business Covered hereunder
which was written by members of the CGU intercompany pool or certain other
affiliates of the Reinsured was assumed by the Reinsured.

                  "DECLARATORY JUDGMENT EXPENSE" means all attorneys' fees,
expenses and other litigation costs attributable to coverage analysis or
declaratory judgment actions or other coverage dispute resolution procedures
brought to determine defense and/or indemnification or payment obligations for
any Reinsured Risk, whether or not a loss has been paid.

                  "EFFECTIVE DATE" means the earlier of (i) the Closing Date
under the Stock Purchase Agreement dated as of September 24, 2000, as amended,
by and among CGNU plc, White Mountains Insurance Group, Ltd. and others and (ii)
July 1, 2001.

                  "EXCLUDED LIABILITY" means the following:

         (a)      any sum paid or booked as paid prior to the Inception Date in
                  settlement or payment of any obligation arising from Business
                  Covered, including any such sums

                                      -6-
<PAGE>

                  for loss, Allocated Loss Adjustment Expense, Declaratory
                  Judgment Expense or Noncontractual Damages;

         (b)      any liabilities for losses incurred (i) due to fraud by a
                  member of the Board of Directors or a corporate officer of the
                  Reinsured (or any directors or officers of the CGU Insurers)
                  acting individually or collectively or in collusion with any
                  individual or corporation or any other organization or party
                  involved in the presentation, defense or settlement of any
                  Reinsured Risk or (ii) in respect of any tortious or bad faith
                  act of the Reinsured or any of the CGU Insurers in connection
                  with any insurance policies or reinsurance contracts not
                  reinsured hereunder;

         (c)      any liability of the Reinsured or any of the CGU Insurers with
                  respect to any tax or assessment, whether paid directly by the
                  Reinsured or billed to the Reinsured by or through a cedent or
                  insured, regardless of whether the tax is denominated as an
                  income tax, excise tax, premium tax, surplus lines tax, or any
                  other tax or assessment (excluding any pool or other
                  assessment for payment of losses or loss adjustment expenses,
                  including without limitation any governmental charge which in
                  the future is enacted in

                                      -7-
<PAGE>

                  replacement in whole or in part of any insurance or
                  reinsurance liability, all of which shall constitute Reinsured
                  Risks);

         (d)      any liability of the Reinsured or any CGU Insurer under any
                  insurance policy or reinsurance contract not constituting
                  Business Covered;

         (e)      subject to the provisions of Section 11.2, all coverage
                  excluded in the underlying insurance policies and reinsurance
                  contracts reinsured by this Agreement;

         (f)      any liability of the Reinsured or any CGU Insurer ceded to any
                  majority-owned non-U.S. subsidiary of CGNU plc or predecessor
                  of such a subsidiary under any arrangement under which the
                  Reinsured or such CGU Insurer was acting as a fronting insurer
                  for such non-U.S. person;

         (g)      Any policyholder dividends, return premiums and retrospective
                  or loss sensitive premiums (except reinstatement or adjustment
                  premiums (l) paid in connection with reinsurance inuring to
                  the benefit of the Reinsurer with respect to risks reinsured
                  hereunder or where the payment of such amounts benefits the
                  Reinsurer either by way of reduction in the net present value
                  of the liabilities of the Reinsurer with respect to risks
                  reinsured under this

                                       -8-

<PAGE>

                  Agreement or by increasing reinsurance recoverables or
                  coverage available to the Reinsurer hereunder in an amount
                  greater than the dividend or premium; or (2) where the
                  Reinsurer has given its prior approval to the payment of such
                  reinstatement premiums).

         (h)      all losses specifically listed on Schedule 3.

                  "INCEPTION DATE" shall have the meaning specified in Section
2.1.

                  "INITIAL REINSURANCE PREMIUM" shall have the meaning specified
in Section 4.1.

                  "INTEREST RATE" means an annual interest rate of six and
one-half percent (6.5%) per annum.

                  "NICO" means National Indemnity Company, a Nebraska insurance
company.

                  "NICO REINSURANCE AGREEMENT" means the reinsurance agreement
entered into between the Reinsurer and NICO whereby business covered under the
definition of Business Covered is assumed by NICO from the Reinsured.

                  "NONCONTRACTUAL DAMAGES" shall have the meaning specified in
Section 11.1.

                                      -9-

<PAGE>

                  "POOLS AND ASSOCIATIONS" means the pools and associations
listed in Schedule 1.

                  "PRIME RATE" shall be determined for each business day in New
York City, and for non-business days shall equal the Prime Rate as determined
for the most recent preceding business day. The Prime Rate as published in THE
WALL STREET JOURNAL (Eastern Edition) shall be the primary source for the Prime
Rate. If THE WALL STREET JOURNAL does not publish such a rate for a business
day, the Prime Rate shall be the maximum of the rates publicly announced by
major banks in New York City as their Prime Rates applicable to such day.

                  "REINSURANCE PREMIUM" shall have the meaning specified in
Section 4.2.

                  "REINSURED CONTRACTS" means all policies of insurance issued
by the Reinsured or any of the CGU Insurers covering or pertaining to Business
Covered.

                  "REINSURED RISKS" shall have the meaning specified in Section
2.1.

                  "SAP" means statutory accounting practices prescribed or
permitted by the Commissioner of Insurance of the State of Pennsylvania.

                                      -10-

<PAGE>

                  "TOTAL CEDED RESERVES" means the lesser of (i) the gross
reserves of the Reinsured (including reserves for losses incurred but not
reported) calculated in accordance with SAP with respect to Ultimate Net Loss,
less an amount equal to reinsurance ceded with respect to Ultimate Net Loss
pursuant to the Ceded Reinsurance Agreements; and (ii) the remaining Aggregate
Limit.

                  "ULTIMATE NET LOSS" shall have the meaning specified in
Section 2.3.

                                   ARTICLE II

                                    COVERAGE

                  2.1. COVERAGE. Effective as of 12:01 a.m., Eastern Standard
Time, on January 1, 2000 (the "Inception Date"), the Reinsured agrees to
reinsure with the Reinsurer, and the Reinsurer agrees to indemnify the Reinsured
for, all Ultimate Net Loss incurred by the Reinsured and paid or payable on or
after the Inception Date (the "Reinsured Risks"). The Reinsurer's limit of
liability under this Agreement with respect to Ultimate Net Loss (the "Aggregate
Limit") shall, notwithstanding any other provisions of this Agreement to the
contrary, be the sum of $2.5 billion. UNDER NO CIRCUMSTANCES, HOWSOEVER ARISING,
SHALL REINSURER BE LIABLE FOR ANY AMOUNT OF

                                      -11-
<PAGE>

ULTIMATE NET LOSS GREATER THAN $2.5 BILLION BY REASON OF ENTERING INTO THIS
AGREEMENT.

                  2.2. CONDITIONS. No material changes made on or after the date
hereof in the terms and conditions of the Reinsured Contracts shall be covered
hereunder without the prior approval of such changes by the Reinsurer, which
shall not be unreasonably withheld or delayed. In the event material changes are
made in any Reinsured Contract without the prior approval of the Reinsurer, this
Agreement will cover Ultimate Net Loss arising from such Reinsured Contract as
if the non-approved changes had not been made. No Reinsured Contract that is an
agreement of assumed reinsurance shall be commuted by the Reinsured or any CGU
Insurer without the prior approval of the Reinsurer, which approval shall not be
unreasonably withheld or delayed.

                  2.3. ULTIMATE NET LOSS. (a) (a) "Ultimate Net Loss" shall mean
(i) the actual amount paid by the Reinsured or any CGU Insurer on its net
retained liability with respect to the Business Covered (including, with respect
to contracts of assumed reinsurance included as Business Covered, all amounts
paid by the Reinsured or any CGU Insurer to cedents, whether for losses, loss
adjustment expenses or otherwise) after making deductions for all salvage,
subrogation and reinsurance

                                      -12-
<PAGE>

recoverables under the Ceded Reinsurance Agreements, to the extent actually
collected and due the Reinsurer pursuant to Article XII plus (ii) Allocated Loss
Adjustment Expenses paid by the Reinsured or any CGU Insurer. Ultimate Net Loss
shall include Declaratory Judgment Expense and Noncontractual Damages, but shall
exclude all unallocated loss adjustment expenses incurred pursuant to the
Administrative Services Agreement.

                  (b) All recoveries or payments received by the Reinsured
subsequent to a loss settlement under this Agreement shall be applied as if
recovered or received prior to the aforesaid settlement and all necessary
adjustments shall be made by the parties hereto, including an adjustment to the
remaining Aggregate Limit, PROVIDED, that nothing in this Section 2.3(b) shall
be construed to mean that losses under this Agreement are not recoverable until
the Reinsured's loss has been ascertained.

                  2.4. TERRITORY. The territorial limits of this Agreement shall
be identical with those of the Reinsured Policies.

                                   ARTICLE III

                               GENERAL PROVISIONS

                  3.1. INSPECTION. The Reinsurer or its designated
representative may inspect, at the offices of the Reinsured (or

                                      -13-
<PAGE>

any cedent under the CGU Reinsurance Agreements) where such records are located,
the papers and any and all other books or documents of the Reinsured (or any
cedent under the CGU Reinsurance Agreements) reasonably relating to the
Reinsured Contracts, during normal business hours for such period as this
Agreement is in effect or for as long thereafter as the Reinsured seeks
performance by the Reinsurer pursuant to the terms of this Agreement. The
information obtained shall be used only for purposes relating to this Agreement.

                  3.2. MISUNDERSTANDINGS AND OVERSIGHTS. If any delay, omission,
error or failure to pay amounts due or to perform any other act required by this
Agreement is unintentional and caused by misunderstanding or oversight, the
Reinsured and the Reinsurer will adjust the situation to what it would have been
had the misunderstanding or oversight not occurred. The party first discovering
such misunderstanding or oversight, or an act resulting from such
misunderstanding or oversight, will notify the other party in writing promptly
upon discovery thereof, and the parties shall act to correct such
misunderstanding or oversight within twenty (20) Business Days of such other
party's receipt of such notice. However, this Section shall not be construed as
a waiver by either party of its right to enforce strictly the terms of this
Agreement.

                                      -14-
<PAGE>

                  3.3. SET-OFF. Any debts or credits, matured or unmatured,
liquidated or unliquidated, regardless of when they arose or were incurred, in
favor of or against either of the Reinsured or the Reinsurer with respect to
this Agreement are deemed mutual debts or credits, as the case may be, and shall
be set-off, and only the net balance shall be allowed or paid.

                  3.4. PAYMENTS. All payments between the parties, made pursuant
to this Agreement shall be made by wire transfer of immediately available
non-reversible United States Federal Funds to such bank account or accounts as
designated by the recipient.

                                   ARTICLE IV

                               REINSURANCE PREMIUM

                  4.1. INITIAL REINSURANCE PREMIUM. The Reinsured shall pay to
the Reinsurer on or before the Effective Date the sum of $1,250 million, as
adjusted through December 31, 2000 in the manner set forth on Schedule 2 hereto
(the "Initial Reinsurance Premium"). In addition, the Reinsured hereby assigns
to the Reinsurer the salvage and subrogation amounts under Section 12.1 and the
reinsurance recoverable amounts under Section 12.2.

                  4.2. PREMIUM ADJUSTMENT. On or before the last day of the
first full month following the Effective Date, the Initial Reinsurance Premium
shall be adjusted through the Effective Date

                                      -15-
<PAGE>

in the manner set forth on Schedule 2 hereto. The Initial Reinsurance Premium,
as so adjusted shall be referred to herein as the "Reinsurance Premium". In the
event that the Reinsurance Premium exceeds the Initial Reinsurance Premium, the
Reinsured shall pay an amount equal to such excess amount to the Reinsurer
within 10 days following the determination of the Reinsurance Premium by the
parties, together with interest from the date of payment of the Initial
Reinsurance Premium to the date of payment of such excess amount at the
prevailing rate of U.S. 30 day Treasury securities. In the event that the
Initial Reinsurance Premium exceeds the Reinsurance Premium, the Reinsurer shall
pay an amount equal to such excess amount to the Reinsured within 10 days
following the determination of the Reinsurance Premium by the parties, together
with interest from the date of payment of the Initial Reinsurance Premium to the
date of payment of such excess amount at the prevailing rate of U.S. 30 day
Treasury securities.

                                   ARTICLE V

                             ADMINISTRATION; CHANGES

                  5.1. ADMINISTRATION. Pursuant to the NICO Reinsurance
Agreement and the Administrative Services Agreement, the Reinsurer, the
Reinsured and the CGU Insurers appoint NICO to perform all administrative
services with respect to the

                                      -16-

<PAGE>

Reinsured Contracts until the date of termination of the NICO Reinsurance
Agreement(or the date of termination of the Administration Services Agreement,
if earlier) and NICO agrees to perform such services on behalf of the Reinsurer,
the Reinsured and such CGU Insurers at its sole expense, including, but not
limited to, the direct payment of all Ultimate Net Loss and the administration
of claims. NICO has agreed to provide such services utilizing its employees or
utilizing the employees of affiliates of the Reinsurer pursuant to a separate
agreement between NICO and such affiliates of the Reinsurer.

                  5.2. RESERVE ASSUMPTION CHANGES. The Reinsured shall not, on
its own initiative, change the methods used by the Reinsured to establish Total
Ceded Reserves. The Reinsurer shall share proportionately in any changes in the
methods used to establish the Total Ceded Reserves required by law or applicable
regulation. Nothing contained herein shall be construed to require the Reinsurer
to adopt the Reinsured's reserving methodologies, or vice versa. Each party
shall establish its reserves in respect of the liabilities reinsured hereunder.

                                      -17-
<PAGE>

                                   ARTICLE VI
                     DURATION AND TERMINATION AND RECAPTURE

                  6.1. DURATION. Except as otherwise provided herein, this
Agreement shall be unlimited in duration.

                  6.2. REINSURER'S LIABILITY. The Reinsurer's liability with
respect to Ultimate Net Loss will terminate on the earlier of: (i) the date the
Reinsured's liability with respect to the Reinsured Risks are terminated and all
amounts due the Reinsured under this Agreement with respect to such Reinsured
Risks are paid or (ii) the date on which the Reinsurer has paid to the Reinsured
an amount of Ultimate Net Loss equal to the Aggregate Limit.

                                   ARTICLE VII

                                   ACCOUNTING

                  7.1. Pursuant to and in accordance with the terms of the
Administrative Services Agreement, NICO will provide to the Reinsurer and the
Reinsured accounting and settlement reports as to the Reinsured Contracts.

                                      -18-

<PAGE>

                                  ARTICLE VIII

                                   INSOLVENCY

                  8.1. PAYMENTS. In the event of the insolvency of the
Reinsured, all payments due the Reinsured under this Agreement shall be payable
by the Reinsurer directly to the Reinsured or to its liquidator, receiver,
conservator or statutory successor on the basis of the liability of the
Reinsured under the policy or policies reinsured, without diminution,
acceleration or enlargement because of the insolvency of the Reinsured. It is
agreed and understood, however, (i) that in the event of the insolvency of the
Reinsured the Reinsurer shall be given written notice of the pendency of a claim
against the Reinsured on a Reinsured Policy within a reasonable time after such
claim is filed in the insolvency proceeding and (ii) that 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
which it may deem available to the Reinsured or its liquidator, receiver
conservator or statutory successor.

                  8.2. EXPENSES. It is further understood that any expense thus
incurred by the Reinsurer pursuant to Section 8.1 shall be chargeable, subject
to court approval, against the Reinsured as part of the expense of liquidation
to the extent of

                                     -19-

<PAGE>

a proportionate share of the benefit which may accrue to the Reinsured solely as
a result of the defense undertaken by the Reinsurer. Where two or more assuming
reinsurers are involved in the same claim and a majority in interest elect to
interpose defenses to such claim, the expense shall be apportioned in accordance
with the terms of this Agreement as though such expense had been incurred by the
Reinsured.

                                   ARTICLE IX

                   [THIS ARTICLE IS INTENTIONALLY LEFT BLANK]

                                    ARTICLE X

                                   ARBITRATION

                  10.1. RESOLUTION OF DAMAGES. As a condition precedent to any
right arising under this Agreement, any dispute between the Reinsured and the
Reinsurer arising out of the provisions of this Agreement, or concerning its
interpretation or validity, whether arising before or after termination of this
Agreement, shall be submitted to arbitration in the manner set forth in this
Article X. The Reinsured or the Reinsurer may initiate arbitration of any such
dispute by giving written notice to the other party by registered or certified
mail, return receipt requested, of its intention to arbitrate and of

                                      -20-
<PAGE>

its appointment of an arbitrator in accordance with Section 10.3.

                  10.2. COMPOSITION OF PANEL. Unless the parties agree upon a
single arbitrator within fifteen (15) days after the receipt of notice of
intention to arbitrate, all disputes shall be submitted to an arbitration panel
composed of two arbitrators and an umpire, chosen in accordance with Sections
10.3 and 10.4.

                  10.3. APPOINTMENT OF ARBITRATORS. The members of the
arbitration panel shall be chosen from persons knowledgeable in the insurance
and reinsurance business. The party requesting arbitration (hereinafter referred
to as the "claimant") shall appoint an arbitrator and give written notice
thereof, by registered or certified mail, return receipt requested, to the other
party (hereinafter referred to as the "respondent") together with its notice of
intention to arbitrate. Unless a single arbitrator is agreed upon within fifteen
(15) days after the receipt of the notice or intention to arbitrate, the
respondent shall, within thirty (30) days after receiving such notice, also
appoint an arbitrator and notify the claimant thereof in a like manner. Before
instituting a hearing, the two arbitrators so appointed shall choose an umpire.
If, within twenty (20) days after they are both appointed, the arbitrators

                                      -21-
<PAGE>

fail to agree upon the appointment of an umpire, the umpire shall be appointed
by the President of the American Arbitration Association.

                  10.4. FAILURE OF A PARTY TO APPOINT ARBITRATOR. If the
respondent fails to appoint an arbitrator within thirty (30) days after
receiving a notice of intention to arbitrate, such arbitrator shall be appointed
by the President of the American Arbitration Association, and shall then,
together with the arbitrator appointed by the claimant, choose an umpire as
provided in Section 10.3.

                  10.5. CHOICE OF FORUM. Any arbitration instituted pursuant to
this Article X shall be held in New York, New York.

                  10.6. SUBMISSION OF DISPUTE TO PANEL. Unless otherwise
extended by the arbitration panel, or agreed to by the parties, each party shall
submit its case to the panel within thirty (30) days after the selection of an
umpire.

                  10.7. PROCEDURE GOVERNING ARBITRATION. All proceedings before
the panel shall be informal and the panel shall not be bound by the formal rules
of evidence. The panel shall have the power to fix all procedural rules relating
to the arbitration proceeding. In reaching any decision, the panel shall give
due consideration to the custom and usage of the

                                      -22-
<PAGE>

insurance and reinsurance business and the mutual intention of the parties as
reflected in this Agreement.

                  10.8. ARBITRATION AWARD. The arbitration panel shall render
its decision within sixty (60) days after termination of the proceeding, which
decision shall be in writing. The decision of the majority of the panel shall be
final and binding on the parties to the proceeding.

                  10.9. COST OF ARBITRATION. Unless otherwise allocated by the
panel, each party shall bear the expense of its own arbitrator and its own
witnesses and shall jointly and equally bear with the other party the expense of
the umpire and the arbitration.

                  10.10. LIMIT OF JURISDICTION. The arbitration panel shall not
have jurisdiction to authorize any punitive damage awards between the parties.

                                   ARTICLE XI

                            NONCONTRACTUAL COVERAGES

                  11.1. NONCONTRACTUAL DAMAGES. This Agreement shall cover
Noncontractual Damages. "Noncontractual Damages" as used herein shall mean those
liabilities for which the Reinsured or any CGU Insurer is legally liable arising
from actual or

                                      -23-
<PAGE>

alleged misconduct of the Reinsured, any CGU Insurer or any of their affiliates,
or their agents, brokers, or representatives (other than NICO acting on behalf
of the Reinsurer pursuant to the Administrative Services Agreement, which
liability shall be indemnified pursuant to such Agreement) in their handling of
claims or losses, or in any of their dealings with their insureds or any other
person. Such liabilities shall include, but are not limited to, punitive,
exemplary, compensatory, and consequential damages. Such misconduct shall
include, but is not limited to, failure to settle within the policy limit,
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense, or in the trial of any action or in the preparation
or prosecution of any appeal consequent upon any action. Noncontractual Damages
shall also include, and this Agreement shall cover, any and all amounts
otherwise included in the definition of Ultimate Net Loss that the Reinsured
actually pays or is obligated to pay to ceding companies under Business Covered
that are agreements of assumed reinsurance, whether under the terms of such
reinsurance contracts or as a result of agreements between the Reinsured and
cedents as to the settlement of specific claims.

                  11.2. UNDERLYING EXCLUSION. This Agreement shall cover losses
for which the Reinsured or any CGU Insurer is

                                      -24-
<PAGE>

liable because (i) a judicial entity, having legal jurisdiction, invalidates any
exclusion under an insurance policy or reinsurance contract, or (ii) the issuer
of such insurance policy or reinsurance contract settles or pays, in good faith,
a Reinsured Risk to which any such exclusion might provide a defense, PROVIDED,
HOWEVER, that the amount of any such loss shall be subject to the other terms,
conditions and exclusions of this Agreement.

                                  ARTICLE XII

              SALVAGE, SUBROGATION AND CEDED REINSURANCE AGREEMENTS

                  12.1. SALVAGE AND SUBROGATION. The Reinsurer shall be
subrogated as respects any Ultimate Net Loss for which the Reinsurer shall
actually pay, or become liable to pay, on or after the Inception Date, but only
to the extent of the amount of payment by, or the amount of liability of, the
Reinsurer, to all rights of the Reinsured against any person or other entity who
may be legally responsible in damages for such Ultimate Net Loss. In addition,
the Reinsured hereby assigns, transfers and conveys to the Reinsurer any and all
rights of the Reinsured or any CGU Insurer to salvage and subrogation on the
Business Covered which was paid prior to the Inception Date (other than salvage
and subrogation with respect to the BROTHER JONATHAN loss, PROVIDED that the
Reinsurer shall have no obligation to

                                     -25-
<PAGE>

pay any costs of recovery thereof). The rights of the Reinsurer and the
obligations of the Reinsured under this Section 12.1 shall terminate at such
time as the Reinsurer shall have paid to the Reinsured under this Agreement an
amount of Ultimate Net Loss equal to the Aggregate Limit.

                  12.2. CEDED REINSURANCE AGREEMENTS. Effective as of the
Inception Date, the Reinsured hereby assigns, transfers and conveys to the
Reinsurer all reinsurance recoverables payable under the Ceded Reinsurance
Agreements, including amounts due from reinsurers for losses or loss adjustment
expenses on the Business Covered which were paid prior to the Inception Date;
provided, however, that the foregoing assignment shall be null and void
immediately upon (i) the filing of any petition or initiation of any proceeding
for the supervision, rehabilitation, conservation, or liquidation of the
Reinsurer or other proceedings for the protection of the Reinsurer's creditors,
which petition or proceedings shall have resulted in a finding by a court or
insurance regulator of competent jurisdiction of the insolvency of the Reinsurer
or (ii) at such time as the Reinsurer shall have paid to the Reinsured under
this Agreement an amount of Ultimate Net Loss equal to the Aggregate Limit. The
parties agree that neither the Reinsurer nor the Reinsured shall have the right
during the term of this

                                      -26-
<PAGE>

Agreement to commute any of the Ceded Reinsurance Agreements without the prior
written consent of the other party.

                  12.3. COLLECTION. The Reinsured shall, if reasonably requested
by the Reinsurer, aid the Reinsurer, at the Reinsurer's expense, in collection
of all amounts due in respect of the Reinsured Risks from reinsurers. The
collectibility of such reinsurance shall be the ultimate responsibility of the
Reinsurer and shall be at the risk and for the account of the Reinsurer in the
event such reinsurance is not collected until such time as Reinsurer shall have
paid to the Reinsured under this Agreement an amount of Ultimate Net Loss equal
to the Aggregate Limit.

                  12.4. EXPENSES. In determining the amount of salvage,
subrogation or reinsurance recoverables, there shall first be deducted from any
amount recovered the expenses incurred in effecting the recovery (including,
without limitation, all court, arbitration, mediation or other dispute
resolution costs, attorneys' fees and expenses but excluding overhead, salaries
and expenses of officers and employees of the Reinsured and similar internal
costs), except to the extent otherwise paid or reimbursed by the Reinsurer
hereunder.

                  12.5. ACTUAL RECEIPT. The Reinsured shall not be obligated to
credit the Reinsurer for salvage, subrogation or

                                      -27-
<PAGE>

reinsurance recoverables until such time as the Reinsured receives actual
payment of such amounts in cash or other assets.

                                  ARTICLE XIII

                                   WARRANTIES

                  13.1. Other than the contemplated acquisition of the Reinsured
which has been disclosed to Reinsurer, the Reinsured warrants and represents
that it shall not voluntarily undertake any change in its corporate structure
which would have a materially adverse impact upon the Reinsurer without the
prior consent of the Reinsurer, which shall not be unreasonably withheld or
delayed. The Reinsured further warrants and represents that it shall not change
its domicile, or the domicile of any affiliate reinsured hereunder, outside the
United States without the prior consent of the Reinsurer, which shall not be
unreasonably withheld or delayed.

                  13.2. The Reinsured warrants and represents that the direct
PIP claims set forth in Schedule 3 to this Agreement contains all direct PIP
claims known to Reinsured as of the date of this Agreement.

                  13.3. The Reinsured warrants and represents that to the best
of its knowledge and belief no material information

                                      -28-
<PAGE>

relating to risks reinsured hereunder has been intentionally withheld from the
Reinsurer.

                  13.4. The Reinsured warrants and represents that in the event
that the Reinsured purchases any additional reinsurance as respects the Business
Covered, the Reinsurer shall have a first right to sell such reinsurance to the
Reinsured. The Reinsured shall notify the Reinsurer that it intends to purchase
such reinsurance. It shall also notify the Reinsurer of the terms of such
additional reinsurance as offered in binding format by an appropriately licensed
non-affiliated reinsurer rated AAA by Standard & Poor's Corporation and Moody's.
The Reinsurer shall have thirty (30) days to make a binding offer to the
Reinsured to provide reinsurance to the Reinsured on the same terms and
conditions as those offered by the non-affiliated reinsurer.

                                      -29-
<PAGE>

                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

                  14.1. HEADINGS AND SCHEDULES. Headings used herein are not a
part of this Agreement and shall not affect the terms hereof. The attached
Schedules are a part of this Agreement.

                  14.2. NOTICES. All notices and communications hereunder shall
be in writing and shall become effective when received. Any written notice shall
be by either certified or registered mail, return receipt requested, or
overnight delivery service (providing for delivery receipt) or delivered by
hand. All notices or communications under this Agreement shall be addressed as
follows:

                  If to the Reinsured:
                  CGU Insurance Company
                  One Beacon Street
                  Boston, MA  02108
                  Attention: General Counsel

                  If to the Reinsurer:
                  Potomac Insurance Company
                  One Beacon Street
                  Boston, MA  02108
                  Attention: General Counsel

or in each case at such other address as either party shall
provide to the other as provided in this Section 14.2.

                                      -30-
<PAGE>

                  14.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. Neither this Agreement, nor any
right hereunder, may be assigned by either party without the prior written
consent of the other party hereto.

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

                  14.5. CURRENCY. Whenever the word "Dollars" or the "$" sign
appears in this Agreement, they shall be construed to mean United States
Dollars, and all transactions under this Agreement shall be in United States
Dollars.

                  14.6. AMENDMENTS. This Agreement may not be changed, altered
or modified unless the same shall be in writing executed by the Reinsured and
the Reinsurer.

                                      -31-
<PAGE>

                  14.7. GOVERNING LAW. This Agreement shall be interpreted and
governed by the laws of the State of New York without regard to its rules with
respect to conflicts of law.

                  14.8. INTEGRATION. This Agreement constitutes the entire
agreement between the parties hereto relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no general or specific warranties, representations or other agreements by or
among the parties in connection with the entering into of this Agreement or the
subject matter hereof, except as specifically set forth or contemplated herein.

                  14.9. NO WAIVER. No consent or waiver, express or implied, by
any party to or of any breach or default by any other party in the performance
by such other party of its obligations hereunder shall be deemed or construed to
be a consent or waiver to or of any other breach or default in the performance
of obligations hereunder by such other party hereunder. Failure on the part of
any party to complain of any act or failure to act of any other party or to
declare any other party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such first party of any of its
rights hereunder.

                                      -32-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives.

                                       CGU INSURANCE COMPANY

                                       By:
                                          -------------------------------------
                                       Title:
                                             -----------------------------
                                       Date:
                                            ------------------------------

                                       POTOMAC INSURANCE COMPANY

                                       By:
                                          -------------------------------------
                                       Title:
                                             -----------------------------
                                       Date:
                                             ------------------------------

                                      -33-

<PAGE>

                                   SCHEDULE 2

                               REINSURANCE PREMIUM

Initial Reinsurance Premium                                   $1,250 million

  less:  Ultimate Net Loss Paid by the                        [     ]
         Reinsured on or after the
         Inception Date and prior to
         the Effective Date

  plus:  Recoverables received under                          [     ]
         the Ceded Reinsurance Agreements
         on or after the Inception Date
         and prior to the Effective Date

  plus:  Salvage and subrogation received                     [     ]
         on or after the Inception Date
         and prior to the Effective Date

  less:  Unallocated Loss Adjustment                          [     ]
         Expenses incurred or assumed by
         Reinsured on or after the
         Inception Date and prior to the
         Effective Date(1)

  plus:  Interest at a rate of 6.5% per annum                 [     ]
         calculated as set forth below(2)

Reinsurance Premium                                           [     ]
                                                              =======

---------------------
         (1)      calculated as follows [    ]

         (2)      calculated (i) as of the last day of each month ending after
the Inception Date and (ii) as of the Effective Date, based on the mean of the
Reinsurance Premium calculated on an interim basis in accordance with the above
formula as of the first day of the applicable month (or as of the Inception Date
with respect to the initial period), and the Reinsurance Premium so calculated
through the last day of such month (or as of the Effective Date with respect to
the final period).

                                      -34-

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