Document:

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                                                                    EXHIBIT 10.3

                              ASSUMPTION AGREEMENT

                  THIS ASSUMPTION AGREEMENT (this "Agreement"), dated as of
October 2, 2000, is entered into by and between RELIANCE INSURANCE COMPANY, a
Pennsylvania corporation ("Seller") and RELIANCE REINSURANCE COMPANY, a Delaware
stock insurance company (the "Company").

                               W I T N E S S E T H

                  WHEREAS, Seller and Overseas Partners Ltd. ("Buyer") have
entered into a Stock Purchase Agreement, dated as of June 30, 2000, (the "Stock
Purchase Agreement"), pursuant to which Seller has agreed to sell, and Buyer has
agreed to purchase, all of the issued and outstanding shares of the capital
stock of the Company, upon the terms and subject to the conditions set forth
therein; and

                  WHEREAS, the execution and delivery of this Agreement by the
parties hereto is a condition to the Closing of the transactions contemplated by
the Stock Purchase Agreement;

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                  Section 1. Definitions. Capitalized terms used herein and not
defined herein, unless otherwise indicated, have the respective meanings
assigned to them in the Stock Purchase Agreement.

                  Section 2. Administrative Services.  Seller shall assume
responsibility for the administrative services, including claims services
required of the Company, with respect to the policies reinsured under the
RelianceDirect Quota Share Agreement.

                  Section 3. Assumption of Liabilities. Seller hereby assumes
and agrees to pay, perform and discharge in full, and releases and discharges
the Company, and its successors and assigns, completely, unconditionally and
forever from all Liabilities (as defined below) of the Company, other than any
Policy Liabilities (as such term is defined in the Stock Purchase Agreement),
(i) outstanding on the Closing Date, (ii) relating to events occurring on or
prior to the Closing Date or (iii) relating to the provision of administrative
services pursuant to Section 2 herein. The Company shall notify Seller of any
such Liabilities within 30 days after the Company is advised of any such
Liability; provided, however, that the failure by the Company to give such
notice to Seller will not prejudice any of the Company's rights under this
Agreement. For purposes of this Agreement, "Liabilities" shall mean any direct
or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation
or responsibility whether now known or unknown, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise.

                  Section 4. Indemnification of Seller. The Company hereby
agrees to defend and indemnify Seller, and its successors and assigns,
completely, unconditionally and forever, from all Liabilities of the Company
relating to events occurring solely after the Closing Date, except to the extent
that such events which give rise to such Liabilities are caused by any action
taken by Seller or any failure on the part of Seller to take any action required
to be taken by it.

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                  Section 5. Miscellaneous.
                             -------------

                  Section 5.1. Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by each of the Parties or, in the case of a waiver, by the
Party waiving compliance. No delay on the part of any Party on exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor shall
any waiver on the part of any Party of any right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any Party may otherwise have at law or
in equity.

                  Section 5.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW.)

                  Section 5.3. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same instrument.

                  Section 5.4. Assignment; Binding Effect; No Third-Party
Beneficiaries. Neither this Agreement, nor any of the rights, interests and
obligations hereunder, shall be assigned by either party hereto without the
prior written consent of the other party. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. Nothing contained in this
Agreement is intended or shall be construed to give any Person other than the
parties hereto any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.

                  Section 5.5. Interpretation. The Section headings contained
in this Agreement are solely for the purpose of reference and do not constitute
a part of this Agreement.

                  Section 5.6. Severability. If any provisions hereof shall be
held invalid or unenforceable by any court of competent jurisdiction or as a
result of future legislative action, such holding or action shall be strictly
construed and shall not affect the validity or effect of any other provision
hereof; provided, however, that the Parties shall use reasonable efforts,
including, but not limited to, the amendment of this Commutation Agreement, to
ensure that this Commutation Agreement shall reflect as closely as practicable
the intent of the Parties.

                  Section 5.7. Entire Agreement. This Agreement and the
agreements and other documents referred to herein and therein shall constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.

                                       2

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                  Section 5.8. Notices. All notices, requests, claims, demands
and other communications required to be in writing must be delivered by hand or
mailed by registered or certified mail (return receipt requested) or sent by any
means of electronic message transmission with delivery confirmed (by voice or
otherwise) to the parties at the following addresses (or at such other address
specified by like nature) and will be deemed given on the date such
communication is received:

                  If to Seller:

                  Reliance Insurance Company
                  3 Parkway
                  Philadelphia, Pennsylvania  19102-1376
                  Attention:   General Counsel
                  Facsimile:   (215) 864-4141

                  If to Company:

                  Reliance Reinsurance Company
                  3 Parkway
                  Philadelphia, Pennsylvania  19102-1376
                  Attention:   General Counsel
                  Facsimile:   (215) 864-6499

or to such other address as either party hereto may have furnished to the other
party by a notice in writing in accordance with this Section 5.8.

                                       3

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         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

                                 RELIANCE INSURANCE COMPANY

                                 By:  /s/ Michael P. Blivess
                                    --------------------------------------------
                                    Name:  Michael P. Blivess
                                    Title: Senior Vice President

                                 RELIANCE REINSURANCE COMPANY

                                 By: /s/ Edward J. Stanco
                                    --------------------------------------------
                                    Name:  Edward J. Stanco
                                    Title: Executive Vice President

                                       4<PAGE>

                                                                    EXHIBIT 10.4

                          TRANSITION SERVICES AGREEMENT

                  This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated
as of September 28, 2000, is entered into by and between Reliance Insurance
Company, a Pennsylvania corporation ("Reliance") and Overseas Partners Ltd., a
Bermuda company ("OPL").

                  WHEREAS, Reliance and OPL are parties to a Stock Purchase
Agreement, dated as of June 30, 2000 (the "Stock Purchase Agreement"), providing
for the sale by Reliance of all of the issued and outstanding shares of the
capital stock of Reliance Reinsurance Company (the "Company"), consisting of 500
shares of common stock par value $10,000 per share (the "Common Stock") (all
capitalized terms used herein without definition shall have the respective
meanings specified in the Stock Purchase Agreement); and

                  WHEREAS, the execution and delivery of this Agreement by the
parties hereto is a condition to the Closing of the transactions contemplated by
the Stock Purchase Agreement; and

                  WHEREAS, OPL and the Company desire Reliance to continue to
provide certain services to the Company that it has heretofore provided.

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                  Section 1. Definitions. Capitalized terms used herein and not
defined herein, unless otherwise indicated, have the respective meanings
assigned to them in the Stock Purchase Agreement.

                  Section 2. Effectiveness of Agreement. This Agreement shall
take effect upon the Closing Date.

                  Section 3. Services.
                             --------

                  Section 3.1. Agreement to Provide Services. At the request of
OPL or the Company, Reliance agrees to provide the Company during the term set
forth in Section 3.3, the transition services listed on Schedule I attached
hereto for the respective periods of time set forth on such Schedule (the
"Services"). The Services may be provided by (a) any Affiliate or employee of
Reliance unless as otherwise designated in such Schedule I or (b) with the
consent of OPL, such consent not to be unreasonably withheld, a third party on
the same terms and at the same cost as if such Services had been provided by
Reliance. OPL hereby consents to the outsourcing or subcontracting by Reliance
of any and all Services, including without limitation all information technology
and related services, which Reliance outsources or subcontracts for its
non-reinsurance businesses; provided, however, that (x) Reliance shall provide
to OPL at least 30 days' prior written notice of its intent to outsource or
subcontract such Services, (y) Reliance shall nonetheless remain responsible for
the proper performance of such outsourced or subcontracted Services in
accordance with the terms of this Agreement, and (z) any person or entity that
will perform such outsourced or subcontracted Services shall execute and deliver
an agreement reasonably acceptable to the Company substantially similar to the
provisions set forth in Section 6 of this Agreement.

                                       1

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                  Section 3.2. Fees for Services. Following the Closing Date, as
compensation for Services rendered to the Company hereunder, OPL will pay, not
later than 20 days after the end of each month following the month such Services
are rendered, the fees listed on Schedule I attached hereto for the respective
Services during the indicated period of time or, for any such shorter period of
time, a pro rata portion of such fees. If OPL and the Company desire Reliance to
continue to provide any of the Services to the Company after the respective
periods of time indicated on Schedule I attached hereto, the parties hereto
agree to negotiate in good faith the terms of an agreement for the provision of
such Services to the Company; provided that the fees for the provision of such
continued services shall be based on Reliance's actual costs.

                  Section 3.3. Term. This Agreement will remain in effect as to
any or all of the Services until the earlier of (i) the expiration of the
respective periods of time listed on Schedule I attached hereto or (ii)
termination by OPL at any time on not less than 30 days prior written notice (or
in the event of termination of Services with respect to premises, not less than
60 days' notice) to Reliance. In the event of any expiration or termination of
this Agreement as to any or all of the Services, OPL shall not be released from
its obligations to make payment to Reliance of any unpaid amounts due to
Reliance with respect to any Services theretofore rendered by Reliance prior to
such termination.

                  Section 3.4. Standard of Services. Reliance agrees that the
Services will be performed (i) in a professional and competent manner, (ii)
using at least the same standard of care that Reliance uses in performing such
services in its own affairs, (iii) using at least the same standard for
timeliness for the same services provided to other Reliance profit centers, (iv)
by assigning individuals to provide such services who possess such
qualifications as are reasonably required to perform the Services in accordance
with (i), (ii) and (iii) above and (iv) in compliance with all relevant federal
or state laws, rules and regulations (including tax requirements).

                  Section 4. Further Assurances. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use its commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and agreements
to consummate and make effective the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, each party hereto
shall cooperate with the other party, and execute and deliver, or use its
commercially reasonable efforts to cause to be executed and delivered, all
instruments, including instruments of conveyance, assignment and transfer, and
to make all filings with, and to obtain all consents, approvals or
authorizations of, any governmental or regulatory authority or any other person
under any permit, license, agreement, or other instrument, and to take all such
other actions as such party may reasonably be requested to take by any other
party hereto from time to time, consistent with the terms of this Agreement, in
order to effectuate the provisions and purposes of this Agreement. Without
limiting the generality of the foregoing, OPL shall be responsible for any costs
payable to any third party which are incurred in obtaining such third party's
consent, approval, authorization, sublicense or other necessary action under any
permit, license, agreement or other instrument in connection with the
performance of Services hereunder.

                                       2

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                  Section 5. Access to Information.

                  Section 5.1. Access to Information. From and after the date
hereof, each of OPL, including the Company and its subsidiaries, and Reliance
shall afford to the other and its representatives, reasonable access and
duplicating rights during normal business hours to all information within such
party's possession relating to the Services insofar as such access is reasonably
required by such other party.

                  Section 5.2. Access to Employees. Upon written request,
Reliance shall use reasonable efforts to make available to the Company and OPL
its directors, officers, employees, agents and representatives as may reasonably
be required (giving consideration to business demands of such persons) in
connection with the Services.

                  Section 5.3. Retention of Records. Except as otherwise
required by law or agreed in writing, each of OPL, including the Company and its
subsidiaries, and Reliance shall use reasonable efforts to accommodate the other
with respect to retention and provision of copies of any significant information
in such party's possession or under its control relating to the Services.

                  Section 6. Confidential Information. Reliance and OPL,
including the Company and its subsidiaries, hereby covenant and agree to hold in
trust and confidence all Confidential Information relating to the other party or
its respective subsidiaries. For the purposes hereof, "Confidential Information"
shall mean all non-public information not otherwise subject to a legally
cognizable privilege from disclosure which is disclosed by either party to the
other in connection with this Agreement and identified as "confidential" if in
writing or other tangible form, or if disclosed orally, reduced to writing
within twenty (20) days (with such writing identified as "confidential"). The
"Disclosing Party" shall be the party disclosing such information, and the
"Recipient Party" shall be the party receiving such information. Confidential
Information may include, without limitation, technical, economic and business
data, know-how, flow sheets, drawings, business plans, computer software and
databases and other similar materials. Confidential Information shall not
include information which is (a) in the public domain when it is received by or
becomes known to the Recipient Party or which subsequently enters the public
domain through no fault of the Recipient Party; (b) information which is already
known to the Recipient Party at the time of its disclosure to the Recipient
Party by the Disclosing Party and is not known by the Recipient Party to be the
subject of an obligation of confidence of any kind; (c) information which is
independently developed by the Recipient Party without any use of or reference
to the Confidential Information of the Disclosing Party and which such
independent development can be established by evidence that would be acceptable
to a court of competent jurisdiction; and (d) information which is received by
the Recipient Party in good faith without an obligation of confidence of any
kind from a third party who the Recipient Party had no reason to believe was not
lawfully in possession of such information free of any obligation of confidence
of any kind, but only until the Recipient Party subsequently comes to have
reason to believe that such information was subject to an obligation of
confidence of any kind when originally received. Without prejudice to the rights
and remedies of any party to this Agreement, a party disclosing any Confidential
Information shall be entitled to equitable relief including injunctive relief in
order to protect its Confidential Information from unauthorized disclosure.

                                       3

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                  Section 7. Indemnification. (a) OPL will indemnify Reliance
and its Affiliates, and their respective officers, directors and employees,
against, and hold them harmless from, any and all Losses incurred or suffered by
Reliance or its Affiliates, or their respective officers, directors and
employees, arising out of, or relating to, the provision of the Services in
accordance with this Agreement. (b) Reliance will indemnify OPL and its
Affiliates, and their respective officers, directors and employees, against, and
hold them harmless from, any and all Losses incurred or suffered by OPL or its
Affiliates, or their respective officers, directors and employees, arising out
of, or relating to, the provision of the Services in accordance with this
Agreement, but not any Losses arising or relating to the payment or
administration of claims by OPL and its Affiliates following the Closing. (c) In
the event that either party shall have a claim for indemnity against the other
under the terms of this Agreement, the parties shall follow the procedures set
forth in Section 8 of the Stock Purchase Agreement; provided, however, that in
the event that both Reliance and/or its Affiliates, and/or their respective
officers, directors and employees, on the one hand, and OPL and/or its
Affiliates, and/or their respective officers, directors and employees, on the
other hand, are named as defendants in any action, suit or proceeding (a "Joint
Action"), the duty and the cost of the defense of such Joint Action shall be
borne by OPL. To the extent that Reliance and/or its Affiliates, and/or their
respective officers, directors and employees agree, or are found by a final
determination of a court, to bear any liability for any damages awarded in a
Joint Action, OPL shall be entitled to reimbursement of the defense costs and
damages from Reliance in the proportion that such an agreement or determination
of liability bears to the aggregate amount of defense costs and damages. (d) No
circular recovery: A claim for indemnification under this Section 7 shall not
constitute a Loss for which a party is entitled to indemnification.

                  Section 8. Miscellaneous.
                             -------------

                  Section 8.1. Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by each of the Parties or, in the case of a waiver, by the
Party waiving compliance. No delay on the part of any Party on exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor shall
any waiver on the part of any Party of any right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any Party may otherwise have at law or
in equity.

                  Section 8.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER THE APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS).

                                       4

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                  Section 8.3. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.

                  Section 8.4. Assignment; Binding effect; No Third-Party
Beneficiaries. Neither this Agreement nor any of the rights, interests and
obligations hereunder shall be assigned by either party hereto without the prior
written consent of the other party. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Nothing contained in this
Agreement is intended or shall be construed to give any person other than the
parties hereto legal or equitable right, remedy or claim under or in respect of
this Agreement.

                  Section 8.5. Interpretation. The Section headings contained in
this Agreement are solely for the purpose of reference and do not constitute a
part of this Agreement.

                  Section 8.6. Severability. If any provisions hereof shall be
held invalid or unenforceable by any court of competent jurisdiction or as a
result of future legislative action, such holding or action shall be strictly
construed and shall not affect the validity or effect of any other provision
hereof; provided, however, that the Parties shall use reasonable efforts,
including, but not limited to, the amendment of this Agreement, to ensure that
this Agreement shall reflect as closely as practicable the intent of the
Parties.

                  Section 8.7. Entire Agreement. This Agreement and Schedule I
attached hereto and the agreements and other documents referred to herein and
therein shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.

                  Section 8.8. Notices. All notices, requests, claims, demands
and other communications required to be in writing must be delivered by hand or
mailed by registered or certified mail (return receipt requested) or sent by any
means of electronic message transmission with delivery confirmed (by voice or
otherwise) to the parties at the following addresses (or at such other address
specified by like nature) and will be deemed given on the date such
communication is received:

                  If to Reliance:

                  Reliance Insurance Company
                  3 Parkway
                  Philadelphia, Pennsylvania  19102-1376
                  Attention:   General Counsel
                  Facsimile:   (215) 864-4141

                                       5

<PAGE>

                  With concurrent copies to:

                  Reliance Group Holdings
                  55 East 52nd Street
                  New York, New York  10055
                  Attention:   General Counsel
                  Telephone:   (212) 909-1100
                  Facsimile:   (212) 909-1864

                  Dewey Ballantine LLP
                  1301 Avenue of the Americas
                  New York, New York  10019
                  Attention:   Jonathan L. Freedman
                               Richard B. Romney
                  Telephone:   (212) 259-8000
                  Facsimile:   (212) 259-6333

                  If to OPL:

                  Overseas Partners LTD.
                  Mintflower Place
                  P.O. Box HM1581
                  8 Par-la-Ville Road
                  Hamilton HM08
                  Bermuda
                  Attention:   General Counsel
                  Facsimile:   (441) 292-9142

                  with a copy to:

                  LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                  125 West 55th Street
                  New York, NY  10019
                  Attention:   Michael Groll
                  Facsimile:   212-424-8500

or to such other address as either party hereto may have furnished to the other
party by a notice in writing in accordance with this Section 8.8.

                                       6

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.

                              RELIANCE  INSURANCE COMPANY

                               By  /s/  Michael P. Blivess
                                 ----------------------------------------------
                                 Name:  Michael P. Blivess
                                 Title: SVP

                              OVERSEAS PARTNERS LTD.

                              By  /s/  Mary R. Hennessy
                                 ----------------------------------------------
                                 Name:  Mary R. Hennessy
                                 Title: President and Chief Executive Officer

                                       7

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