Document:

CHANCE

                       WINTERTHUR SWISS INSURANCE COMPANY

                            WINTERTHUR INTERNATIONAL

                   -------------------------------------------
                     LIMITED RECOURSE RECEIVABLES FINANCING

                               FACILITY AGREEMENT
                   -------------------------------------------

<PAGE>

THIS AGREEMENT is made the 24th day of July 2001

BETWEEN:

1.    WINTERTHUR  SWISS  INSURANCE  COMPANY a joint-stock  company  incorporated
      under the laws of Switzerland (registered number CH-020.3.928.827-5) whose
      registered  office is at General  Guisan-Strasse  40, PO Box 357,  CH-8401
      Winterthur, Switzerland ("WINTERTHUR"); and

2.    WINTERTHUR  INTERNATIONAL,  a  company  incorporated  under  the  laws  of
      Switzerland  whose registered office is at  Gruzefeldstrasse  41, CH-8401,
      Winterthur ("WIRE").

WHEREAS

(A)   By an agreement  between  Winterthur  and the XL Insurance  dated as of 15
      February 2001 (the "SALE AND PURCHASE  AGREEMENT"),  Winterthur has agreed
      to sell and to procure  that the other  Selers sell and XL  Insurance  has
      agreed to purchase and to procure that the other  Purchasers  purchase the
      Operations  as a going  concern at  Completion  and the parties  intend to
      transfer the Operations at Completion. The sale will be by share transfer,
      by portfolio transfer and/or by reinsurance arrangements.

(B)   Winterthur  has made available  certain cash  facilities  to WIRE to cover
      claims payable by WIRE to its reinsureds  pending receipt of payments from
      its  reinsurers  pursuant  to  certain   pre-existing   arrangements  (the
      "ORIGINAL AGREEMENT").

(C)   Following  Completion of the Sale and Purchase  Agreement  Winterthur  has
      agreed to continue to make  available a cash facility to WIRE on the terms
      set out in this Agreement.

IT IS AGREED as follows:

1.    Words and phrases defined in the Sale and Purchase  Agreement shall in the
      absence of a definition in this Agreement  bear the meaning  attributed to
      them on the Sale and Purchase Agreement.

2.    Winterthur  hereby  agrees  to  extend  a  limited  recourse   receivables
      financing  facility (the  "FACILITY") to WIRE in accordance with the terms
      of this Agreement.

3.    The parties  acknowledge  and agree that as at the date hereof  Winterthur
      has  advanced  sums  to  WIRE  under  the  Original   Agreement  of  which
      approximately  CHF 440 million  remains  outstanding  (the actual  balance
      being referred to as the  "OUTSTANDING  BALANCE").  This  Agreement  shall
      supersede  and replace the terms of the Original  Agreement  in respect of
      such Outstanding Balance.

4.    The period of  availability  of financing under the Facility shall be from
      the date  hereof  until the second  anniversary  of the date  hereof  (the
      "FACILITY PERIOD").

<PAGE>

5.    WIRE may at any time during the  Facility  Period draw down funds from the
      Facility  subject to providing  Winterthur with notice in writing (a "DRAW
      DOWN NOTICE")  specifying  the amount  required and  specifying  that such
      amount will be used to satisfy  claims payable by WIRE in respect of which
      WIRE has not received  payment under its  reinsurance  arrangements  which
      were in force for any period prior to the  Effective  Time (the  "RELEVANT
      REINSURANCE AGREEMENTS") following WIRE having served a demand for payment
      under the Relevant Reinsurance  Agreement.  Upon receipt of such Draw Down
      Notice,  Winterthur shall make the funds specified in the Draw Down Notice
      (each "AN ADVANCE")  available to WIRE promptly (and in any event within 5
      Business  Days) by crediting such account as WIRE may specify from time to
      time in writing.

6.    If there is no  Outstanding  Balance or Advance  outstanding at the end of
      the Facility Period this Agreement shall terminate  automatically  at such
      time.

7.    Winterthur  acknowledges  and agrees that WIRE shall have no obligation or
      liability to repay the Outstanding Balance or any Advance unless and until
      and then  only to the  extent  that WIRE  recovers  any  amount  under the
      Relevant  Reinsurance  Agreement  in respect of the claims paid by WIRE to
      which the Outstanding  Balance or such Advance relates.  If WIRE does make
      such  recovery  at any  time  prior  to the End Date  under  the  Relevant
      Reinsurance  Agreement  it will apply such  recovery to repay the relevant
      portion of the  Outstanding  Balance to such  account  as  Winterthur  may
      specify  from  time to time  in  writing.  WIRE  shall  provide  quarterly
      statements  to  Winterthur  setting  forth,  in  reasonable  detail,  such
      payments and  recoveries,  accompanied by and payment to be made hereunder
      by WIRE to  Winterthur  within 30 days after the last day of each calendar
      quarter.

8.    If any part of the Outstanding  Balance or any Advances remain outstanding
      at the end of the  Facility  Period WIRE shall for the  avoidance of doubt
      repay the  Outstanding  Balance  or any  Advance  only to the extent it is
      obliged  to do so under the terms of Clause 7 above.  Notwithstanding  the
      above,  WIRE  shall,  simultaneously  with the making of the payment to be
      made  under  Clause  4.3 of the Sale and  Purchase  Agreement,  repay  the
      Outstanding  Balance and any Advance which has not already been repaid, at
      WIRE's  option,  either (i) in cash in US  Dollars;  or (ii) by way of the
      transfer of rights to receive monies from its  reinsurers  (such rights to
      be valued for these  purposes  in the same way as they would be valued for
      the purposes of the seasoning  mechanism under Clause 4 of the SPA and for
      the avoidance of doubt rights to receive monies from reinsurers who are at
      the relevant  time subject to insolvency or  receivership  proceedings  or
      other similar events arising after  Completion  being valued at zero);  or
      (iii) a  combination  of (i) and (ii) above,  as WIRE may determine in its
      absolute  discretion,  provided  that,  for the  avoidance  of  doubt  the
      aggregate  of the sums  under (i) and (ii) to be repaid  shall be equal to
      the aggregate of the Outstanding Balance and Advances outstanding.

9.    In consideration of Winterthur's agreement to provide Advances WIRE agrees
      to pay  interest  from the date  hereof on the lower of (i) the sum of the
      Outstanding Balance

<PAGE>

      outstanding  from day to day and (ii)  US$75  million at a rate equal to 3
      month LIBOR plus 50 basis  points for a period of six months from the date
      hereof only,  such interest  payment to be made promptly (and in any event
      within 5 Business  Days of the end of the said period of six  months).  No
      further  interest  shall accrue on either the  Outstanding  Balance or the
      Advances.

10.   If WIRE  transfers  any of its  obligations  to pay  claims  to which  the
      Facility  relates to any other company in the XL Insurance  Group then the
      transferee of such obligations  shall be entitled to draw down funds under
      the  Facility in  accordance  with the terms hereof as if it were party to
      this  Agreement.  In the event that any  reinsurance is provided to any of
      the  Operations  in relation to Policies  (which  Policies are written and
      reinsurance ceded prior to Completion) by any of the Operations other than
      WIRE the provisions of this Agreement  shall in such  circumstances  apply
      mutatis  mutandis in respect of claims payable by such other reinsurer and
      such other  reinsurer  shall (provided that they have joined as parties to
      this  Agreement  in such a way as to  undertake  to  Winterthur  the  same
      obligations  hereunder  as WIRE with respect to such  Policies)  enjoy the
      same rights hereunder as WIRE.

11.   Each  communication  or notice to be made or given hereunder shall be made
      in writing in the English language and, unless otherwise stated,  shall be
      made by fax or letter:-

      in the case of Winterthur at:

      General Guisan-Strasse 40
      PO Box 357
      CH-8401Winterthur
      Switzerland
      Fax: +41 52 261 48 20

      Attention: Katharina. Schoop; and

      in the case of WIRE at:

      Gruzefeldstrasse 41
      CH-8401 Winterthur
      Switzerland
      Fax: +41 52 261 70 90

      Attention: Thomas Popp

      with a copy to Katherine Coates at Clifford Chance, 200 Aldersgate Street,
      London EC1A 4JJ,  England  (fax +44 (20) 7600 5555) and  Immanuel  Kohn at
      Cahill Gordon & Reindel at  80 Pine Street,  New York, NY  10005, USA (fax
      +1 (212) 269 5420). Any such notice or other  communication  shall be sent
      by fax or  prepaid  first  class  post.  If sent  by fax  such  notice  or
      communication shall conclusively be deemed to have been given or served on
      the following  business day. If sent by post such notice or  communication
      shall conclusively be deemed to have been received five business days from
      the time of posting.

<PAGE>

12.   This Agreement is governed by English Law.

13.   The courts of England have  exclusive  jurisdiction  to settle any dispute
      hereunder.  The  parties  agree that the  courts of  England  are the most
      appropriate  and convenient  courts to settle  disputes  between them and,
      accordingly, that they will not argue to the contrary.

<PAGE>

AS WITNESS  the hands of the duly  authorised  representatives  of  the  parties
hereto the day and year first before written.

SIGNED by                           }
for and on behalf of                }   /s/ Sven Fokkema
WINTERTHUR SWISS INSURANCE COMPANY  }   --------------------

SIGNED by                           }
for and on behalf of                }   /s/ Maria Di Geso
WINTERTHUR INTERNATIONAL            }   --------------------AGREEMENT

This Agreement is made on 24 December 2003 between WINTERTHUR SWISS INSURANCE
COMPANY, a joint stock company incorporated under the laws of Switzerland
("WINTERTHUR"), AND XL INSURANCE (BERMUDA) LTD, a company incorporated under the
laws of Bermuda ("XL").

         WHEREAS Winterthur and XL are parties to the Second Amended and
Restated Agreement for the Sale and Purchase of Winterthur International, dated
as of 15 February 2001 ("SPA"), and capitalized terms used herein shall have the
same meanings as in the SPA (unless otherwise indicated);

         WHEREAS: (i) there has not been delivered the Completion Financial
Information as required by paragraph 3.1 of Part 2 of Schedule 5 to SPA; (ii)
Winterthur has delivered certain unaudited financial information for the
Operations as at 30 June 2001; and (iii) Winterthur and XL have been unable to
reach agreement as to the Completion Balance Sheet but have been able to reach
agreement as respects certain other matters as specifically set forth below
solely to settle the Purchase Price, the Initial Net Reserves Amount and the
Initial Net Premium Receivable (as defined in Schedule B hereto).

         NOW, THEREFORE, Winterthur and XL hereby agree as follows:

1.       DETERMINATION OF PURCHASE PRICE AND INITIAL NET RESERVES AMOUNT

         1.1(A) Winterthur and XL agree the following amounts for purposes of
                determining the amount of the Purchase Price and establishing
                the Initial Net Reserves Amount and the Initial Net Premium
                Receivable;

                   (i)   the Pro-Forma Net Asset Value as of 30 June 2001 is US$
                         234,995,000.

                   (ii)  the Premium (notwithstanding Clause 3.1.5 of the SPA)
                         is US$ 51,483,700 (after giving effect to the exclusion
                         of certain accident and health business, the net amount
                         is US$31,983,700);

                   (iii) the Purchase Price is US$ 330,157,700;

                   (iv)  the Initial Net Reserves Amount is US$1,509,816,000;

                   (v)   the Initial Net Premium Receivable is US$ 744,266,300;
                         and

                   (vi)  solely for the purpose of determining the Initial Net
                         Reserves Amount as contemplated by Schedule A hereto,
                         the Purchase Price and the Initial Net Premium
                         Receivable, the line items listed on such Schedule A
                         shall be deemed to be the amounts set forth in such
                         Schedule A;

                provided, however, that nothing in this Agreement (other than
                the determination of the Initial Net Reserves Amount and the
                Initial Net Premium Receivable) shall affect the determination
                the Seasoned Net Reserves Amount or the Seasoned Net Premiums
                of Receivable Balance, including, without limitation,
                determination of the date and/or rate to be used for foreign
                exchange conversion of any amount in connection therewith.

<PAGE>

                (b)  Winterthur and XL also agree that the Independent Actuary
                     need not be instructed under Clause 4.3.5 of the SPA.

         1.2.   Except as expressly provided herein, nothing in this Agreement
                shall affect or be used as evidence with respect to
                determination of the rights and/or obligations of XL or
                Winterthur as respects any Specified Claim or any other claim
                under or related to the SPA provided, however, that XL
                acknowledges that, upon timely receipt by the parties of the
                payments referred to in Section 2 of this Agreement, Winterthur
                shall have no continuing obligation under the SPA to deliver
                Completion Financial Information (but such acknowledgement is
                without prejudice to any Specified Claim or such other claim XL
                may have for breach of such provisions prior to such date). For
                the avoidance of doubt, this Section is without prejudice to the
                double claims provisions in Clauses 8.6 and 8.2.7 of the SPA.

         1.3.   No agreement has been reached with respect to whether or not
                there has been or the extent to which there has been an
                adjustment to the Net Asset Value of the relevant Operations
                pursuant to Clause 3.6 of the SPA or any other adjustment to the
                Purchase Price to take account of any breach of the SPA by any
                Seller.

         1.4.   XL hereby informs Winterthur that, except for the purposes
                expressly set forth in Section 1.1 above, XL has not agreed to
                the information on Schedule A.

2.       PAYMENTS

         2.1.   Payment Agreement

                Winterthur and XL hereby agree that:

                (a)  all conditions to release of the Retention Amount and the
                     Income (these terms and other capitalized terms in this
                     Section 2.1, not otherwise defined, are used as defined in
                     the Payment Agreement dated 24 July 2001) are satisfied or
                     waived; and

                (b)  Winterthur and XL shall deliver to the Escrow Agent, as
                     soon as possible on or after the date of this Agreement,
                     the Transfer Notice in the form set out in Schedule E
                     hereto to effect to the timely realization and distribution
                     of the Fund to be received no later than noon, Bermuda
                     time, 31 December 2003, as follows;

                     (i)     74.84232% of the Retention Amount to XL;

                     (ii)    25.15768% of the Retention Amount to Winterthur;

                     (iii)   87.42116% of the Income to XL; and

                     (iv)    12.57884% of the Income to Winterthur;

                (c)  Receipt of the payments referred to in Section 2.1(b) above
                     and Section 2.2 below by Winterthur or XL as appropriate
                     shall constitute full and final satisfaction of Winterthur
                     and XL's respective obligations and rights in respect of
                     the payment of the Purchase Price, without prejudice to
                     Clause 3.5 of SPA.

-2-

<PAGE>

         2.2.   Payment on Account

                Winterthur agrees to pay, so that such payment is received no
                later than noon, Bermuda time, 31 December 2003, the sum of US$
                40 million (the "Advanced Amount") to XL pending the seasoning
                of net reserves set out in the SPA, subject to the following
                provisions;

                (a)  In the event that the Seasoned Net Reserves Payment is
                     payable by Winterthur to XL and the total of the Seasoned
                     Net Reserves Payments (the "SNRP TOTAL") is greater than
                     the Advanced Amount, the Advanced Amount shall be deducted
                     from the amount of the SNRP Total and the balance (for the
                     purposes of this Section 2.2, the "Balance") shall be paid
                     by Winterthur to XL in accordance with the provisions for
                     payment set out in Clause 4.3.1 of the SPA. (For the
                     avoidance of doubt, the Balance shall be paid with interest
                     accruing on the Balance and not on the Seasoned Net
                     Reserves Payment as a whole at the rate set out in Clause
                     4.3.1 of the SPA).

                (b)  In the event that the Seasoned Net Reserves Payment is
                     payable by Winterthur to XL and the SNRP Total is less than
                     the Advanced Amount, the Seasoned Net Reserves Payments
                     shall not be paid by Winterthur to XL and instead XL shall
                     pay the amount by which the SNRP Total is less than the
                     Advanced Amount in US$ to Winterthur within five Business
                     Days of the agreement or determination of the Seasoned Net
                     Reserves Amount plus interest thereon (from and including
                     the End Date to but excluding the date such payment is
                     made) at a non compounding rate per annum of 0.5 per cent
                     above Base Rate.

                (c)  In the event that no Seasoned Net Reserves Payment is
                     payable under the terms of the SPA, XL shall repay to
                     Winterthur within five Business Days of the agreement or
                     determination of the Seasoned Net Reserves Amount an amount
                     in US$ equal to the Advanced Amount plus interest thereon
                     (from and including the End Date to but excluding the date
                     such payment is made) at a non-compounding rate per annum
                     of 0.5 per cent above Base Rate.

                (d)  In the event that the Seasoned Net Reserves Payment is
                     payable by XL to Winterthur, the Seasoned Net Reserves
                     Amount shall be increased by the Advanced Amount and the
                     aggregate amount shall be paid by XL to Winterthur in
                     accordance with the provisions for payment set out in
                     Clause 4.3.3 of the SPA.

         2.3    Limited Recourse Receivables Financing Facility Agreement

                In relation to certain amounts owing to Winterthur:

                (a)  XL shall procure that Winterthur International (Re) repays
                     CHF 12,087,422.75 in cash to Winterthur so that such funds
                     are received no later than noon, Bermuda time, 31 December
                     2003, which payment shall be deemed to be a payment under
                     the Limited Recourse Receivables Financing Facility
                     Agreement, together with interest from 1 July 2002 at a
                     non-compounding rate per annum of 0.5 per cent above the
                     Base Rate; and

                (b)  XL Insurance shall procure that Winterthur International
                     (Re) repays CHF42,362,474.25 in cash, which payment shall
                     be deemed to be a payment un-

-3-

<PAGE>

                     der the Limited Recourse Receivables Financing Facility
                     Agreement, together with interest from 1 July 2002 at a
                     non-compounding rate per annum of 0.5 per cent above the
                     Base Rate to Winterthur simultaneously with the entry by
                     Winterthur and each of WIICL, Winterthur International
                     (Re); XL Insurance Switzerland, XL Insurance America, Inc.,
                     XL Select Insurance Company and XL International (Bermuda)
                     Ltd into reinsurance agreements and related claims handling
                     agreements relating to certain Asbestos Liabilities (which
                     agreements shall not amend or vary the terms of the SPA and
                     the rights or obligations of any person under the SPA,
                     including, without limitation, under Clauses 9.1.1 and
                     9.1.2 of the SPA, shall in no way be prejudiced by the
                     entering into of or the giving effect to such agreements or
                     by the absence or removal of cover under or termination of
                     such agreements), all in a form to be agreed between the
                     parties provided that in the event that such reinsurance
                     agreements and related claims handling agreements have not
                     been entered into prior to the making of the payment to be
                     made under Clause 4.3 of the SPA, such amount shall be
                     repaid in accordance with the provisions of the Limited
                     Recourse Receivables Financing Facility Agreement. The
                     parties agree to use reasonable endeavours to agree and
                     enter into such reinsurance and related agreements prior to
                     29 February 2004.

         2.4.   Commutation of the CAT Tower

                (a)  Winterthur agrees and XL agrees to procure that the
                     commutation agreement (the "Commutation Agreement") in the
                     form set out in SCHEDULE C to this Agreement shall be
                     entered into as soon as possible but in any event prior to
                     31 December 2003;

                (b)  Winterthur agrees and XL (on behalf of Winterthur
                     International (Re)) agree that the CHF 19,500,000 million
                     referred to in the Commutation Agreement shall be repaid by
                     Winterthur (together with interest of CHF 605,522) by way
                     of set off against the amount to be repaid by or of behalf
                     of Winterthur International (Re) pursuant to Section 2.3(a)
                     above.

         2.5.   The parties shall deliver their respective signed counterparts
                of the Transfer Notice to the Escrow Agent as of the opening of
                business, London time, on 29 December 2003.

         2.6.   All payments pursuant this Section 2 shall be made by wire
                transfer of immediately available funds.

3.       AMENDMENTS TO SPA

         Winterthur and XL agree to amend the SPA as follows subject to (i)
         timely receipt of payments in accordance with Section 2 except for
         section 2.1(b); and (ii) timely delivery of the Transfer Notice in
         accordance with Section 2.5:

         3.1.   The time limit relating to Specified Claims in Clause 8.2.1(ii)
                (excluding sub-clauses (a) and(b)) of the SPA are extended from
                nine months to eleven months.

         3.2.   The provisions relating to seasoning of premiums as set forth on
                SCHEDULE B hereto are incorporated into the SPA on the basis
                that reference therein to "the Agreement of which this Schedule
                forms part" shall be deemed to be a reference this Agreement;
                and

-4-

<PAGE>

         3.3    Solely for the purpose of determining the unearned premium
                reserve as respects the Seasoned Net Reserves Amount pursuant to
                Clause 4.2 of the SPA, the loss ratio is seventy-one percent
                (71%) and the definition of "Reserves" in the SPA is amended as
                set forth in SCHEDULE D hereto.

4.       MISCELLANEOUS

         4.1    Winterthur and XL shall and XL shall procure that Winterthur
                International (Re) shall enter into a letter in the form set out
                in Schedule F (the "SRA AMENDMENT LETTER") relating to each of
                the Sellers Retrocession Agreements as soon as possible but in
                any event prior to 31 December 2003, and the Sellers
                Retrocession Agreements as amended shall be the Sellers
                Retrocession Agreement for the purposes of the SPA. The
                amendments referred to in the SRA Amendment Letter shall become
                effective at the same time as the amendments to the SPA referred
                to in Section 3.

         4.2    The parties will use their best endeavours to work together in
                good faith with a view to agreeing:

                (a)  a reduction in the "Amount of Cover" as set out in the
                     schedule to each Sellers Retrocession Agreement;

                (b)  an adjustment to the "Amount of Deductible" as set out in
                     the schedule to each Sellers Retrocession Agreement;

                (c)  a satisfactory solution to the communication of the Sellers
                     Retrocession Agreements; and

                (d)  a satisfactory resolution as to whether there should be an
                     extension in time for seasoning reinsurance receivables.

         4.3    Except as expressly provided herein, nothing herein shall affect
                Winterthur's or XL's rights or obligations under the SPA or any
                agreement entered into pursuant to the SPA or any Local
                Agreement, including, without limitation, in respect of any
                indemnities, Specified Claims, other claims under or in respect
                of the SPA and the Seasoned Net Reserves Amount, or under any
                other agreement to which Winterthur and XL are parties or under
                any Sellers Retrocession Agreement. For the avoidance of doubt
                and notwithstanding any provision to the contrary therein,
                nothing herein or any payment made pursuant hereto shall give
                rise to commutation or other termination or a release or parties
                to either Sellers Retrocession Agreement, which shall continue
                in effect.

         4.4    Clauses 18.4, 18.8, 18.11 (insofar only as payments required by
                this Agreement are made after the date on which such payments
                are to be made pursuant to this Agreement), 18.12, 18.15, 18.16,
                18.17, 18.18 and 18.19 of the SPA shall apply to this Agreement
                as if fully set forth herein (except as respects references
                therein to other Clauses of the SPA).

-5-
<PAGE>

      IN WITNESS WHEREOF this Agreement has been duly executed.

SIGNED by /s/ John R. Dacey    /s/ Hans Kuenzle
          -------------------------------------
on behalf of WINTERTHUR SWISS INSURANCE
COMPANY

SIGNED by /s/ Clive Tobin
          ----------------------------------
on behalf of XL INSURANCE (BERMUDA) LTD.

-6-
<PAGE>

                   SCHEDULE A - COMPLETION BALANCE SHEET ITEMS

--------------------------------------------------------------------------------
THE PURCHASE PRICE HAS BEEN CALCULATED AS FOLLOWS (IN THOUSANDS OF US DOLLARS):

<TABLE>
<CAPTION>
                                                                                                    June 30, 2001
                                                                                                    -------------
<S>                                                                               <C>                <C>
Cash and cash equivalents                                                                            $    89,372
Portfolio assets                                                                                         189,673
Fixed interest securities, available for sale, at fair value                                             694,959
Equity securities, available for sale, at fair value                                                      85,579
Short-term investments, at fair value                                                                    446,815
Other investments                                                                                            315
Accrued interest income                                                                                   14,580
Deferred acquisition expenses                                                                             63,802
Prepaid reinsurance premiums                                                                             264,556
Premiums and insurance balances receivable
    (net of bad debt provisions)                                                                       1,350,587
Reinsurance balances receivable and reinsurance deposits                                                 127,475
Unpaid losses and loss adjustment expenses recoverable                                                 1,317,039
Fixed assets                                                                                              42,558
Other assets (including due from related parties of $65,918)                                             246,582
Excluded business                                                                                        (77,563)
Unpaid losses and loss adjustment expenses                                                            (2,556,348)
Unearned premiums                                                                                       (824,286)
Provision for future dividends to policyholders                                                             (574)
Deposit liabilities                                                                                     (183,229)
Reinsurance balances payable                                                                            (501,039)
Funds held under reinsurance agreements                                                                   (6,762)
Other liabilities (including due to related parties of $277,216)                                        (499,552)
Minority interest                                                                                         (2,724)
                                                                                                     -----------

NET ASSET VALUE                                                                                      $   281,815

Proforma Adjustments
    Deferred tax assets                                                               (1,011)
    Intangible assets excluding Genius
        and Netherlands                                                               (2,130)
    Capital Contribution to UK                                                       (43,679)
                                                                                  ----------
                                                                                                         (46,820)
                                                                                                     -----------
    Proforma Net Asset Value as of 30 June 2001                                                          234,995
Adjusted Premium (including $19,500,000 Goodwill on certain
    Accident & Health business)                                                                           51,484
Reimbursement of Capital Contribution                                                                     43,679
                                                                                                     -----------
PURCHASE PRICE                                                                                           330,158
                                                                                                     -----------
INITIAL NET RESERVES AMOUNT AS OF 30 JUNE 2001 HAS BEEN CALCULATED AS FOLLOWS
(IN THOUSANDS OF US DOLLARS):

Unpaid losses and loss adjustment expenses                                         2,556,348
Unpaid losses and loss adjustment expenses recoverable                            (1,317,039)
Provision for future dividends                                                           574
                                                                                  ----------
                                                                                                       1,239,883
Reinsurance balances receivable                                                                         (127,475)
Unearned premium reserve                                                             824,286
Prepaid reinsurance premiums                                                        (264,556)
                                                                                  ----------
                                                                                     559,730

71% thereof                                                                                              397,408

INITIAL NET RESERVES AS OF 30 JUNE 2001                                                                1,509,816
                                                                                                     -----------
</TABLE>

<PAGE>

                                   SCHEDULE B
                       PREMIUM SEASONING - SPA AMENDMENTS

DEFINITIONS

"SEASONED NET PREMIUMS RECEIVABLE BALANCE" means the sum of:

(i)      the INITIAL NET PREMIUM RECEIVABLE, being US $744,266,300, calculated
         as follows:

         (a)    the premiums and insurance balances receivable (net of bad debt
                provisions) as shown in Schedule A to the Agreement of which
                this Schedule forms part ("Schedule A") less reinsurance
                balances payable and funds held under reinsurance agreements as
                shown in Schedule A; less

         (b)    29% of the aggregate of the unearned premium as shown in
                Schedule A less the prepaid reinsurance premiums as shown in
                Schedule A; plus

         (c)    the deferred acquisition costs as shown in Schedule A;

         For the avoidance of doubt this is calculated as follows:

         US$'000's 1,350,587 - 501,039 - 6,762 - (29% *(824,286-264,556)) +
         68,802 = 744,266

(ii)     plus any positive, or, as the case may be, less any negative adjustment
         calculated as follows:

         (a)    71% of the aggregate of:

                (i)  the unearned premium less the prepaid reinsurance premiums
                     in each case to the extent solely relating to Relevant
                     Operations, as determined in accordance with US GAAP and as
                     identified as at the End Date calculated as at the
                     Effective Time; less

                (ii) the unearned premiums as shown in Schedule A less the
                     prepaid reinsurance premiums as shown in Schedule A;

plus

         (b)    the aggregate of:

                (i)  the premiums and insurance balances receivable (net of bad
                     debt provisions and, for the avoidance of doubt, net of any
                     commissions) less reinsurance balances payable and funds
                     held under reinsurance agreements (and for the avoidance of
                     doubt, this amount is net of any commissions) in each case
                     to the extent relating solely to the Relevant Operations,
                     as determined in accordance with US GAAP identified as at
                     the End Date; less

<PAGE>

                (ii) the unearned premium less the prepaid reinsurance premiums
                     in each case to the extent solely relating to Relevant
                     Operations, as determined in accordance with US GAAP and as
                     identified as at the End Date calculated as at the
                     Effective Time; plus

               (iii) the deferred acquisition costs in each case to the extent
                     solely relating to Relevant Operations, as determined in
                     accordance with US GAAP and as identified as at the End
                     Date calculated as at the Effective Time less

         (c)    US $346,858,000 being the aggregate of

                (iv) the premiums and insurance balances receivable (net of bad
                     debt provisions and, for the avoidance of doubt, net of any
                     commissions) less reinsurance balances payable and funds
                     held under reinsurance agreements (and for the avoidance of
                     doubt, this amount is net of any commissions) as shown in
                     Schedule A; less

                (iv) the unearned premium less the prepaid reinsurance premiums
                     as shown in Schedule A; plus

                (v)  the deferred acquisition costs as shown in Schedule A.

                For the avoidance of doubt item (ii) (c) has been calculated
                using Schedule A as follows:

                USD 000s (1,350,587 - 501,039 - 6,762) less (824,286 -
                264,556) plus (63,802) = 346,858

                for the avoidance of doubt, each of (ii)(a) and (ii)(b) can be
                negative as well as positive.

In calculating the Seasoned Net Premiums Receivable Balance, the classification,
characterization or provision of any amount shall be consistent with the
classification, characterization or provision used in calculating the Initial
Net Premium Receivable.

SUBSTANTIVE PROVISION

4.4      DETERMINATION OF THE SEASONED NET PREMIUMS RECEIVABLE BALANCE

         4.4.1  Subject to Clause 18.4 from and after Completion and until the
                End Date XL Insurance shall make available to Winterthur,
                Winterthur's Accountants and Winterthur's Actuary during normal
                business hours:

                (i)  all studies relating to premiums receivable, commissions or
                     reinsurance premium ceded prepared by or on behalf of XL
                     Insurance to the extent relating to Relevant Operations;
                     and

-2-
<PAGE>

                (ii) all auditor's letters to management to the extent relating
                     to net premiums subject to the Initial Net Premiums
                     Receivable Balance which have been completed by or on
                     behalf of XL Insurance during such period.

         4.4.2  Within 30 Business Days following the End Date XL Insurance
                shall deliver to Winterthur a written statement setting forth in
                reasonable detail its calculation of the Seasoned Net Premiums
                Receivable Balance (the "Seasoned Net Premiums Receivable
                Statement").

         4.4.3  In order to enable Winterthur, Winterthur's Accountants and
                Winterthur's Actuary to review the Seasoned Net Premiums
                Receivable Statement, XL Insurance shall keep up-to-date and
                make available to Winterthur, Winterthur's Accountants and
                Winterthur's Actuary its books, records, contracts and
                agreements relating to the Relevant Operations during normal
                business hours and co-operate with them with regard to their
                review of the Seasoned Net Premiums Receivable Statement. XL
                Insurance agrees insofar as it is reasonable to do so to make
                available the services of the employees of the relevant
                Associated Companies of XL Insurance to assist Winterthur,
                Winterthur's Accountants and Winterthur's Actuary to undertake
                the matters contemplated by this Clause 4.4. XL Insurance shall
                procure that after the preparation of the Seasoned Net Premiums
                Receivable Statement, XL Insurance's Accountants and XL
                Insurance's Actuary shall give Winterthur, Winterthur's
                Accountants and Winterthur's Actuary access to XL Insurance's
                Accountants' and XL Insurance's Actuary's working papers and
                files (with the right to take copies at Winterthur's expense,
                subject to Winterthur entering into an acceptable
                confidentiality undertaking) and personnel which or who are (and
                only to the extent) relevant to the review of the Seasoned Net
                Premiums Receivable Statement by Winterthur, Winterthur's
                Accountants and Winterthur's Actuary subject to Winterthur
                providing or procuring the provision of a hold harmless
                undertaking to XL Insurance's Accountants and XL Insurance's
                Actuary.

         4.4.4  Within 30 Business Days of receipt by Winterthur of the Seasoned
                Net Premiums Receivable Statement Winterthur may give written
                notice to XL Insurance stating that it disagrees with the
                Seasoned Net Premiums Receivable Statement, together with
                reasons for the disagreement in reasonable detail and
                quantifying the amount of such disagreement (for the purpose of
                this Clause 4.4 the "WINTERTHUR DISAGREEMENT NOTICE"). In the
                absence of such notice within such period, the Seasoned Net
                Premiums Receivable Statement shall be final and binding on the
                parties for all purposes.

         4.4.5  If Winterthur gives a valid Winterthur Disagreement Notice
                within such 30 Business Days Winterthur and XL Insurance shall
                attempt in good faith to reach agreement in respect thereto. If
                they reach agreement then the agreed amount shall be finally and
                conclusively the Seasoned Net Premiums Receivable Balance for
                the purpose of this Agreement and if they are unable to do so
                within 10 Business Days of receipt by XL Insurance of the
                Winterthur Disagreement Notice then either Winterthur or XL
                Insurance may by notice in writing to the other require that the
                calculation of the Seasoned Net Premiums Receivable Balance be
                referred to the Independent Actuary (AN "ACTUARY APPOINTMENT
                NOTICE"). Within 10 Business Days of receipt by a party of the
                Actuary Appointment No-

-3-
<PAGE>

                tice each of Winterthur and XL Insurance shall give written
                notice to the other and to the Independent Actuary of its
                proposed Seasoned Net Premiums Receivable Balance.

         4.4.6  The Independent Actuary shall be a member of the Casualty
                Acturial Society ("CAS") or a Fellow of the Institute of
                Actuaries ("FIA") and shall be instructed to independently
                determine the Seasoned Net Premiums Receivable Balance in
                accordance with the principles and standards of practice of the
                CAS or the FIA as the case may be and the American Academy of
                Actuaries and to make its determination as soon as is reasonably
                practicable. The procedures of the Independent Actuary shall be
                determined by the Independent Actuary, but shall:

                (i)  give the parties a reasonable opportunity to make written
                     and oral representations to them;

                (ii) require that the parties supply each other with a copy of
                     any written representations at the same time as they are
                     made to the Independent Actuary; and

               (iii) permit each party to be present while oral submissions are
                     being made by any other party.

         4.4.7  The determination of the Independent Actuary shall be made in
                writing and sent to the parties at such time as it shall
                determine. The Independent Actuary shall act as an expert and
                not as an arbitrator and his or her determination shall be final
                and binding on the parties as provided in Clause 4.4.8

         4.4.8  If the Seasoned Net Premiums Receivable Balance as determined by
                the Independent Actuary is closer to the amount proposed by XL
                Insurance than the amount proposed by Winterthur (in each case
                pursuant to the last sentence of Clause 4.4.5) then for the
                purpose of this Agreement the Seasoned Net Premiums Receivable
                Balance shall be finally and conclusively deemed to be the
                amount so proposed by XL Insurance. If the Seasoned Net Premiums
                Receivable Balance as determined by the Independent Actuary is
                closer to the amount proposed by Winterthur than the amount
                proposed by XL Insurance (in each case pursuant to the last
                sentence of Clause 4.4.5) than for the purpose of this Agreement
                the Seasoned Net Premiums Receivable Balance shall be finally
                and conclusively deemed to be the amount so proposed by
                Winterthur.

         4.4.9  The parties shall co-operate with the Independent Actuary and
                comply with its reasonable requests made in connection with the
                carrying out of its duties under this Agreement. In particular
                without limitation XL Insurance shall keep up-to-date and
                subject to reasonable notice make available to Winterthur,
                Winterthur's Accountants, Winterthur's Actuary and the
                Independent Actuary its books, records, contracts and agreements
                relating to the Relevant Operations during normal business hours
                during the period from the appointment of the Independent
                Actuary down to the making of the determination by the
                Independent Actuary.

         4.4.10 Subject to Clause 4.4.11 nothing in this Clause 4.4 shall
                entitle a party or the Independent Actuary access to any
                information or document which is protected by

-4-
<PAGE>

                legal professional privilege or any other legal obligation of
                confidentiality or which has been prepared by the other party or
                its accountants, actuaries and other professional advisers with
                a view to assessing the merits of any claim or argument.

         4.4.11 A party shall not be entitled by reason of Clause 4.4.10 to
                refuse to supply such part or parts of documents as contain only
                the facts on which the relevant claim or argument is based.

         4.4.12 Each party shall and shall procure that its accountants,
                actuaries and other advisers shall and shall instruct the
                Independent Actuary to keep all information and documents
                provided to them pursuant to this Clause 4.4 confidential and
                shall not use the same for any purpose except for use in
                connection with the matters contemplated by this Clause 4.

4.5      SEASONED NET PREMIUMS RECEIVABLE PAYMENT

         4.5.1  If the Seasoned Net Premiums Receivable Balance as finally
                agreed or determined pursuant to Clause 4.4 is greater than 105
                per cent of the Initial Net Premiums Receivable Balance XL
                Insurance shall or shall procure that other Purchasers as
                appropriate pay to Winterthur or other Sellers as appropriate
                within five Business Days of such agreement or determination an
                amount in US Dollars equal to 100 per cent of the difference
                between:

                (i)  the Seasoned Net Premiums Receivable Balance; and

                (ii) 105 per cent of the Initial Net Premiums Receivable
                     Balance,

                plus interest thereon (from and including the End Date, to but
                excluding the date such payment is made) at a non-compounding
                rate per annum of 0.5 per cent above the Base Rate.

         4.5.2  If the Seasoned Net Premiums Receivable Balance as finally
                agreed or determined pursuant to Clause 4.4 is less than 95 per
                cent of the Initial Net Premiums Receivable Balance Winterthur
                shall or shall procure that other Sellers as appropriate pay
                to XL Insurance or other Purchasers as appropriate within five
                Business Days of such agreement or determination an amount in US
                Dollars equal to 100 per cent of the difference between:

                (i)  95 per cent of the Initial Net Premiums Receivable Balance;
                     and

                (ii) the Seasoned Net Premiums Receivable Balance,

                plus interest thereon (from and including the End Date to but
                excluding the date such payment is made) at a non-compounding
                rate per annum of 0.5 per cent above the Base Rate.

-5-
<PAGE>

                  SCHEDULE C -- FORM OF COMMUTATION AGREEMENT

C L I F F O R D                                    LIMITED LIABILITY PARTNERSHIP
C H A N C E

                     VITODURUM REINSURANCE COMPANY LIMITED

                                      AND

                       WINTERTHUR SWISS INSURANCE COMPANY

                     --------------------------------------

                      COMMUTATION AND SETTLEMENT AGREEMENT

                     --------------------------------------

<PAGE>

                                    CONTENTS

CLAUSE                                                                     PAGE

1.  Interpretation...........................................................1
2.  Commutation And Release..................................................2
3.  Commutation Payment......................................................2
4.  Alterations..............................................................2
5.  Entire Agreement.........................................................3
6.  Sale And Purchase Agreement..............................................3
7.  Costs....................................................................3
8.  Arbitration..............................................................3
9.  Counterparts.............................................................3

  ANNEXURE 1   Reinsurance Agreement.........................................1

<PAGE>

THIS AGREEMENT is made on the            day of           2003
BETWEEN

(A)      WINTERTHUR SWISS INSURANCE COMPANY a joint stock company incorporated
         under the laws of Switzerland (registered under CH-020.3.928.827-5)
         whose registered office is at General Guisan-Strasse 40, CH-8401,
         Winterthur, Switzerland (the "REINSURER");

(B)      VITODURUM REINSURANCE COMPANY LIMITED (formerly known as XL Winterthur
         International Re) a company incorporated in Switzerland (registered
         number CH-020.3.927.914-5) whose registered office is at
         Gruzefeldstrasse 41, CH-8401, Winterthur, Switzerland (the
         "REINSURED").

         INTRODUCTION

(A)      The Reinsurer and the Reinsured are party to an excess of loss
         reinsurance agreement dated 2 May 2002 in terms of which the Reinsurer
         reinsures the Reinsured in respect of certain Property Damage and
         Business Interruption and Property part of Multiline business.

(B)      The parties wish to release and discharge each other from all further
         obligations under or in connection with the Reinsurance Agreement.

         THE PARTIES AGREE AS FOLLOWS:

1.       INTERPRETATION

1.1      In this Agreement:

         "BASE RATE" means USD LIBOR being the London Inter-Bank Offer Rate for
         six months deposits in US Dollars;

         "COMMUTATION PAYMENT" means the payment made by the Reinsurer to the
         Reinsured set out in clause 3 below;

         "LIABILITIES" means all liabilities, duties, commitments and
         obligations of every description, whether deriving from a contract,
         common law, statute or otherwise, whether past, present or future,
         accrued or unaccrued, actual or contingent, ascertained or
         unascertained, agreed or disputed;

         "REINSURANCE AGREEMENT" means the reinsurance agreement referred to in
         recital (A), a copy of which is annexed to this Agreement as Annexure
         1; and

         "SALE AND PURCHASE AGREEMENT" means the second amended and restated
         agreement for the sale and purchase of Winterthur International dated
         as of 15 February 2001 between Winterthur Swiss Insurance Company and
         XL Insurance Ltd.

1.2      In this Agreement a reference to:

         1.2.1  a "PARTY" is a reference to the Reinsurer or the Reinsured, as
                the case may be, and a reference to "PARTIES" shall be construed
                accordingly;

<PAGE>

         1.2.2  a statutory provision includes a reference to the statutory
                provision as modified or reenacted or both from time to time
                whether before or after the date of this Agreement and any
                subordinate legislation made or other thing done under the
                statutory provision whether before or after the date of this
                Agreement;

         1.2.3  a document is a reference to that document as modified or
                replaced from time to time;

         1.2.4  a person includes a reference to a corporation, body corporate,
                association or partnership;

         1.2.5  a person includes a reference to that person's legal personal
                representatives, successors and permitted assigns;

         1.2.6  the singular includes the plural and vice versa (unless the
                context otherwise requires);

         1.2.7  a time of day is a reference to the time in London, unless the
                contrary indication appears; and

         1.2.8  a clause, a schedule or an annexure unless the context otherwise
                requires, is a reference to a clause of or a schedule or
                annexure to this Agreement.

         The headings in this Agreement do not affect its interpretation.

2.       COMMUTATION AND RELEASE

2.1      In consideration of the grant of the release contained herein and the
         making of the Commutation Payment the Reinsurer and the Reinsured
         hereby:

         (i)    irrevocably release and discharge each other from all past,
                present and future obligations; and

         (ii)   agree to terminate forthwith all rights,

         which in either case arise directly or indirectly out of or in
         connection with the Reinsurance Agreement.

2.2      The parties agree that the release constituted by this Agreement
         operates as a full and final settlement of both parties' Liabilities
         which arise directly or indirectly out of or in connection with the
         Reinsurance Agreement. Subject to the Commutation Payment provided for
         in clause 3 below, neither party shall have any Liability to repay to
         the other any payment or make good any loss incurred by the other in
         respect of any past obligations.

3.       COMMUTATION PAYMENT

         The Reinsurer shall pay to the Reinsured the sum of CHF 19.5 million in
         a manner to be agreed between the parties.

4.       ALTERATIONS

         A variation of this Agreement is valid only if it is in writing and
         signed by or on behalf of each party.

<PAGE>

5.       ENTIRE AGREEMENT

         This Agreement constitutes the entire agreement and supersede any
         previous agreements between the parties relating to the subject matter
         of this Agreement.

6.       SALE AND PURCHASE AGREEMENT

         This Agreement shall not vary the rights and remedies of either XL
         Insurance (Bermuda) Limited (formerly known as XL Insurance Ltd) or the
         Reinsurer under the Sale and Purchase Agreement.

7.       COSTS

         Each party shall pay its own costs relating to the negotiation,
         preparation, execution and implementation by it of this Agreement.

8.       ARBITRATION

         Any dispute arising out of this Agreement or concerning its
         interpretation or validity shall be resolved on a friendly basis and in
         accordance with current reinsurance practice rather than strictly
         according to the letter of the law. All such disputes shall be referred
         to a Court of Arbitration which will take place in Winterthur and which
         shall consist of two arbitrators, one to be appointed by each party,
         and an umpire who shall be appointed by the arbitrators before they
         have studied the case material. The arbitrators and the umpire shall be
         active or retired officials of companies or underwriters carrying on a
         similar type of insurance and/or reinsurance business to that protected
         hereunder.

         If either party fails to appoint an arbitrator within four weeks after
         being requested in writing by the other party to do so, or in the event
         of the arbitrators failing to agree as to the appointment of umpire
         within an identical period after their own appointment, such arbitrator
         or umpire shall be appointed by the Upper Court of the Canton of
         Zurich.

         The procedure shall be at the discretion of the Court of Arbitration,
         whereby it shall dispense as far as possible with all legal
         formalities. It shall pronounce on the distribution between the parties
         of costs and charges. The rulings of the Court of Arbitration shall be
         in writing, stating the reasons for its decision and be signed. In one
         of the arbitrators refuses to sign the decision, this shall have no
         bearing on its validity.

         The decision shall be reached within three months after the Court of
         Arbitration is constituted.

         Otherwise the stipulations of the law of Switzerland shall be
         applicable to this Agreement.

9.       COUNTERPARTS

         This Agreement may be executed in any number of counterparts, each of
         which is an original and all of which together evidence the same
         agreement.

<PAGE>

In witness whereof, the parties have executed this agreement on the day and year
 stated above.

Signed by [                ] on behalf of   )
VITODURUM REINSURANCE                       )
COMPANY LIMITED                             )

Signed by [                ] on behalf of   )
WINTERTHUR SWISS INSURANCE                  )
COMPANY                                     )

<PAGE>

                                   ANNEXURE 1
                             Reinsurance Agreement

<PAGE>

GENERAL CONDITIONS

WINTERTHUR INTERNATIONAL CATASTROPHE EXCESS OF LOSS
REINSURANCE AGREEMENT 2000

BETWEEN

VITODURUM INSURANCE COMPANY
WINTERTHUR, SWITZERLAND

HERINAFTER CALLED THE                         -REINSURED-

AND

HEREINAFTER CALLED THE                        -REINSURER-

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 2
--------------------------------------------------------------------------------

ARTICLE 1               PERIOD OF REINSURANCE AGREEMENT
--------------------------------------------------------------------------------

This Reinsurance Agreement shall apply to losses resulting from each and every
loss occurrence occurring on and after the date specified in the Schedule(s) and
shall remain in force for the period specified in the Schedule(s).

Where the original business is issued on another basis, such as "claims made",
"losses discovered", "loss causation", this Reinsurance Agreement shall also
apply on the same basis.

In case the original business makes no special provision for the aggregation of
a series of losses, this Reinsurance Agreement provides that multiple individual
losses arising from a set of related circumstances, determined in light of
time and geographical factors, and furthermore arising from a common cause,
shall be aggregated into one single loss and be attributed to the date of the
last loss, irrespective of the actual dates of each individual loss.

Additional cover details are described in the attached Schedule(s).

ARTICLE 2                     BUSINESS COVERED
--------------------------------------------------------------------------------

This Reinsurance Agreement shall apply to all insurance and facultative
reinsurance business accepted by the Reinsured as original and as described in
the attached Schedule(s).

ARTICLE 3                          EXCLUSIONS
--------------------------------------------------------------------------------

As per the attached Schedule(s).

ARTICLE 4                       TERRITORIAL SCOPE
--------------------------------------------------------------------------------

This Reinsurance Agreement shall cover interests of insureds located within the
territorial scope described in the attached Schedule(s).

ARTICLE 5                      REINSURING CLAUSE
--------------------------------------------------------------------------------

The Reinsurer hereby agrees to indemnify the Reinsured for the shares as set out
in the Schedule(s) of that part of the Reinsured's ultimate net loss each and
every loss occurrence which exceeds the amount of the deductible for each and
every loss occurrence as set out in the Schedule(s).

The sum recoverable under this Reinsurance Agreement shall be up to but not
exceeding the amount of cover for ultimate net loss on account of each and every
loss occurrence as set out in the Schedule(s), subject however to the provision
for reinstatement as set out in Article 6 of this Reinsurance Agreement.

Additional cover details as described in the attached Schedule(s).

ARTICLE 6                        REINSTATEMENTS
--------------------------------------------------------------------------------

Each loss reduces the amount of the cover hereunder, however the amount
exhausted shall be automatically reinstated from the time of commencement of the
loss occurrence to the next expiry date of this Reinsurance Agreement.

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 3
--------------------------------------------------------------------------------

An additional premium calculated at the rate set out in the Schedule(s), shall
be paid by the Reinsured based only upon the amount of such recovery.
Nevertheless the Reinsured's liability shall never be more than the amount of
cover set out in the Schedule(s) in respect of any one loss occurrence and no
more than the annual limit of cover set out in the Schedule(s) in all during any
period of twelve months in which the Reinsurance Agreement is in force.

ARTICLE 7               DEFINITION OF "ULTIMATE NET LOSS"
--------------------------------------------------------------------------------

The term "ultimate net loss" shall mean the sum actually paid by the Reinsured
in respect of each and every loss occurrence, including loss expenses. The term
"loss expenses" shall include all the amounts paid for actions, suits or
proceedings and for other matters and things relating to any loss recoverable
hereunder at the discretion of the Reinsured which in its judgement may be
beneficial or expedient and all payments made and costs and expenses incurred
therefor shall be considered. It is furthermore agreed that an allowance may be
included for salaried adjusters or other salaried officials or employees
diverted from their normal duties in connection with the loss hereunder.
Salvages and recoveries, including recoveries from all other reinsurances, other
than the underlying layer(s) of excess of loss reinsurance, shall be deducted
from such loss to arrive at the amount of liability, if any, attaching
hereunder.

All salvages, recoveries or payments recovered or received subsequent to any
loss settlement hereunder shall be applied as if recovered or received prior to
the aforesaid settlement, and all necessary adjustments shall be made by the
parties hereto.

Nothing in the clause shall be construed to mean that losses are not recoverable
hereunder until the Reinsured's ultimate net loss has been ascertained.

ARTICLE 8                DEFINITION OF "LOSS OCCURRENCE"
--------------------------------------------------------------------------------

For the purposes of this Reinsurance Agreement the term "loss occurrence" shall
consist of the sum of all individual insured losses which result from an
accident, disaster, casualty or happening or series of accidents, disasters,
casualties or happenings arising out of one event having the same proximate
cause, regardless of the number of interests insured or the number of policies
responding and which occur during a loss period of:

a)       72 consecutive hours as regards hurricane, typhoon, windstorm,
         rainstorm, hailstorm and/or tornado

b)       72 consecutive hours as regards earthquake, seaquake, tidal wave and/or
         volcanic eruption

c)       72 consecutive hours and within the limits of one City, Town or Village
         as regards riots, civil commotions and malicious damage

d)       72 consecutive hours as regards any "loss occurrence" which includes
         individual loss or losses from any of the perils mentioned in (a), (b)
         and (c) above

e)       168 consecutive hours as regards flood, however caused

d)       168 consecutive hours as regards any "loss occurrence" which includes
         individual loss or losses from any of the perils mentioned in (a) or
         (b) or (c) or (d) above when in combination with individual loss or
         losses from any of the peril mentioned in (e) above

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 4
--------------------------------------------------------------------------------

g)       168 consecutive hours as regards any "loss occurrence" of whatsoever
         nature which does no include individual loss or losses from any of the
         perils mentioned in (a), (b) and (c), (d), (e), or (f) above

and no individual loss from whatever insured peril which occurs outside these
periods or areas shall be included in that "loss occurrence".

The Reinsured may choose the time when any such period of consecutive hours
commences and if any event is of greater duration than the above-mentioned
periods, the Reinsured may divide that event into two or more "loss
occurrences", provided that no two periods overlap and provided no such period
commences earlier than the date and time of the happening of the first recorded
individual loss to the Reinsured in respect of the event in question.

ARTICLE 9                     NET RELATED LINES
--------------------------------------------------------------------------------

This Reinsurance Agreement shall only protect that portion of any business which
the Reinsured, acting in accordance with its established practice, retains net
for its own account.

The Reinsured's maximum retention each and every risk for own account shall not
exceed the amount as set out in the Schedule(s). As regards the definition of
"each and every risk", the Reinsured shall be the sole judge of what constitutes
one risk, however this shall not differ from the written Underwriting guidelines
of the Reinsured in this respect.

The liability of the Reinsurer hereunder shall not be increased due to an error
or omission which results in an increase in the Reinsured's normal net
retention, nor by the Reinsured's failure to reinsure in accordance with its
normal practice, nor by the inability of the Reinsured to collect from any other
reinsurers any amounts which may have become due from them, whether such
inability arises from the insolvency of such reinsurers or otherwise.

ARTICLE 10                    UNDERWRITING POLICY
--------------------------------------------------------------------------------

The Reinsured undertakes not to introduce any change in its established
acceptance and underwriting policy in respect of the classes of business
protected under this Reinsurance Agreement without prior approval by the
Reinsurer and any reinsurance arrangement related thereto shall be maintained or
deemed to be maintained unaltered for the purpose of this Reinsurance Agreement.

ARTICLE 11                    REINSURANCE PREMIUM
--------------------------------------------------------------------------------

The Reinsured shall pay to the Reinsurer the reinsurance premium(s) as set out
in the Schedule(s).

The term "premium income" shall mean the gross retained written premium income
accounted by the Reinsured in the classes of business protected under this
Reinsurance Agreement during the twelve month period for which the excess of
loss premium is being calculated, less cancellations and return premiums as well
as premiums paid for reinsurance which is to the benefit of this Reinsurance
Agreement or as specified in the Schedule(s).

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 5
--------------------------------------------------------------------------------

ARTICLE 12                           TAXES
--------------------------------------------------------------------------------

As original and/or as per attached Schedule(s).

ARTICLE 13                       CLAIM ADVICES
--------------------------------------------------------------------------------

The Reinsured shall advise any claim to the Reinsurer immediately on receiving
knowledge thereof, if the estimated amount of any such claim exceeds the claim
advice amount as set out in the Schedule(s). Such claim advices shall contain
also an estimate of the Reinsurer's liability and indicate the amounts paid and
reserved. The Reinsured shall keep the Reinsurer fully informed of any
significant developments in respect of the advised claim(s).

The Reinsured shall supply the Reinsurer with a list of outstanding claims at
the end of each accounting year, however not later than 25 days after this date.
In respect of these claims, the date of the loss event as well as the breakdown
into the paid and outstanding amount for each claim must be provided.

ARTICLE 14                       CLAIM PAYMENTS
--------------------------------------------------------------------------------

All loss settlements made by the Reinsured, provided these are within the terms
of the original policies and with the terms of this Reinsurance Agreement, shall
be unconditionally binding upon the Reinsurer and amounts falling to the share
of the Reinsurer shall be payable by him upon reasonable evidence of the amount
paid or shortly due for payment being given by the Reinsured. The Reinsurer
shall have the right to deduct any outstanding balances due to him from the
Reinsured from any loss payment.

ARTICLE 15          ACCOUNTING AND SETTLEMENT OF THE BALANCE
--------------------------------------------------------------------------------

The accounts have been drawn up as instructed by the Reinsurance Accounting
Division of the Reinsurer, and as set out in the Schedule(s).

The settlement of the balances has to be effected as set out in the Schedule(s)
and coordinated via the Treasury Department of the Reinsurer.

ARTICLE 16                    ERRORS AND OMISSIONS
--------------------------------------------------------------------------------

It is hereby understood and agreed that any inadvertent delays, omissions or
errors made in connection with this Reinsurance Agreement shall not be held to
relieve either of the parties hereto from any liability which would have
attached to them hereunder if such delay, omission or error had not occurred
provided that rectification is made upon discovery.

ARTICLE 17                    EXTENDED EXPIRATION
--------------------------------------------------------------------------------

If this Reinsurance Agreement should expire or be terminated while a loss
occurrence covered hereunder is in progress it is understood and agreed that,
subject to the other conditions of this Reinsurance Agreement, the Reinsurer
hereon is responsible as if the entire loss or damage had occurred prior to the
expiration of this Reinsurance Agreement, provided that no part of that loss

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 6
--------------------------------------------------------------------------------

occurrence is claimed against any renewal of this Reinsurance Agreement. This
condition shall however not apply to liability losses affecting multiple years.

ARTICLE 18                     ACCESS TO RECORDS
--------------------------------------------------------------------------------

The Reinsurer or their designated representatives shall have free access at any
reasonable time to all records of the Reinsured which pertain in any way to this
Reinsurance Agreement.

ARTICLE 19                   IMMEDIATE TERMINATION
--------------------------------------------------------------------------------

Either party shall have the right to terminate this Reinsurance Agreement
immediately by tendering notice of termination upon the other party:

a)       if the performance of this Reinsurance Agreement is rendered impossible
         de Jure or de facto for reasons not the fault of either party;

b)       if the other party becomes unable to pay its debts or is insolvent or
         goes into liquidation or has its authorisation to do business
         withdrawn;

c)       if the other party loses all or part of its paid-up capital;

d)       if either party amalgamates with another company or comes under the
         control of another company;

e)       if the other party fails to fulfil its obligations under this
         Reinsurance Agreement;

f)       if the country in which the other party resides or has its principal
         offices or is incorporated is involved in war in any form whatsoever,
         whether declared or not.

In the event of this Reinsurance Agreement being terminated at any date other
than the last day in December in any one year then the premium due to the
Reinsurer shall be calculated up to the date of termination on a pro rata basis
of the annual reinsurance premium. The rights and obligations of both parties
under this Reinsurance Agreement shall remain in full force until the effective
date of termination. The Reinsurer shall remain responsible for any losses
incurred prior to termination.

Any notice of termination shall be communicated in writing by registered letter,
telex or telegram and addressed to the other party. In the event of an
interruption of communications any notice of termination shall be deemed to take
effect as soon as it is dispatched or submitted for dispatch.

ARTICLE 20                     RATES OF EXCHANGE
--------------------------------------------------------------------------------

In respect of losses in currency(ies) other than that in which the monetary
limit of this Reinsurance Agreement is stated, the losses will be converted into
this currency by using the exchange rate(s) in force on the date the settlement
with the insured is affected (outstanding loss amounts at year end to be
converted as per the exchange rates in the Reinsured's books).

It is furthermore understood that the Reinsured's maximum retentions are
expressed in the currency of the monetary limit of this Reinsurance Agreement or
the equivalent in other currencies at the exchange rate ruling in the
Reinsured's books on the commencement date of each year the Reinsurance
Agreement is in force.

ARTICLE 21                        ARBITRATION
--------------------------------------------------------------------------------

Any disputes arising out of this Reinsurance Agreement or concerning its
interpretation or validity shall be resolved on a friendly basis and in
accordance with current reinsurance practice rather than

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 7
--------------------------------------------------------------------------------

strictly according to the letter of the law. All such disputes shall be referred
to a Court of Arbitration which will take place in Winterthur and which shall
consist of two arbitrators, one to be appointed by each party, and an umpire who
shall be appointed by the arbitrators before they have studied the case
material. The arbitrators and the umpire shall be active or retired officials of
companies or underwriters carrying on a similar type of insurance and/or
reinsurance business to that protected hereunder.

If either party fails to appoint an arbitrator within four weeks after being
requested in writing by the other party to do so, or in the event of the
arbitrators failing to agree as to the appointment of the umpire within an
identical period after their own appointment, such arbitrator or umpire shall be
appointed by the Upper Court of the Canton of Zurich.

The procedure shall be at the discretion of the Court of Arbitration, whereby it
shall dispense as far as possible with all legal formalities. It shall pronounce
on the distribution between the parties of costs and charges. The ruling of the
Court of Arbitration shall be in writing, stating the reasons for its decision
and be signed. If one of the arbitrators refuses to sign the decision, this
shall have no bearing on its validity.

The decision shall be reached within three months after the Court of Arbitration
is constituted.

Otherwise the stipulations of the law of Switzerland shall be applicable to the
Reinsurance Agreement.

ARTICLE 22                       INDEX CLAUSE
--------------------------------------------------------------------------------

It is agreed that the amounts of deductible and cover shall be adjusted by the
index as set out in the Schedule(s).

In respect of any loss settlement(s) made under this Reinsurance Agreement the
Reinsured shall submit a list of payments comprising such loss settlement(s)
indicating the amount(s) paid and the date(s) of payment. The amount of each
such payment shall be adjusted by means of the following formula:

actual                        base index                         adjusted
amount           X  ------------------------------     =      payment
of payment           index on the date of payment                value

The above formula shall however only apply in respect of those payments where
there is a variation of more than 10% as between the base index and the index on
the date of payment. In respect of all other payments the "adjusted payment
value" shall always be equal to the "actual amount of payment".

All actual payments and adjusted payment values shall be separately totalled and
the amounts of deductible and cover shall then be multiplied by the following
fraction:

                            total of actual payments
                        --------------------------------
                        total of adjusted payment values

ARTICLE 23                 OTHER TERMS AND CONDITIONS
--------------------------------------------------------------------------------

As set out in the Schedule(s).

<PAGE>

General Conditions: WI Catastrophe Excess of Loss
Reinsurance Agreement 2000                                                Page 8
--------------------------------------------------------------------------------

Drawn up in duplicate and signed

in Winterthur, Switzerland, on                 and in on

for and on behalf of                           for and on behalf of
the REINSURED                                  the REINSURER

VITODURUM INSURANCE COMPANY
WINTERTHUR SWITZERLAND

<PAGE>

REINSURANCE SLIP
WINTERTHUR INTERNATIONAL CATASTROPHE EXCESS OF LOSS REINSURANCE
AGREEMENT 2000
--------------------------------------------------------------------------------

REINSURED                Vitodurum Insurance Company, Winterthur, on behalf of:
                         Winterthur Swiss Insurance Company, Winterthur
                         Switzerland including their branch offices,
                         subsidiaries and company groups

REINSURER                Winterthur Swiss Insurance Company
                         Winterthur, Switzerland

PERIOD OF REINSURANCE    12 months as from 1st April 2000 standard local time
AGREEMENT                at this location of the risk; Basis: Losses occurring
                         during the period of reinsurance.

                         In case of non-renewal of this reinsurance agreement,
                         policies in force will be covered until natural expiry
                         at an additional premium to be agreed.

BUSINESS COVERED         All property Damage and Business Interruption and the
                         Property part of Multiline business, including
                         original, written by the Winterthur International
                         Division in Winterthur and/or its units in the
                         Winterthur Group.

EXCLUSIONS               -Reinsurance Treaty business other than Captive
                          Business
                         -War, Civil War
                         -Nuclear Energy Risks Exclusion Clause (Reinsurance)
                          (1994), worldwide excluding U.S. and Canadian Business
                         -Nuclear Incident Exclusion Clause - Property - USA -
                          Reinsurance and Nuclear Incident Exclusion Clause -
                          Liability - USA - Reinsurance for U.S. Business
                         -Nuclear Incident Exclusion Clause - Property -
                          Canada - Reinsurance and Nuclear Incident Exclusion
                          Clause - Liability - Canada - Reinsurance for Canadian
                          Business
                         -Oil/Petrochemical risks, written as such
                         -Underground mining, written as such
                         -Off Shore Risks
                         -Swiss Re Market Standards for Property Business as per
                          Attachment A.
                         -Other exclusions as per the existing Multiline Quota
                          Share Reinsurance Agreement.

<PAGE>

WI CATASTROPHE XL                                                         Page 2
--------------------------------------------------------------------------------

TERRITORIAL SCOPE        Worldwide as original

REINSURING CLAUSE

Reinsurer's Share        100% of 600%

Amount of Deductible     CHF 30,000,000
in respect of each and
every loss occurrence

Amount of Cover in       CHF 270,000,000
respect of each and
every loss occurrence

REINSTATEMENTS

Additional Premium       100% of CHF 8,325,000 (45% of CHF 18,500,000
                         pro-rata amount only

Amount of Cover in       CHF 270,000,000
respect of each and
every loss occurrence

Limit of Cover During    CHF 540,000,000
any one period

NET RETAINED LINES

Reinsured Maximum        PROPERTY DAMAGE AND BUSINESS INTERRUPTION:
Retention                CHF 200,000,000 Probable Maximum Loss or Loss Limit any
                         one risk (any one location and/or policy(ies) and/or
                         program) protected by the Property Excess of Loss which
                         is deemed to be in place.
                         PROPERTY PART OF MULTILINE:
                         CHF 200,000,000 Probable Maximum Loss or Loss Limit any
                         one risk (any location and/or policy(ies) and/or
                         program) protected by the Multiline Excess of loss
                         which is deemed to be in place.

                         Deficiencies due to the occurrence limit cannot be
                         included in the ultimate net loss hereunder.

REINSURANCE PREMIUM      Flat Premium of CHF 8,325,000 (45% of CHF 18,500,000).

                         Should the actual Gross Net Earned Premium Income
                         (Property business only) deviate by more than 10% of
                         the estimated figure (CHF 154,552,500 for the period

<PAGE>

WI CATASTROPHE XL                                                         Page 3
--------------------------------------------------------------------------------

                         1st April, 2000 to 31st March, 2000), the flat premium
                         will be adjusted at 5.39%.

                         Payable quarterly in equal installments on 30th June,
                         30th September, 31st December and 31st March.

Claim Advices            CHF 15,000,000

Other Terms and
Conditions               In exceptional cases special acceptance can be a
                         granted by the leading reinsurer.

                         Flood Netherlands limited to CHF 150,000,000 any one
                         loss occurrence (from ground-up).

                         Other terms and conditions as per the existing
                         Multiline Quota Share Reinsurance Agreement.

                         Other clauses (Ultimate Net Loss, Definition of Loss
                         Occurrence, Extended Expiration, Currency Fluctuation,
                         etc.) as per our standard reinsurance wording.

Drawn up in duplicate and signed
in, Winterthur, Switzerland, on 17.4.00       and in Winterthur, Switzerland
                                              on 04, April, 2000

for and on behalf of                          for and on behalf of
the REINSURED.                                the REINSURER

VITODURUM INSURANCE COMPANY                   WINTERTHUR SWISS INSURANCE COMPANY
WINTERHUR, SWITZERLAND                        WINTERTHUR, SWITZERLAND

/s/                                           /s/
----------------------------------            ----------------------------------

Ref. No. PAS2144

<PAGE>

                                                               [WINTERTHUR LOGO]

WINTERTHUR INTERNATIONAL RUN-OFF PROTECTION
--------------------------------------------------------------------------------

It is hereby noted and agreed that the following amendments and terms and
conditions attach to and form part of the Reinsurance Slip Winterthur
International Catastrophe Excess of Loss Agreement 2000, which was ceded from
Winterthur International (WIRE).

REINSURED                XL Winterthur International, Winterthur, Switzerland

PERIOD OF REINSURANCE    12 months as from 1st July 2001 standard local time at
AGREEMENT (ARTICLE 1)    the location of the risk; Losses occurring during the
                         period of reinsurance.

BUSINESS COVERED         All Property Damage and Business Interruption and
(ARTICLE 2)              the Property part of Mulitline business, including
                         perils as original, written as from 1st April 2000 up
                         to 30th June 2001 by the Market Unit Winterthur
                         International in Winterthur and/or its units in
                         Winterthur Insurance.

REINSURER'S SHARE        100% OF 60%
(ARTICLE 5)

REINSURANCE PREMIUM      Flat Premium of CHF 32,500,000
(ARTICLE 11)             (CHF 19,500,000 for 60%)

                         Payable as follows:
                         CHF 10,000,000 for 60% on 1st September 2001
                         CHF 4,625,000 for 60% on 1st December 2001
                         CHF 4,875,000 for 60% on 1st April 2002

All other terms and conditions as per the Reinsurance Slip Winterthur
International Catastrophe Excess of Loss Agreement 2000.

Drawn up in duplicate and signed

in Winterthur, Switzerland, on 02/05/02       and in Witherthur, Switzerland,
                                             on 02 May 2002

for and on behalf of                         for and on behalf of
the REINSURED                                the REINSURER

XL WINTERTHUR INTERNATIONAL                  WINTERTHUR SWISS INSURANCE COMPANY
WINTERTHUR, SWITZERLAND                      WINTERTHUR, SWITZERLAND

/s/                                           /s/
----------------------------------            ----------------------------------

<PAGE>

                                   SCHEDULE D

The definition of "Reserves" in the SPA shall be amended by replacing the final
sentence thereof with the following sentence:

       "In determining the Initial Net Reserves Amount and the Seasoned Net
       Reserves Amount, the unearned premium reserve shall be calculated net of
       reinsurance prepaid prior to 30 June 2001, which net amount shall then be
       adjusted to be equal to 71% of such net amount."

<PAGE>

                                   SCHEDULE E

                                 TRANSFER NOTICE

                    [LETTERHEADS OF WINTERTHUR XL INSURANCE]

Clifford Chance LLP
10 Upper Bank Street
London
E14 5JJ

Attention: Katherine Coates and Norman Thomas

[Date]

SALE AND PURCHASE OF WINTERTHUR INTERNATIONAL

We, Winterthur Swiss Insurance Company ("WINTERTHUR") and XL Insurance (Bermuda)
Ltd, formerly known as XL Insurance Ltd, ("XL INSURANCE") refer to the second
amended and restated sale and purchase agreement dated as of 15 February 2001
made between us for the sale and purchase of Winterthur International (the
"SPA") and the Payment Agreement dated 24 July 2001 made between Winterthur, XL
Insurance and Clifford Chance LLP (the "PAYMENT AGREEMENT").

Capitalised terms in this Transfer Notice have the same meaning as set out in
the Payment Agreement or the SPA unless otherwise defined herein.

Clauses 3.3.1 and 5.1 of the Payment Agreement set out the conditions precedent
to the release of the Retention Amount and the Income (the "CONDITIONS
PRECEDENT") and Clause 3.3.2 of the Payment Agreement sets out the payments to
be made by you following satisfaction of the Conditions Precedent.

We hereby confirm that the Conditions Precedent have been deemed to have been
satisfied or have been waived and that we wish you to make payments otherwise
than as set out in Clause 3.3 of the Payment Agreement. Consequently, we wish
you to implement the payment instructions set out below notwithstanding the
fact that:

       i.     the Conditions Precedent have not been satisified (although
              Purchase Price and the allocation thereof have been agreed between
              Winterthur and XL Insurance);

       ii.    the payments instructed hereby are not in conformity with the
              terms of the Payment Agreement; and

       iii.   this Transfer Notice is not in the form scheduled to the Payment
              Agreement.

We hereby instruct you to pay the amount held by you in the Designated Account
together with an amount equal to any tax credit attaching thereto (less any tax
for which you may have to account or any

<PAGE>

charges and expenses incurred by you) in the proportions set out below and in
accordance with the payment details set out below.

For the account of Winterthur:

PROPORTION: 25.15768% in respect of the Retention Amount and 12.57884% in
            respect of the Income.

METHOD OF PAYMENT:

BANK:

ACCOUNT NAME:

ACCOUNT NUMBER:

REFERENCE:

ACCOUNT:

For the Account of XL Insurance:

PROPORTION: 74.84232% in respect of the Retention Amount and 87.42116% in
            respect of the Income.

METHOD OF PAYMENT:

BANK:

ABA NO.

SWIFT CODE:

DDA NO.

FOR CREDIT:

ACCOUNT NAME:

ACCOUNT NUMBER:

This Transfer Notice (which may be signed in any number of counterparts each of
which shall be deemed an original) amends the terms of the Payment Agreement,
but only to the extent set out above. Except as expressly provided herein, this
Transfer Notice shall not alter any rights or obligations of any party under the
Payment Agreement or the SPA.

This Transfer Notice is governed by the laws of England and Wales.

<PAGE>

Please confirm, acknowledge and agree to the above by signing and returning a
copy of this Transfer Notice.

Your faithfully,

__________________________________________________
Print name:

For and on behalf of XL Insurance (Bermuda) Limited

__________________________________________________
Print name:

For and on behalf of Winterthur Swiss Insurance Company

__________________________________________________
Print name:

For and on behalf of Clifford Chance LLP.

<PAGE>

                        SCHEDULE F - SRA AMENDMENT LETTER

XL Insurance
One Bermudiana Road
Hamilton
Bermuda

- and -

Vitodorum Reinsurance Company (Formerly Called
Winterthur International)
[Address]

for the Attention of Paul Giordano

December 2003

SELLERS RETROCESSION AGREEMENTS
--------------------------------------------------------------------------------

Dear Sirs,

We refer to the second amended and restated agreement for the sale and purchase
of Winterthur International (the "SPA") made between us and dated as of 15
February 2001. Capitalised terms in this letter agreement shall have the meaning
as set out in the SPA unless otherwise defined in this letter agreement.

In relation to Article 5 of each of (i) the Sellers Retrocession Agreement (in
respect of the period to 31 December 2000) dated 24 July 2001 and made between
Winterthur International (Re) and Winterthur; and (ii) the Amended and Restated
Sellers Retrocession Agreement (in respect of the period to 30 June 2001) dated
8 February 2002 and made between Winterthur International (Re) and Winterthur
(collectively defined as the "SRAs"), we ask you to agree:

1.       to the insertion of the following at the end of the first sentence
         immediately after the phase "31.12.2000 Financial Statements)":

         "provided that from and after agreement or determination (whichever is
         earlier) of the Seasoned Net Reserves Amount but with effect from 30
         June 2004 the "ultimate net loss" in respect of losses shall not exceed
         the sum provided for in respect of such losses in the agreed or
         determined Seasoned Net Reserves Amount except that such excess shall
         form part of the "ultimate net loss" to the extent that it is due to
         (i) non recoverability of reinsurance receivables or collectables; (ii)
         collected reinsurance which has since become repayable; or (iii)
         additional sums payable to reinsurers which arise out of discussions as
         to the valuation of reinsurance receivables, in each case, to the
         extent included as part of the agreed or determined Seasoned Net
         Reserves Amount.

<PAGE>

         To the extent that the amounts of any payments made under this
         Reinsurance Agreement between 30 June 2004 and the date of agreement or
         determination of the Seasoned Net Reserves Amount would not have been
         required to be paid pursuant to the previous paragraph if the Seasoned
         Net Reserves Amount had been agreed or determined at that time, such
         amounts shall be repaid to the party that made such payment in cash
         within five Business Days of such agreement or determination together
         with interest at a non-compounding rate per annum of 0.5 per cent above
         Base Rate.

and

2.       to amend the third paragraph of Article 5 as follows:

(i)      so that "in such case" reads "in case of either (i) or (iii) of this
         paragraph";

(ii)     so that the following words are included at the end of the paragraph
         "or under the Seasoned Net Reserves Payment".

Clause 19 of the SRAs applies to this letter agreement.

Kindly consent to the above by signing and returning a copy of this letter
agreement.

Yours faithfully,

-----------------------------------------------------------
For and on behalf of "Winterthur" Swiss Insurance Company

-----------------------------------------------------------
For and on behalf of XL Insurance (Bermuda) Ltd

-----------------------------------------------------------
For and on behalf of Vitodorum Reinsurance Company

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