ANNUITY & LIFE RE HOLDINGS LTD
RETROCESSION AGREEMENT LROOOO2A00
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>28
<FILENAME>w85495exv10w46.txt
<DESCRIPTION>RETROCESSION AGREEMENT LROOOO2A00
<TEXT>
<PAGE>
                                                                   Exhibit 10.46

                                               MATERIAL IN
                                               THIS DOCUMENT HAS BEEN OMITTED
                                               PURSUANT TO A CONFIDENTIALITY
                                               REQUEST. OMITTED MATERIALS HAVE
                                               BEEN FILED SEPARATELY WITH THE
                                               COMMISSION.



ANNUITY AND LIFE REASSURANCE LTD.
CUMBERLAND HOUSE                                                               1
1 VICTORIA STREET
HAMILTON HM 11
BERMUDA

RETROCESSION AGREEMENT
OLD MUTUAL IMMEDIATE ANNUITIES

LR00002A00
<PAGE>

RECITALS

INTRODUCTION

This Agreement is between ANNUITY AND LIFE REASSURANCE LTD., a company
incorporated in Bermuda and whose registered office is at Cumberland House, 1
Victoria Street, Hamilton HM 11, Bermuda (hereinafter, "the Retrocessionaire")

And XL MID OCEAN REINSURANCE LTD, a company incorporated in Bermuda and whose
registered office is at Wessex House, 45 Reid Street, PO Box HM 1066, Hamilton
HM EX, Bermuda (hereinafter, "XL Mid Ocean")

The Agreement Number is LR00002A00

                                                                               2

<PAGE>

MASTER AGREEMENT

1 INTRODUCTION

1.1      This Agreement is made between the Parties identified in the Recitals.

1.2      This Agreement consists of the Recitals, the Master Agreement and the
         Schedules.

1.3      XL Mid Ocean agrees to retroceed, and the Retrocessionaire agrees to
         accept, the Business Covered by this Agreement on the terms and
         conditions of this Agreement.

2 DEFINITIONS

2.1      The following definitions are used in this Agreement and are defined
         below:

<TABLE>
<S>                                    <C>
------------------------------------------------------------------------------------------------------------------------------------
Account                                The accounts to be submitted to the Retrocessionaire by XL Mid Ocean in accordance with
                                       clause 6.

------------------------------------------------------------------------------------------------------------------------------------
Account Balance                        The amount of the Claims less the Retrocession Premiums at the last Account Settlement Date.

------------------------------------------------------------------------------------------------------------------------------------
Account Notification Date              The date on which XL Mid Ocean's Appointed Actuary notifies the Retrocessionaire that he has
                                       reviewed and accepted the Benefit Payments under the Reinsurance Agreement for the period
                                       up to the last Pre-Payment Date.

------------------------------------------------------------------------------------------------------------------------------------
Account Settlement Date                15 Business Days after the Account Notification Date.

------------------------------------------------------------------------------------------------------------------------------------
Settlement Date Agreement              The terms and conditions set out in this document and the Recitals and the Schedules attached
                                       to this agreement.

------------------------------------------------------------------------------------------------------------------------------------
Appointed Actuary                      An actuary appointed by either the Retrocessionaire or XL Mid Ocean in accordance with the
                                       relevant legislation governing the appointment of an actuary in Bermuda.

------------------------------------------------------------------------------------------------------------------------------------
Base Rate                              The base rate publicly quoted as such by Barclays Bank plc, London, UK.

------------------------------------------------------------------------------------------------------------------------------------
Benefit Payments                       The payments made by XL Mid Ocean under the terms of the Reinsurance Agreement.

------------------------------------------------------------------------------------------------------------------------------------
Business Covered                       The Retrocessionaire's Share of the Benefit Payments for the closed portfolio of immediate
                                       annuity policies as described in the Reinsurance Agreement.

------------------------------------------------------------------------------------------------------------------------------------
Business Day                           Any day of the week excluding Saturdays and Sundays and any other day officially recognised
                                       as a public holiday in the United Kingdom or Bermuda.

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                               3

<PAGE>

<TABLE>
<S>                                    <C>
------------------------------------------------------------------------------------------------------------------------------------
Claims                                 The Claims as defined in clause 5.

------------------------------------------------------------------------------------------------------------------------------------
Effective Date                         17 December 1999.

------------------------------------------------------------------------------------------------------------------------------------
GBP                                    The lawful currency for the time being of the United Kingdom.

------------------------------------------------------------------------------------------------------------------------------------
Late Payment Interest Rate             The yearly rate of 2% above the Base Rate or any comparable rate in use should the Base Rate
                                       cease to be published.

------------------------------------------------------------------------------------------------------------------------------------
Parties                                The signatories to this Agreement as specified in the Recitals and 'Party' shall mean any one
                                       of them as the context may indicate.

------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Date                       The Pre-Payment Date as defined in the Reinsurance Agreement.

------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Period                     The Pre-Payment Period as defined in the Reinsurance Agreement.

------------------------------------------------------------------------------------------------------------------------------------
Reinsurance Agreement                  The Reinsurance Agreement LT00023A99 appended to this Agreement in Schedule 1, between Old
                                       Mutual Life Assurance Company Limited and XL Mid Ocean.

------------------------------------------------------------------------------------------------------------------------------------
Retrocessionaire                       Annuity and Life Reassurance Ltd.

------------------------------------------------------------------------------------------------------------------------------------
Retrocession Premiums                  The Retrocession Premiums as defined clause 4.

------------------------------------------------------------------------------------------------------------------------------------
Retrocession Premium Rates             The table of Retrocession Premium Rates appended to this Agreement in Schedule 3.

------------------------------------------------------------------------------------------------------------------------------------
Retrocessionaire's Share               35%

------------------------------------------------------------------------------------------------------------------------------------
Schedules                              The Schedules attached to this Agreement.

------------------------------------------------------------------------------------------------------------------------------------
Security Agreement                     The Security Agreement, appended to this Agreement in Schedule 2, which was executed
                                       between Old Mutual Life Assurance Company Limited and XL Mid Ocean in accordance with the
                                       Reinsurance Agreement.

------------------------------------------------------------------------------------------------------------------------------------
XL Mid Ocean                           XL Mid Ocean Reinsurance Ltd.

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

2.2      Headings in this Agreement are inserted for convenience only and shall
         not be taken into account in its interpretation.

2.3      Where applicable, the provisions of clause 2.1 shall impose substantive
         obligations on the Parties as provided in the provision concerned.

                                                                               4

<PAGE>

2.4      Any reference to:-

         i)       the singular includes plural and vice versa;

         ii)      a natural person includes legal persons and vice versa;

         iii)     a gender includes other genders; and

         iv)      a clause, paragraph or schedule, unless the context otherwise
                  requires, is a reference to a clause or paragraph of, or
                  Schedule to, this Agreement.

2.5      Words and expressions defined in any sub-clause shall, for the purposes
         of the clause of which that sub-clause forms part, bear the meaning
         assigned to such words and expressions in that sub-clause.

2.6      A document in the "agreed form" is a reference to a document in a form
         approved and for the purposes of identification initialled by or on
         behalf of each Party.

3     RETROCESSION

3.1      XL Mid Ocean agrees to cede and the Retrocessionaire agrees to accept
         the Business Covered with effect from the Effective Date according to
         the terms of this Agreement.

3.2      The Retrocessionaire hereby agrees to be liable according to the terms
         of this Agreement and will follow the fortunes and settlements of XL
         Mid Ocean in respect of the Business Covered, except that:

3.2.1        The Retrocessionaire does not indemnify and shall not be liable for
             any extracontractual damages or liability of any kind whatsoever of
             XL Mid Ocean's resulting from, but not limited to: negligent,
             reckless or intentional wrongs; fraud; oppression; bad faith; or
             strict liability.

3.2.2        XL Mid Ocean will advise the Retrocessionaire of its intention to
             contest, compromise, or litigate benefit payments involving
             annuities reinsured hereunder. The Retrocessionaire may pay its
             Retrocessionaire's Share of the Unusual Expenses of such contests,
             in addition to its share of benefit payments, or it may choose not
             to participate. Unusual Expenses exclude routine investigative and
             administrative expenses, including salaries of home office
             personnel and interpleader expenses. If the Retrocessionaire
             chooses not to participate, it will discharge its liability by
             payment to XL Mid Ocean of the full amounts of its liability, prior
             to any contests, on the annuity reinsured hereunder. Any decision
             by the Retrocessionaire not to participate must be communicated to
             XL Mid Ocean within 60 days after receipt from XL Mid Ocean of
             their advice to contest, compromise, or litigate benefit payments
             hereunder.

3.3      The Retrocessionaire's liability in respect of the Business Covered
         will commence on the Effective Date and liability will cease as
         contemplated in clause 9.1.

                                                                               5

<PAGE>

3.4      The reinsurance of the Business Covered, as contemplated in clause 3.1,
         is a retrocession of a closed book and is limited solely to the
         Business Covered as defined in this Agreement and shall not apply to
         any other business of XL Mid Ocean.

4       RETROCESSION PREMIUMS

4.1      Retrocession Premiums are payable in accordance with the table of
         Retrocession Premium Rates appended to this Agreement in Schedule 3.

4.2      The Retrocession Premium Rates are fixed and may not be amended other
         than as contemplated in clause 14.

4.3      Retrocession Premiums are payable from the Effective Date until this
         Agreement is terminated as contemplated in clause 9.

4.4      Retrocession Premiums are payable by XL Mid Ocean to the
         Retrocessionaire on the Account Settlement Date in respect of the
         relevant Pre-Payment Period.

5       CLAIMS

5.1      The Retrocessionaire shall pay to XL Mid Ocean the Retrocessionaire's
         Share of the Benefit Payments from the Effective Date until this
         Agreement is terminated as contemplated in clause 9.

5.2      Claims are payable by the Retrocessionaire to XL Mid Ocean on the
         Account Settlement Date in respect of the relevant Pre-Payment Period.

6       ADMINISTRATION

6.1      XL Mid Ocean shall on each Account Notification Date prepare and
         deliver an Account in such format as the Retrocessionaire may
         reasonably require. If the Retrocessionaire disagrees with the Account
         prepared, such dispute shall be resolved mutatis mutandis in accordance
         with the provisions of clause 10.

6.2      Responsibility for the costs associated with the administration of the
         Business Covered rests solely with XL Mid Ocean. This includes, but is
         not restricted to, maintaining appropriate records, verifying that
         benefits are being paid in accordance with the Reinsurance Agreement
         and the provision of information to the Retrocessionaire in accordance
         with clause 6.1 and/or clause 7, as the case may be.

6.3      All payments made by XL Mid Ocean are binding on the Retrocessionaire,
         provided any such payments are in respect of the Business Covered and
         are made strictly in accordance with the relevant terms of the
         Reinsurance Agreement and do not violate the terms of this Agreement.

6.4      All payments due to or from the Retrocessionaire will be settled in
         cash in GBP and transferred, by means of electronic funds transfer.

                                                                               6

<PAGE>

7       INFORMATION

7.1      XL Mid Ocean shall, upon request from the Retrocessionaire from time to
         time, provide the Retrocessionaire with such information during normal
         business hours in respect of the Business Covered as the
         Retrocessionaire may reasonably request and in such format as the
         Retrocessionaire may reasonably require.

7.2      Except as may be impermissible at law, the Retrocessionaire may appoint
         representatives to inspect, during normal business hours, any relevant
         information under clause 6.1 or this clause 7 and such representatives
         may make copies (at the cost of the Retrocessionaire) of any such
         relevant documents and information, including without limitation any
         such information stored on any computer or in any other electronic
         form.

8       LATE PAYMENT INTEREST

         Any amounts due by either XL Mid Ocean or the Retrocessionaire under
         this Agreement, which are outstanding after the due date for payment
         thereof, will bear interest at the Late Payment Interest Rate from the
         due date to the date of payment (both days inclusive), and which
         interest shall be capitalised monthly in arrears.

9       TERM AND TERMINATION

9.1      This Agreement takes effect from the Effective Date and, unless
         terminated pursuant to the remaining provisions of the clause 9, shall
         remain in force until the natural expiry of the Business Covered.

9.2      XL Mid Ocean or the Retrocessionaire may terminate this Agreement with
         immediate effect by written notice to the other Party on or at any time
         after the performance of the whole or any material part of this
         Agreement being prohibited or rendered impossible in consequence of any
         law, regulation or decision of a regulatory authority; in which event
         the Parties shall use their reasonable endeavours to reach agreement on
         the continuance of this Agreement on whatever basis or the basis upon
         which the retrocession arrangement contemplated by this Agreement will
         be terminated. If the Parties are unable to reach agreement within 30
         Business Days of the date upon which this Agreement becomes prohibited
         or rendered impossible, such dispute shall be determined, mutatis
         mutandis, in accordance with clause 10.

9.3      XL Mid Ocean may terminate this Agreement with immediate effect by
         written notice to the Retrocessionaire on or at any the after the
         Retrocessionaire passes a resolution for its winding up, a court of
         competent jurisdiction making an order for the Retrocessionaire's
         winding up or dissolution, the making of an administration order in
         relation to the Retrocessionaire, the appointment of a receiver over,
         or an encumbrancer taking possession of or selling, all or
         substantially all of the assets of the Retrocessionaire, the
         Retrocessionaire making an arrangement or composition with its
         creditors generally or making an application to a court of competent
         jurisdiction for protection from its creditors generally, upon which
         event the provisions of clause 10.4 shall apply hereto.

9.4      If this Agreement is terminated in accordance with the provisions of
         clause 9.3:

                                                                               7

<PAGE>

9.4.1        The Retrocessionaire's liability under this Agreement in respect of
             the Business Covered shall be calcu1ated pro rata up to and
             including the date of termination; and

9.4.2        The retrocessionaire shall pay an amount equal to 50 times the most
             recent Account Balance save that if this sum should be less than
             zero then no payment will be required from the retrocessionaire.

10      DISPUTE RESOLUTION

10.1     If the Retrocessionaire or its Appointed Actuary does not approve any
         calculation performed by XL Mid Ocean or XL Mid Ocean's Appointed
         Actuary under clause 4 or 5 (or any other dispute which is to be
         determined in accordance with this clause 10) then the remaining
         provisions of this clause 10 shall apply.

10.2     If the Retrocessionaire or its Appointed Actuary does not approve any
         one or more of the calculations performed by XL Mid Ocean or its
         Appointed Actuary, the Retrocessionaire shall deliver a notice in
         writing to XL Mid Ocean, specifying the calculation of which it does
         not approve and setting out in reasonable detail, the basis of the
         objection. Where a dispute is required to be determined elsewhere in
         this Agreement in accordance with this clause 10, either Party shall be
         entitled to deliver a notice to the other Party, setting out the
         details of the dispute in reasonable detail.

10.3     XL Mid Ocean and the Retrocessionaire shall, within 10 Business Days of
         delivery of the notice referred to in clause 10.2 attempt, in good
         faith, to resolve the dispute.

10.4     If the respective Appointed Actuaries of XL Mid Ocean and the
         Retrocessionaire are unable to reach agreement within the time period
         contemplated in clause 10.3, XI, Mid Ocean and the Retrocessionaire
         shall agree upon an independent actuary. If XL Mid Ocean and the
         Retrocessionaire are unable to reach agreement on the identity of the
         independent actuary within a period of 10 Business Days of expiry of
         the period referred to in clause 10.3, such independent actuary shall
         be appointed by the President, for the time being, of the Institute of
         Actuaries in England and Wales.

10.5     XL Mid Ocean and the Retrocessionaire shall make all reasonable
         endeavours to procure that the independent actuary performs the
         disputed calculation within 15 Business Days of his appointment. Any
         calculation undertaken by the independent actuary shall be in his
         capacity as an expert and not as an arbitrator or quasi-arbitrator and
         his decision shall be final and binding on XL Mid Ocean and the
         Retrocessionaire.

10.6     All other disputes and differences between the Reinsurer and the
         Retrocessionaire on which an agreement cannot be reached will be
         decided by arbitration, regardless of the insolvency of either party,
         unless the conservator, receiver, liquidator, or statutory successor is
         specifically exempted from an arbitration proceeding by the Governing
         Law in accordance with clause 12. Either party may initiate arbitration
         by providing written notification to the other party. Such written
         notice shall contain a brief statement of the issue(s), the failure on
         behalf of the parties to reach amicable agreement and the date of
         demand for arbitration. The arbitrators will regard this Agreement from
         the standpoint of practical business and equitable principles rather
         than that of strict law. The arbitrators shall be solely responsible
         for determining what shall be considered and what

                                                                               8

<PAGE>

         procedure they deem appropriate and necessary in the gathering of such
         facts or data to decide such dispute. Both parties agree that the
         decision of the arbitrators is final and binding and that no appeal
         shall be made from that decision. Should either party fail to comply
         with the decision of the arbitrators, the other party shall have the
         right to seek and receive the assistance of an appropriate court to
         enforce the decision of the arbitrators. The costs of the arbitration
         are to be borne equally by both parties unless the arbitrators decide
         otherwise.

10.7     An arbitration panel consisting of three arbitrators will be formed in
         accordance with the provisions of clauses 10.7.1 to 10.7.3 and from
         that point on all other matters whether procedural or factual will be
         decided solely at the discretion of the arbitration panel. Members of
         the arbitration panel must be, or have been, officers of life insurance
         or reinsurance companies other than the two parties to this Agreement
         or any company owned by, or affiliated with, either party.

10.7.1   One of the arbitrators is to be appointed by XL Mid Ocean, another by
         the Retrocessionaire, and they shall select a third before arbitration
         begins. The arbitrators picked by the parties shall be contacted by the
         party that so chose the arbitrator. They may share the notice of
         arbitration letter, this clause of this Agreement and briefly explain
         the nature of the dispute, such as the types of policies involved and
         the reinsurance issues in dispute, so that the candidate may make an
         informed decision as to his/her technical qualifications to serve, but
         no more than that. They should in no way be "canvassing" the candidate
         for his/her sympathies with their side of the dispute, nor take any
         action that would compromise the candidate's impartiality. Should one
         party fail to comply with the notice to arbitrate and fail to select an
         arbitrator within the time allotted below, the other party shall have
         the right to appoint such arbitrator on their behalf. The appointments
         shall be made in the following manner: the Reinsurer and the
         Retrocessionaire shall each present an initial list of five prospective
         arbitrators to the other party within 25 calendar days of the postmark
         on the mailing of the notification initiating the arbitration. The
         Reinsurer and the Retrocessionaire shall select one arbitrator each
         from the list supplied by the other party. Should the selected
         arbitrator decline to serve, another name shall be selected from the
         respective list the entire process of selection of the first two
         arbitrators shall be accomplished within 45 calendar days of the
         postmark on the mailing of the notification initiating the arbitration.
         The party who initiated the list will submit as many additional names
         within 5 calendar days, as necessary, so that at all times there will
         be a pool of five names from which the other party may make its
         selection.

10.7.2   The two arbitrators, once selected, shall then select the third
         arbitrator from the remaining eight names on the two lists within 20
         calendar days of the second arbitrator's date of appointment. Should
         the two arbitrators be unable to agree on a choice for the third
         arbitrator, the remaining eight names shall be placed in a pool and the
         final arbitrator shall be drawn at random from such pool by the two
         arbitrators within 5 additional calendar days from the expiry of the
         date such third arbitrator should have been appointed. If the
         prospective arbitrator so chosen shall decline to serve as the third
         arbitrator, another prospective arbitrator shall be randomly selected
         until the original pool is exhausted. The parties shall continue

                                                                               9

<PAGE>

         to replace the pool within 5 calendar days from the date the last name
         is exhausted, with an additional eight names until an arbitrator is
         found.

10.7.3   Once the panel is selected, the party initiating the arbitration will
         submit in writing it's understanding of the dispute and the outstanding
         issues surrounding such dispute, their attempt(s) to rectify such
         dispute, and their proposed solution to settle the dispute within 20
         calendar days after the final arbitration panel member has been
         selected. The other party shall be provided with a copy of this initial
         statement and shall respond in writing with it's understanding of the
         dispute within 30 calendar days after the final arbitration panel
         member has been selected.

11      NOTICES

11.1     Any notice, request, instruction or other document (notices etc),
         mentioned in this Agreement must be made in writing. Writing includes
         facsimile and other electronic means. Notices etc, must be sent to the
         address of the relevant Parties given in the Recitals, unless another
         address has been agreed in writing between the Parties.

11.2     For the purposes of this Agreement, notices etc, are deemed to have
         been served:

11.2.1   At the time of delivery, if they have been delivered by hand during
         office hours, or

11.2.2   48 hours after posting or 7 days if overseas, if they have been sent by
         post, or

11.2.3   12 hours after transaction confirmation, if they have been sent by
         facsimile or other electronic means.

11.3     However, if service occurs on a weekend or public holiday, the above
         notice periods do not start until the next Business Day.

12      GOVERNING LAW AND JURISDICTION

12.1     This Agreement is governed by, and shall be construed in accordance
         with, Bermudan law.

12.2     Except as contemplated in clause 10, the courts of Bermuda shall have
         exclusive jurisdiction to settle any dispute arising from or connected
         with this Agreement.

12.3     The Parties agree that the documents which start any legal proceedings
         and any other documents required to be served in relation to any such
         proceedings may be served in accordance with the provisions of clause
         16. These documents may, however, be served in any other manner allowed
         by law. This clause applies to all proceedings wherever started.

13      COSTS

         Except where this Agreement provides otherwise, each Party shall pay
         its own costs relating to the negotiation, preparation, execution and
         performance by it of this Agreement and of each document referred to in
         it.

                                                                              10

<PAGE>

14      AMENDMENTS

         No variation in this Agreement will be effective unless evidenced in
         writing and duly signed on behalf of each Party. Variations sent by
         instantaneous means of communication are also effective provided they
         are capable of being shown by means of permanent or retrievable record
         to have been agreed by each Party.

15      GENERAL

15.1    Each Party warrants to the other that it has the power, authority and
        legal right to sign and perform this Agreement and that it has been duly
        authorised by all necessary actions of its directors and constitutes
        valid and binding obligations on it in accordance with this Agreement.

15.2    The failure to exercise or delay in exercising a right or remedy
        provided by this Agreement or by law does not impair or constitute a
        waiver of the right or remedy or an impairment of or a waiver of other
        rights or remedies. No single or partial exercise of a right or remedy
        provided by this Agreement or by law prevents further exercise of the
        right or remedy or the exercise of another right or remedy.

15.3     The Parties rights and remedies contained in this Agreement are
         cumulative and not exclusive of rights or remedies provided by law.

16      ENTIRE AGREEMENT

16.1     This Agreement constitute the entire agreement and supersede any
         previous agreements between the Parties relating to the subject matter
         of this Agreement.

16.2     The Parties acknowledge that they have not relied on or been induced to
         enter into this agreement by a representation other than the warranties
         or otherwise set out in this Agreement.

16.3     Neither Party is liable to the other for a representation that is not
         set out in this Agreement.

16.4     Nothing in this clause 16 shall have the effect of limiting or
         restricting any liability arising as a result of fraud, wilful
         misconduct or wilful concealment.

17      ASSIGNMENT

         Neither Party shall assign or transfer any of its rights under this
         Agreement in whole or in part without the express written consent of
         the other Party.

18      COUNTERPARTS

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

                                                                              11

<PAGE>

EXECUTED BY THE PARTIES

SIGNATORIES

Signed at Hamilton, Bermuda for and on behalf of XL Mid Ocean Reinsurance Ltd.

                                                     Date
                                 XL
                              MID OCEAN
/s/ not legible                  RE                          13th December 2000
---------------

Signed at Hamilton, Bermuda for and on behalf of Annuity and Life Reassurance
Ltd.

                                                     Date

/s/ Richard J. Tucker                                        December 13, 2000
------------------------

/s/ Robert Reale                                             December 13, 2000
------------------------

                                                                              12

<PAGE>

                                   SCHEDULE 1

                       Reinsurance Agreement - LT00023A99

                                                                              13

<PAGE>

OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED

2 BARTLEY WAY

HOOK

HAMPSHIRE RG279XA

UNITED KINGDOM

REINSURANCE AGREEMENT

IMMEDIATE ANNUITIES

LT00023A99

21ST DECEMBER 1999

<PAGE>

RECITALS

INTRODUCTION

This Agreement is between OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED, a company
incorporated in the United Kingdom and whose registered office is at 2 Bartley
Way, Hook, Hampshire, RG27 9XA, United Kingdom (hereinafter, "the Cedant")

And XL MID OCEAN REINSURANCE LTD, a company incorporated in Bermuda and whose
registered office is at Wessex House, 45 Reid Street, PO Box HM 1066, Hamilton
HM EX, Bermuda (hereinafter, "XL Mid Ocean")

The Agreement Number is LT00023A99

The Cedant conducts life assurance and annuity business

It is intended that XL Mid Ocean should provide 100% reinsurance of the Business
Covered and to maintain such reinsurance following transfer of the Business
Covered.

                                      - 2 -

<PAGE>

MASTER AGREEMENT

1.       INTRODUCTION

1.1      This Agreement is made between the Parties identified in the Recitals.

1.2      This Agreement consists of the Recitals, the Master Agreement and the
         Schedules.

1.3      XL Mid Ocean agrees to reinsure, and the Cedant agrees to cede, the
         Business Covered by this Agreement on the terms and conditions of this
         Agreement.

2.       DEFINITIONS

2.1      The following definitions are used in this Agreement and are defined
         below:

<TABLE>
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<S>                                          <C>
Account                                      The accounts to be submitted by the Cedant to XL Mid Ocean reflecting the Pre-Payment
                                             Due, in accordance with clause 9.
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Accrued Investment Return                    The amount (gross of tax) of any interest, dividends or other income and nominal
                                             capital received by the Cedant in respect of the Agreed Assets that would accrue to
                                             Mid Ocean if title to the Agreed Assets had been transferred to XL Mid Ocean at the
                                             close of business on the Business Day prior to the Transfer Date.
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Act                                          The United Kingdom's Insurance Companies Act of 1982.
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Adjusted Accrued Investment Return           The Accrued Investment Return as adjusted by virtue of the acquisition and/or disposal
                                             of Agreed Assets in the period between the Transfer Date and the Deferred Premium
                                             Payment Date pursuant to the Trading Instructions Letter.
------------------------------------------------------------------------------------------------------------------------------------
Adjusted Agreed Assets                       The Agreed Assets as adjusted in the period between the Transfer Date and the Deferred
                                             Premium Payment Date pursuant to the Trading Instructions letter.
------------------------------------------------------------------------------------------------------------------------------------
Adjustment Premium                           [***]
------------------------------------------------------------------------------------------------------------------------------------
Adjustment Premium Payment Date              10 Business days after delivery of the Policy File.
------------------------------------------------------------------------------------------------------------------------------------
Agreed Assets                                The bonds listed in Schedule 'A' of this Agreement.
------------------------------------------------------------------------------------------------------------------------------------
Agreement                                    The terms and conditions set out in this document and the Recitals and
                                             the Schedules attached to this agreement.
------------------------------------------------------------------------------------------------------------------------------------
Annuitant                                    A holder of a Policy.
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</TABLE>

[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
         OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

                                     - 3 -

<PAGE>

<TABLE>
<S>                                        <C>
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Appointed Actuary                          An actuary appointed by either the Cedant in accordance with the Act or XL Mid Ocean in
                                           accordance with the relevant legislation governing the appointment of an actuary in
                                           Bermuda.
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Approved Bond Dealers                      (1) Greenwich NatWest             (3) HSBC
                                               135 Bishopsgate                   Thames Exchange House
                                               London, EC2M 3UR                  10 Queen Street Place

                                           (2) Warburg Dillon Read           (4) Barclays Capital
                                               1 Finsbury Avenue                 5 North Colonnade
                                               London, EC2M 2PP                  Canary Wharf
                                                                                 London, El4 4BB
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Base Rate                                  The base rate publicly quoted as such by Barclays Bank plc.
------------------------------------------------------------------------------------------------------------------------------------
Business Covered                           The closed portfolio of Policies as at the Transfer Date and as listed in the Policy
                                           File.
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Business Day                               Any day of the week excluding Saturdays and Sundays and any other day officially
                                           recognized as a bank holiday in the United Kingdom or Bermuda.
------------------------------------------------------------------------------------------------------------------------------------
Cedant                                     Old Mutual Life Assurance Company Limited.
------------------------------------------------------------------------------------------------------------------------------------
Deferred Premium                           The value of the Agreed Assets, which Agreed Assets will be valued by the Approved Bond
                                           Dealers in accordance with the provisions of clause 6.1, the payment of which is due on
                                           the Transfer Date but which shall be delivered on the Deferred Premium Payment Date as
                                           contemplated in clause 7.2, free of any Encumbrance (as defined in clause 8.2).
------------------------------------------------------------------------------------------------------------------------------------
Deferred Premium Payment Date              The date on which the Adjusted Agreed Assets are delivered to a custodian appointed
                                           by XL Mid Ocean from Lloyds TSB plc, as contemplated in clause 3.
------------------------------------------------------------------------------------------------------------------------------------
Deposit Premium                            The amount of L100.
------------------------------------------------------------------------------------------------------------------------------------
Deposit Taker                              A registered bank nominated for that purpose by XL Mid Ocean in the United Kingdom.
------------------------------------------------------------------------------------------------------------------------------------
Expected Benefit Payments                  The projected benefit payments from the Business Covered over any relevant Pre-Payment
                                           Period, excluding any allowance for mortality, from a relevant Pre-Payment Date, gross
                                           of any tax.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      - 4 -

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>
GBP                                         The lawful currency for the time being of the United Kingdom.
------------------------------------------------------------------------------------------------------------------------------------
Interest Rate                               The yearly rate of 1% above the Base Rate or any comparable rate in use should the Base
                                            Rate cease to be published.
------------------------------------------------------------------------------------------------------------------------------------
Late Payment Interest Rate                  The yearly rate of 2% above the Base Rate.
------------------------------------------------------------------------------------------------------------------------------------
Liability Outgo                             The expected future liability payments from the Business Covered.
------------------------------------------------------------------------------------------------------------------------------------
Parties                                     The signatories to this Agreement as specified in the Recitals and 'Party' shall mean
                                            any one of them as the context may indicate.
------------------------------------------------------------------------------------------------------------------------------------
Policy or Policies                          The annuity contract or contracts issued by the Cedant to individuals, in force and in
                                            payment at the Transfer Date, (but not in respect of any individual who has died before
                                            the Transfer Date and of whose death the Cedant has notice before the date of delivery
                                            of the Policy File).
------------------------------------------------------------------------------------------------------------------------------------
Policy Conditions                           The terms and conditions applicable to each Policy as at the Transfer Date.
------------------------------------------------------------------------------------------------------------------------------------
Policy File                                 The compact disc recording all the Policies to be delivered by the Cedant to XL Mid
                                            Ocean pursuant to clause 9.5.
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Date                            The first pre-payment date is the first Business Day following the Deferred Premium
                                            Payment Date. The second pre-payment date is 1 April 2000. Subsequent pre-payment dates
                                            will follow at intervals equal to the Pre-Payment Period. Should any Pre-Payment Date
                                            fall on a non-Business Day, then the Pre-Payment Date will be the nearest preceding
                                            Business Day.
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Due                             The Pre-Payment Due is an amount due and payable by XL Mid Ocean in respect of any
                                            relevant Pre-Payment Period, being the sum of the Expected Benefit Payments over a
                                            relevant Pre-Payment Period less the current balance on the Pre-Payment Fund as at any
                                            relevant Pre-Payment Date, other than the first Pre-Payment Due contemplated in
                                            clause 9.1.
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Fund                            [***]
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Period                          The first pre-payment period will be from the Transfer Date to 31 March 2000. Subsequent
                                            pre-payment periods will be periods of 3 months in duration thereafter, ending on the
                                            last Business Day of the last month of any such 3 month period.
------------------------------------------------------------------------------------------------------------------------------------
Required Amount                             The Required Amount as defined in the Security Agreement.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

                                      - 5 -



<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>
Schedules                                   The Schedules attached to this Agreement.
------------------------------------------------------------------------------------------------------------------------------------
Security Agreement                          The Security Agreement, in the agreed form, to be executed between the Parties on the
                                            Deferred Premium Payment Date granting a fixed charge over the Agreed Assets in favour
                                            of the Cedant.
------------------------------------------------------------------------------------------------------------------------------------
Subsequent Investment Return                Any Adjusted Accrued Investment Return received by the Cedant after the Deferred
                                            Premium Payment Date.
------------------------------------------------------------------------------------------------------------------------------------
Trading Instructions Letter                 An undertaking by the Cedant and XL Mid Ocean regarding the trading instructions of XL
                                            Mid Ocean entered into by the Parties on the date of this Agreement.
------------------------------------------------------------------------------------------------------------------------------------
Transfer Date                               17 December 1999.
------------------------------------------------------------------------------------------------------------------------------------
Transfer Interest Rate                      [***]
------------------------------------------------------------------------------------------------------------------------------------
Transfer Mortality Basis                    [***]
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Transfer Premium                            [***]
------------------------------------------------------------------------------------------------------------------------------------
Transfer Reserve                            The net present value of the Liability Outgo calculated as at the Transfer Date as more
                                            fully contemplated in clause 6.3.
------------------------------------------------------------------------------------------------------------------------------------
Warranty Side Letter                        A deed between OMLA Holdings Limited, Old Mutual plc and XL Mid Ocean entered into on
                                            the date of this Agreement pursuant to which OMLA Holdings Limited (whose obligations
                                            are in turn guaranteed by Old Mutual plc) grants various warranties and undertakings in
                                            favour of XL Mid Ocean.
------------------------------------------------------------------------------------------------------------------------------------
XL Mid Ocean                                XL Mid Ocean Reinsurance Ltd.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

                                      - 6 -


<PAGE>

2.2      Headings in this Agreement are inserted for convenience only and shall
         not be taken into account in its interpretation.

2.3      Where applicable, the provisions of clause 2.1 shall impose substantive
         obligations on the Parties as provided in the provision concerned.

2.4      Any reference to:-

         (i)      the singular includes plural and vice versa;

         (ii)     a natural person includes legal persons and vice versa;

         (iii)    a gender includes other genders; and

         (iv)     a clause, paragraph or schedule, unless the context otherwise
                  requires, is a reference to a clause or paragraph of, or
                  Schedule to, this Agreement.

2.5      Words and expressions defined in any sub-clause shall, for the purposes
         of the clause of which that sub-clause forms part, bear the meaning
         assigned to such words and expressions in that sub-clause.

2.6      A document in the "agreed form" is a reference to a document in a form
         approved and for the purposes of identification initialled by or on
         behalf of each Party.

3.       APPOINTMENT OF CUSTODIAN

         XL Mid Ocean undertakes to use all reasonable efforts to procure the
         appointment (in its sole and absolute discretion) of a custodian in the
         United Kingdom in respect of the Adjusted Agreed Assets as won as
         reasonably possible after the Transfer Date, but in any event, by not
         later than 17 January 2000, or such later date as may be agreed between
         the Parties in writing.

4.       SECURITY ARRANGEMENTS

4.1      [***]

4.2      On the Deferred Premium Payment Date and against compliance by the
         Cedant with its obligations set out in clause 7.2, XL Mid Ocean shall
         enter into the Security Agreement.

5.       REINSURANCE CESSION

5.1      The Cedant agrees to cede the Business Covered and XL Mid Ocean agrees
         to accept by way of l00% reinsurance of the Business Covered with
         effect from the Transfer Date according to the terms of this Agreement.

5.2      XL Mid Ocean hereby agrees to be liable as reinsurer according to the
         terms of this Agreement and will follow the fortunes and settlements of
         the Cedant in respect of the Business Covered.

[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

                                      - 7 -



<PAGE>

5.3      XL Mid Ocean's liability in respect of the Business Covered will
         commence on the Transfer Date and liability will cease as contemplated
         in clause 15.1.

5.4      The reinsurance of the Business Covered, as contemplated in clause 5.1,
         is reinsurance of a closed book and is limited solely to the Business
         Covered as defined in this Agreement and shall not apply to any
         policies issued by the Cedant at any time which are not Policies and
         listed in the Policy File, and they will not become cessions under this
         Agreement.

5.5      For the avoidance of doubt, where any increase in payment in relation
         to any Policy is not recorded in the Policy File and/or any attached
         information to the Policy File, such increase shall not be covered
         under this Agreement.

6.       DETERMINATION PROVISIONS

6.1      DEFERRED PREMIUM

         6.1.1    The value of the Agreed Assets is the bid value of the Agreed
                  Assets, being the average of the valuations provided by the
                  Approved Bond Dealers at the close of business on the Business
                  Day immediately prior to the Transfer Date.

         6.1.2    XL Mid Ocean and the Cedant undertake to co-operate, in good
                  faith, to procure that the Approved Bond Dealers value the
                  Agreed Assets in accordance with the provisions of this clause
                  6.1.

         6.1.3    The average of the valuations provided by the Approved Bond
                  Dealers in accordance with this clause 6.1 will be final and
                  binding on the Parties.

6.2      THE TRANSFER INTEREST RATE

         6.2.1    In respect of the Transfer Interest Rate, the internal rate of
                  return will be based on the bid values of the Agreed Assets as
                  at the close of business on the Business Day immediately prior
                  to the Transfer Date.

         6.2.2    The Transfer lnterest Rate will be calculated by a duly
                  authorised representative of the Cedant. The Cedant undertakes
                  to procure that the Transfer Interest Rate is determined
                  timeously for it to comply with its obligations as
                  contemplated in clause 7.3.

         6.2.3    The Transfer Interest Rate is subject to approval by a duly
                  authorised representative of XL Mid Ocean. If XL Mid Ocean
                  fails in writing to approve the calculation contemplated in
                  clause 6.2.2 within 10 Business Days of receipt of the
                  calculation from the Cedant such dispute will be determined in
                  accordance with the provisions of clause 6.6. If XL Mid Ocean
                  fails to object in writing to the calculation within the time
                  period contemplated by this clause 6.2.3, XL Mid Ocean shall
                  be deemed to have approved same.

6.3      TRANSFER RESERVE

         6.3.1    For the purposes of determining the Transfer Reserve, the
                  Liability Outgo will be calculated using the Transfer
                  Mortality Basis, discounted by the Transfer Interest Rate.

         6.3.2    The Transfer Reserve shall be calculated by the Cedant's
                  Appointed Actuary. The Cedant undertakes to procure that such
                  Appointed Actuary shall perform

                                      - 8 -

<PAGE>

                  such calculation not later than 10 Business Day following
                  delivery of the Policy File to XL Mid Ocean and forthwith
                  thereafter, deliver a copy of the calculation, together with
                  all relevant working papers, to XL Mid Ocean's Appointed
                  Actuary.

         6.3.3    The calculation of the Transfer Reserve by the Cedant's
                  Appointed Actuary is subject to approval by XL Mid Ocean's
                  Appointed Actuary. If XL Mid Ocean's Appointed Actuary does
                  not approve the calculation of the Transfer Reserve within 10
                  Business Days of receipt of the calculation from the Cedant's
                  Appointed Actuary, such dispute will be determined in
                  accordance with the provisions of clause 6.6. If XL Mid Ocean
                  fails to object in writing to the calculation within the time
                  period contemplated by this clause 6.3.3, XL Mid Ocean shall
                  be deemed to have approved the same.

6.4      ADJUSTMENT PREMIUM

         6.4.1    The Adjustment Premium will be calculated by the Cedant's
                  Appointed Actuary. The Cedant undertakes to procure that its
                  Appointed Actuary performs such calculation within the time
                  period contemplated in clause 6.3.2.

         6.4.2    The Adjustment Premium is subject to approval by XL Mid
                  Ocean's Appointed Actuary and the Cedant undertakes to procure
                  that its Appointed Actuary delivers to XL Mid Ocean's
                  Appointed Actuary all relevant working papers of its Appointed
                  Actuary in respect of his calculation of the Adjustment
                  Premium. If XL Mid Ocean's Appointed Actuary does not approve
                  the calculation by the Cedant's Appointed Actuary within 10
                  Business Days of receipt of the calculation, such dispute will
                  be determined in accordance with the provisions of clause 6.6.
                  If XL Mid Ocean fails to object in writing to the calculation
                  within the time period contemplated by this clause 6.4.2, XL
                  Mid Ocean shall be deemed to have approved same.

6.5      EXPECTED BENEFIT PAYMENTS

         6.5.1    The Cedant undertakes to procure that its Appointed Actuary
                  performs the calculation in respect of any Expected Benefit
                  Payments as soon as reasonably possible in relation to any
                  Pre-Payment Date (other than in respect of the first
                  Pre-Payment Due contemplated in clause 11.l), but in any event
                  not less than 30 Business Days prior to any relevant
                  Pre-Payment Date.

         6.5.2    The Cedant shall procure that its Appointed Actuary delivers a
                  copy of the calculation (and all relevant working papers) of
                  any Expected Benefit Payments performed to XL Mid Ocean or its
                  Appointed Actuary within the time period contemplated in
                  clause 6.5.1.

6.6      DISPUTE RESOLUTION

         6.6.1    If XL Mid Ocean or its Appointed Actuary does not approve any
                  calculation performed by the Cedant or the Cedant's Appointed
                  Actuary under any of clauses 6.2,6.3,6.4 and 6.5 (or any other
                  dispute which is to be determined in accordance with this
                  clause 6.6) then the remaining provisions of this clause 6.6
                  shall apply.

         6.6.2    If XL Mid Ocean or its Appointed Actuary does not approve any
                  one or more of the calculations performed by the Cedant or its
                  Appointed Actuary, XL

                                      - 9 -

<PAGE>

                  Mid Ocean shall deliver a notice in writing to the Cedant,
                  specifying the calculation of which it does not approve and
                  setting out in reasonable detail, the basis of the objection.
                  Where a dispute is required to be determined elsewhere in this
                  Agreement in accordance with this clause 6.6, either Party
                  shall be entitled to deliver a notice to the other Party,
                  setting out the details of the dispute in reasonable detail.

         6.6.3    The Cedant and XL Mid Ocean shall, within 10 Business Days of
                  delivery of the notice referred to in clause 6.6.2 attempt, in
                  good faith, to resolve the dispute.

         6.6.4    If the Cedant and XL Mid Ocean are unable to resolve the
                  dispute within the time period contemplated in clause 6.6.3,
                  such dispute shall be referred to the respective Appointed
                  Actuaries of the Cedant and XL Mid Ocean, who shall further
                  attempt to resolve the dispute amicably within 10 Business
                  Days of expiry of the period referred to in 6.6.3.

         6.6.5    If the respective Appointed Actuaries of the Cedant and XL Mid
                  Ocean are unable to reach agreement within the time period
                  contemplated in clause 6.6.4, the Cedant and XL Mid Ocean
                  shall agree upon an independent actuary. If the Cedant and XL
                  Mid Ocean are unable to reach agreement on the identity of the
                  independent actuary within a period of 10 Business Days of
                  expiry of the period referred to in clause 6.6.4, such
                  independent actuary shall be appointed by the President, for
                  the time being, of the Institute of Actuaries in England and
                  Wales.

         6.6.6    The Cedant and XL Mid Ocean shall make all reasonable
                  endeavours to procure that the independent actuary performs
                  the disputed calculation within 15 Bushes Days of his
                  appointment. Any calculation undertaken by the independent
                  actuary shall be in his capacity as an expert and not as an
                  arbitrator or quasi-arbitrator and his decision shall be final
                  and binding on the Cedant and XL Mid Ocean.

        6.6.7    In the event any one of the matters contemplated in clauses
                 6.2, 6.3, 6.4 or 6.5 become the subject matter of a dispute to
                 be determined in accordance with the provisions of this clause
                 6.6 and as a result thereof the Cedant or XL Mid Ocean (as the
                 case may be) shall not be able to make payment of the
                 Adjustment Premium on the Adjustment Premium Payment Date, the
                 Adjustment Premium Payment Date shall be the date upon which
                 the dispute is settled or determined (as the case may be) in
                 accordance with this clause 6.6.

7.       REINSURANCE PREMIUM

7.1      On the date of signature of this Agreement, the Cedant shall pay the
         Deposit Premium to XL Mid Ocean.

7.2      On the Deferred Premium Payment Date, the Cedant shall deliver the
         Adjusted Agreed Assets and the Adjusted Accrued Investment Returns to
         XL Mid Ocean's appointed custodian as contemplated in clause 3.

7.3      On the Adjustment Premium Payment Date, the Adjustment Premium shall be
         paid in cash (in GBP) by 12 noon by means of electronic transfer by
         Cedant (if the Adjustment Premium is a positive figure) or by XL Mid
         Ocean (if the Adjustment Premium is a negative figure).

                                      - 10 -

<PAGE>

7.4      The Cedant shall from time to time pay to XL Mid Ocean any Subsequent
         Investment Returns forthwith upon receipt of the same from time to time
         by the Cedant.

8.       CONTRACTUAL WARRANTIES

8.1      Each of the Agreed Assets is, and each of the Adjusted Agreed Assets
         will be:

         8.1.1    legally and beneficially owned solely by the Cedant free from
                  any Encumbrance (as defined in clause 8.2); and

         8.1.2    in the possession or under the control of the Cedant.

8.2      For purposes of this clause 8, "Encumbrance" means a mortgage, charge,
         pledge, lien, option, restriction, right of first refusal, right of
         pre-emption, third-party right or interest, other encumbrance or
         security interest of any kind, or another type of preferential
         arrangement (including without limitation, a title transfer or
         retention arrangement) having similar effect.

9.       ADMINISTRATION

9.1      XL Mid Ocean shall procure the creation of the Pre-Payment Fund with
         the Deposit Taker as soon as reasonably practicable, but in any event
         not later than the Business Day preceding the Deferred Premium Payment
         Date.

9.2      The Business Covered will continue to be administered by the Cedant in
         accordance with the business standards of the Cedant as at the Transfer
         Date.

9.3      Without limiting the provisions of clause 12.1, the Cedant shall, on
         each Pre-Payment Date (other than in respect of the first Pre-Payment
         Due as contemplated in clause 11.1) deliver to XL Mid Ocean the
         information specified in Schedule 'B' and all relevant documents
         reasonably requested in relation thereto in respect of the Business
         Covered.

9.4      The Cedant shall not later than 5 Business Days before any Pre-Payment
         Date prepare an Account in such format as XL Mid Ocean may reasonably
         require. If XL Mid Ocean disagrees with the Account prepared, such
         dispute shall be resolved mutatis mutandis in accordance with the
         provisions of clause 6.6.

9.5      The Cedant shall deliver the Policy File to XL Mid Ocean's Appointed
         Actuary as won as reasonably possible after the Transfer Date, but in
         any event not later than 31 January 2000. If within 10 Business Days of
         delivery of the Policy File to XL Mid Ocean's Appointed Actuary, XL Mid
         Ocean or its Appointed Actuary disputes any information recorded on the
         Policy File, such dispute shall be determined, mutatis mutandis, in
         accordance with the provisions of clause 6.6.

10.      AMENDMENTS

         The Cedant shall notify XL Mid Ocean, in writing, on the last Business
         Day of each calendar quarter of any amendment, pursuant to Policy
         Conditions, to any Policy that has occurred in that preceding calendar
         quarter. No other amendment whatsoever shall increase or extend the
         liability, potential liability or exposure of XL Mid Ocean under this
         Agreement.

                                      - 11 -

<PAGE>

11.      PRE-PAYMENTS DUE AND ANNUITY PAYMENTS

11.1     Subject to the Cedant having complied in all respects with its
         obligation under clause 7.2, the first Pre-Payment Due is an amount of
         [****], which amount shall be paid by XL Mid Ocean into the Pre-Payment
         Fund, in cash, by close of business on the Business Day next following
         the Deferred Premium Payment Date.

11.2     Responsibility for the costs associated with the administration of the
         Business Covered rests solely with the Cedant. This includes, but is
         not restricted to, maintaining appropriate Policy records, verifying
         that benefits are being paid in accordance with the Policy Conditions
         and the provision of information to XL Mid Ocean in accordance with
         clause 9 and/or clause 12, as the case may be.

11.3     All payments made by the Cedant are binding on XL Mid Ocean, provided
         any such payment is in respect of the Business Covered and are made
         strictly in accordance with the relevant terms applicable to any Policy
         and in accordance with the Policy Conditions and do not violate the
         terms of this Agreement.

11.4     On each and every Pre-Payment Date, the Pre-Payment Due will be settled
         in cash in GBP and transferred, by means of electronic funds transfer,
         into (or out of in the case of negative amounts) the Pre-Payment Fund.

11.5     [***]

11.6     The Cedant undertakes to use all reasonable efforts to ensure that it
         is advised of the death of any Annuitant and shall, in any event,
         inform XL Mid Ocean on the first Business Day of the month following
         each calendar quarter after the date of signature of this Agreement of
         the death of an Annuitant since the last such advice. The Cedant will
         include an adjustment in respect of any overpaid Pre-Payments Due made
         by XL Mid Ocean in the next available Account, together with interest
         at the Interest Rate.

11.7     No ex-gratia or compromise payment made by the Cedant (and no payment
         above the binding award limit of an Insurance Ombudsman or his
         equivalent) will be binding on XL Mid Ocean unless XL Mid Ocean gives
         its prior written consent, which consent shall not be unreasonably
         withheld.

11.8     In addition to clause 11.7, if an annuity payment is proposed on an
         ex-gratia or compromise basis to an Annuitant, XL Mid Ocean will not be
         liable for that payment, unless the Cedant gives XL Mid Ocean all
         information known to it regarding any such payment and continues to
         keep XL Mid Ocean fully informed, to the extent reasonably practicable,
         of all developments relating to the payment as soon as is practicably
         possible.

[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

                                     - 12 -

<PAGE>

12.      INFORMATION

12.1     The Cedant shall, upon request from XL Mid Ocean from time to time,
         provide XL Mid Ocean with such information during normal business hours
         in respect of the Business Covered as XL Mid Ocean may reasonably
         request from the Cedant and in such format as the Cedant may reasonably
         require.

12.2     Except as may be impermissible at law, XL Mid Ocean may appoint
         representatives to inspect, during normal business hours, any relevant
         information under clause 9 or this clause 12 and such representatives
         may make copies (at the cost of XL Mid Ocean) of any such relevant
         documents and information, including without limitation any such
         information stored on any computer or in any other electronic form.

13.      MAJOR BUSINESS CHANGES

13.1     This Agreement is made on the basis of the Cedant's current business
         standards and general terms and conditions as disclosed to XL Mid Ocean
         prior to commencement of this Agreement.

13.2     No business administered under any standards other than the Cedant's
         business standards as at the Transfer Date is accepted by XL Mid Ocean
         under this Agreement, unless those new or differing business standards
         have been agreed to in writing by XL Mid Ocean in advance.

13.3     This clause 13 only applies to changes which may increase or extend the
         liability, potential liability or the exposure of XL Mid Ocean in
         respect of the Business Covered.

14.      LATE PAYMENT INTEREST

         Any amounts due by either the Cedant or XL Mid Ocean under this
         Agreement, which are outstanding after the due date for payment
         thereof, will bear interest at the Late Payment Interest Rate from the
         due date to the date of payment (both days inclusive), and which
         interest shall be capitalised monthly in arrears.

15.      TERM AND TERMINATION

15.1     This Agreement takes effect from the Transfer Date and, unless
         terminated pursuant to the remaining provisions of this clause 15,
         shall remain in force until the natural expiry of all the Policies
         constituting the Business Covered.

15.2     This Agreement will terminate immediately if the Cedant fails or
         neglects to deliver the Adjusted Agreed Assets to XL Mid Ocean's
         custodian on the Deferred Premium Payment Date. To the extent this
         Agreement has been implemented in part or in full, the Parties shall be
         restored, so far as same is reasonably possible, to their status quo
         ante. If any dispute arises between the Parties in respect of the
         termination of this Agreement in terms of this clause 15.2, such
         dispute shall be determined, mutatis mutandis, in accordance with
         clause 6.6.

15.3     The Cedant or XL Mid Ocean may terminate this Agreement with immediate
         effect by written notice to the other Party on or at any time after the
         performance of the whole or any material part of this Agreement being
         prohibited or rendered impossible in consequence of any law, regulation
         or decision of a regulatory authority; in which event the Parties shall
         use their reasonable endeavours to reach agreement on the continuance
         of this Agreement on whatever basis or the basis upon which the
         reinsurance arrangement contemplated by this Agreement will be
         terminated. If the

                                      - 13 -

<PAGE>

         Parties are unable to reach agreement within 30 Business Days of the
         date upon which this Agreement becomes prohibited or rendered
         impossible, such dispute shall be determined, mutatis mutandis, in
         accordance with clause 6.6.

15.4     The Cedant may terminate this Agreement with immediate effect by
         written notice to XL Mid Ocean on or at any time after XL Mid Ocean
         passes a resolution for its winding up, a court of competent
         jurisdiction making an order for XL Mid Ocean's winding up or
         dissolution, the making of an administration order in relation to XL
         Mid Ocean, the appointment of a receiver over, or an encumbrance taking
         possession of or selling, all or substantially all of the assets of XL
         Mid Ocean, XL Mid Ocean making an arrangement or composition with its
         creditors generally or making an application to a court of competent
         jurisdiction for protection from its creditors generally, upon which
         event the provisions of clause 15.5 shall apply hereto.

15.5     If this Agreement is terminated in accordance with the provisions of
         clause 15.4:

         15.5.1   XL's liability under this Agreement in respect of the Business
                  Covered shall be calculated pro rata up to and including the
                  date of termination; and

         15.5.2   XL Mid Ocean shall pay an amount equal to the Required Amount
                  to the Cedant.

16.      NOTICES

16.1     Any notice, request, instruction or other document (notices etc),
         mentioned in this Agreement must be made in writing. Writing includes
         facsimile and ether electronic means. Notices etc, must be sent to the
         address of the relevant Parties given in the Recitals, unless another
         address has been agreed in writing between the Parties.

16.2     For the purposes of this Agreement, notices etc, are deemed to have
         been served:

         16.2.1   At the time of delivery, if they have been delivered by hand
                  during office hours, or

         16.2.2   48 hours after posting or 7 days if overseas, if they have
                  been sent by post, or

         16.2.3   12 hours after transaction confirmation, if they have been
                  sent by facsimile or other electronic means.

16.3     For the purposes of this clause 16, the Parties' respective facsimile
         numbers are:

         16.3.1   XL Mid Ocean : 001 441 292 5226, or such substituted number as
                  may be notified to the Cedant in writing from time to time,
                  marked for the attention of President and Chief Executive
                  Officer;

         16.3.2   the Cedant : +44(0) 1256 743545, or such substituted number as
                  may be notified to the XL Mid Ocean in writing from time to
                  time, marked for the attention of :The Deputy Chief Executive.

16.4     However, if service occurs on a weekend or public holiday, the above
         notice periods do not start until the next Business Day.

                                      - 14 -

<PAGE>

17.      GOVERNING LAW AND JURISDICTION

17.1     This Agreement is governed by, and shall be construed in accordance
         with, English law.

17.2     Except as contemplated in clause 6.6, the courts of England shall have
         exclusive jurisdiction to settle any dispute arising from or connected
         with this Agreement.

17.3     The Parties agree that the documents which start any legal proceedings
         and any other documents required to be served in relation to any such
         proceedings may be served in accordance with the provisions of clause
         16. These documents may, however, be served in any other manner allowed
         by law. This clause applies to all proceedings wherever started.

18       COSTS

         Except where this Agreement provides otherwise, each Party shall pay
         its own costs relating to the negotiation, preparation, execution and
         performance by it of this Agreement and of each document referred to in
         it.

19.      AMENDMENTS

         No variation in this Agreement will be effective unless evidenced in
         writing and duly signed on behalf of each Party. Variations sent by
         instantaneous means of communication are also effective provided they
         are capable of being shown by means of permanent or retrievable record
         to have been agreed by each Party.

20.      GENERAL

20.1     Each Party warrants to the other that it has the power, authority and
         legal right to sign and perform this Agreement and that it has been
         duly authorised by all necessary actions of its directors and
         constitutes valid and binding obligations on it in accordance with this
         Agreement.

20.2     The failure to exercise or delay in exercising a right or remedy
         provided by this Agreement or by law does not impair or constitute a
         waiver of the right or remedy or an impairment of or a waiver of other
         rights or remedies. No single or partial exercise of a right or remedy
         provided by this Agreement or by law prevents further exercise of the
         right or remedy or the exercise of another right or remedy.

20.3     The Parties rights and remedies contained in this Agreement are
         cumulative and not exclusive of rights or remedies provided by law.

21.      ENTIRE AGREEMENT

21.1     This Agreement, the Warranty Side Letter and the Trading Instructions
         Letter constitute the entire agreement and supersede any previous
         agreements between the Parties relating to the subject matter of this
         Agreement and such Letters.

21.2     The Parties acknowledge that they have not relied on or been induced to
         enter into this agreement by a representation other than the warranties
         or otherwise set out in this Agreement.

                                      - 15 -

<PAGE>

21.3     Neither Party is liable to the other (in equity, contract or tort,
         under the Misrepresentation Act 1967 or in any other way) for a
         representation that is not set out in this Agreement.

21.4     Nothing in this clause 21 shall have the effect of limiting or
         restricting any liability arising as a result of fraud, wilful
         misconduct or wilful concealment.

22.      ASSIGNMENT

         Neither Party shall assign or transfer any of its rights under this
         Agreement in whole or in part without the express written consent of
         the other Party.

23.      COUNTERPARTS

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

EXECUTED BY THE PARTIES

SIGNATORIES

Signed at Hamilton, Bermuda for and on behalf of XL Mid Ocean Reinsurance Ltd on
the day of December 1999

                                         Date

/s/ not legible                                       21st December 1999
---------------------

                                         Date

/s/ not legible                                       21st December 1999
---------------------

Signed at London, United Kingdom for and on behalf of Old Mutual Life Assurance
Company Limited on the 21st day of December 1999

                                         Date

/s/ not legible                                       21st December 1999
---------------------
                                         Date

/s/ not legible                                       21st December 1999
---------------------

                                     - 16 -

<PAGE>

SCHEDULE 'A' - AGREED ASSETS

<TABLE>
<CAPTION>
STOCK TITLE                                                         NOMINAL AMOUNT
                                                                         GBP
<S>                                                                 <C>
Abbey National 6.5% 21/10/2030                                           750,000
Abbey National plc 10-3/4% 1/12/2006                                   3,290,000
AEGON 6.125% 31/2031                                                   3,000,000
Alliance & Leicester 6.5% 9/9/2015                                     3,740,000
AMP Int'l Fin Services 7.125% 6/8/2009                                 3,500,000
Anglian Water 6.375% BDS 15/01/2029                                    2,650,000
Annington 0% 7/12/2022                                                 7,000,000
Annington Finance 8% 02/10/21                                          2,500,000
Argyll Group 8.125% 4/10/2002                                          1,500,000
Asda 6.625% 17/07/2015                                                 2,000,000
ASDA Group 10-7/8% 20/4/2010                                             500,000
Asda Prop 10-5/16% 1/10/2011                                             500,000
Asda Properties 9.125% 31/12/2020                                      1,000,000
Aust (Commonwealth) 11-3/8% 26/10/15                                     860,000
Austral & N.Z. Bank 12-5/8% 16/5/2001                                  2,000,000
Australia 9-1/2% 14/10/2012 Br                                            55,000
Australia 9-1/2% 14/10/2012 Rg                                           161,000
Autolink M6A FSA 8.39% 15/6/2022                                       1,000,000
BAA 6.375% 04/08/2028 Plc                                              2,350,000
Bank America Corp 6.125% 2010                                          1,250,000
Bank Ned Gemeenten 5.375% 07/06/20021                                  2,500,000
Bank of American Credit Cards Corp 7.125% 15/09/2002                   1,500,000
Bank of Ireland 9.75% 21/03/2005                                         300,000
Bank of West Aust 9% 20/12/2006                                        2,500,000
Barclays Bank 12% 15/7/2010                                            3,160,000
Bayerische Vereinsbank 8-5/8% 15/06/05                                 2,750,000
Birmingham Midshires 9-1/8% 5/1/2006                                   1,850,000
BMW 6.375% 22/05/2009                                                  2,560,000
BOC 12-1/4% 2/10/2012-17                                               1,800,000
Bradford & Bingley 7-5/8% 30/12/99                                       270,000
Bradford & Bingley 8-3/8% 29/12/2006-11                                3,000,000
Bristol & West 10-3/4% 22/6/2018                                       1,500,000
Bristol & West B.S. 10-7/8% 30/9/2000                                    760,000
British Columbia 7.5% 31/12/2003                                       1,000,000
British Energy 6.202% 11/06/2016                                       1,580,000
British Land 8-7/8% 24/9/2035                                            291,500
British Telecom 5.75% 7/12/2028                                        4,800,000
Brixton Estates 10-3/4% 31/12/2025                                       150,000
Brixton Estates 11-1/4% 31/12/2023                                     1,929,500
Brixton Estates 9-1/2% 31/12/2026                                        801,400
Cable & Wireless 10-3/8% 27/3/2002                                       550,000
Cadbury Schweppes 8% 2000                                              1,400,000
Cambridge Water 13% 31/12/2004                                           100,000
Canary Wharf Finance 5% 22/10/2027                                     2,000,000
Cap & Co 9-7/8 31/12/2027                                              2,000,000
Capital Shopping Centre 6.875% 5/3/2013                                1,500,000
Care Homes No2 5.75% 15/02/2023                                        2,000,000
Care Homes No1 8% 9/4/2021                                             2,000,000
Carlsberg 7% 26/02/2013                                                2,000,000
</TABLE>

                                     - 17 -

<PAGE>

<TABLE>
<S>                                                                   <C>
Carlton Communication 7.625% BDS 06/06/07                                650,000
Catalyst Health (AMBAC) 5.87% 31/12/2030                               1,500,000
Citigroup 6.25% 02/09/2019                                             3,500,000
City Greenwich Rail Link 9-3/8 11/10/2020                                500,000
City of Salford 7% 25/01/2019                                            200,000
Coca Cola 6.5% 07/06/2021                                              1,500,000
Commercial Union 10-3/4% 20/3/2002                                     1,250,000
Commercial Union 9-1/2% 20/6/2016                                      1,495,000
Commerzbank 6.625% 30/08/2019                                          1,000,000
Commerzbank 7.875% 7/12/2007                                           2,000,000
Consols 2-1/2% (1923) 5/4/2069 (51.00)                                12,410,000
Consols 4% (1957) 1/2/2069 (79.00)                                       500,000
Co-op Wholesale Society 7-5/8 31/12/2018                               1,850,000
Coventry 8-1/4% 5/1/2026                                               1,000,000
Daimler Benz 7% 25/02/2000                                               600,000
Denmark (Kingdom of) 5.875% 28/06/2004                                 1,500,000
Denmark (Kingdom of) 13% 31/12/2005                                    2,130,000
Derwent Valley 10.125% 31/07/19                                        1,500,000
Dresdner Bk 7.75% 7/12/07                                              2,000,000
Dresdner Bk 7-5/8% 31/12/2003                                            100,000
ECSC 6.875% 25/1/2019                                                    700,000
EIB 6% 7/12/2028                                                       3,000,000
Enterprise Inns plc 6% 2/3/2014                                        1,500,000
European Investment Bank 5% 15/04/2039                                 1,500,000
Export Import Bank of Japan 8% 5/2/2007                                  500,000
Fannie Mae 5.375% 7/12/2028                                            2,000,000
Finland 11.5 2009                                                        960,000
Fitzwilton 9-3/4% 11/10/2006                                           1,000,000
Fresh class(A) 8.639(11.126)% 5/10/2049                                3,000,000
General Electric 5.25% 07/12/2028                                      2,150,000
General Electric Capital Corp 6.25% 01/09/2009                         1,400,000
Granada Grp 10% 18/02/2018                                             1,000,000
Granchester 7-3/8 30/04/2020                                             500,000
Great Portland Est 9-1/2% 31/3/2016                                    1,000,000
Greenalls 10-1/2% 23/6/2017                                            1,500,000
Guardian Royal Exchange 6.625% 21/8/2023                               4,500,000
Halifax 13.625% 29/06/2049                                               250,000
Halifax (Leeds Perm B.S.) 10-1/2% 16/02/2018                             930,000
Halifax B.S. 11% 17/1/2014                                               380,000
Helaba 9% 6/9/2004                                                       850,000
HMC MBIA 7.181% 30/09/2027                                             1,000,000
Housing Ass Fund 8-1/4% 07/06/2027                                     3,700,000
Housing Securities 8 3/8% 25/1/2019                                      575,000
HSBC Midland Bank 6.5% 07/07/2023                                      1,000,000
Iceland 14-1/2% 31/1/2016                                              1,177,000
Iceland 8 3/4% 12/05/2003                                                747,000
III Group 6.875% 09/03/2023                                            3,200,000
III Group plc 5.75% 3/12/2032                                          1,000,000
International Finance Corp 5.5% 7/6/2021                               1,000,000
Intl Bk Recon & Dev 4.875% 7/12/2028                                   1,000,000
Ireland 12 1/2% 12/10/2008 1                                             276,317
Ireland 12 1/2% 12/10/2008 2                                           2,925,000
Italy (Republic of) 6% 04/08/2028                                      3,040,000
Italy 10.5% 28/04/2014                                                 1,000,000
J Saville Gordon 7 5/8% NI 5/1/23                                        500,000
</TABLE>

                                     - 18 -

<PAGE>

<TABLE>
<S>                                                                    <C>
Japan Financial Mun. 5.75% 09/08/2019                                  2,000,000
Japanese Finance Municipal Enterprise 8.375% 07/12/2006                1,000,000
John Lewis 10 1/4% 6/5/2006                                            1,000,000
John Lewis 10-1/2% 23/1/2014                                           2,000,000
Keystone I.T. 11-3/8% 1/10/2010-15                                       136,250
KFW International 6% 07/12/2028                                        4,250,000
Kingfisher Plc 6.875% 23/03/2010                                       2,250,000
Land Securities 10-3/4% 31/07/04                                         830,000
Lb.Sch.Holstein 8% 28/12/06                                            1,300,000
LCR Finance 4.5% 7/12/2038                                             6,000,000
LGS Investments 8.75% 22/05/2020                                       1,300,000
Lloyds (TSB) 10-5/8% 21/10/2008                                        1,605,000
Lloyds Bank 9-5/8% 6/4/2023                                            1,600,000
Local Authority Bond 8-1/8% 31/01/14                                   1,600,000
London & Manchester 8 1/8% 30/11/2004                                    875,000
Lynton 10-1/4% 31/7/2017                                               1,500,000
Mansfield Brewery 6.875% 28/02/2028                                    1,000,000
MEPC 8-3/4% 07/12/2006                                                   520,000
Mutual Group 7.25% 12/01/2004                                          2,100,000
Mutual Sec 7.3917 30/9/2012                                              800,000
Mutual Sec 7.5873 30/9/2022                                              500,000
Nat West Bank 8-1/8% 29/12/06-11                                       2,700,000
National Grid 5.875% 2024                                              4,750,000
National Power Plc 8.375% 02/08/06                                     1,000,000
Nationwide B.S. 10-1/2% 30/07/2002-07                                  3,000,000
Natwest 6.5% 07/09/2021                                                1,100,000
NB Housing Assn 6.625% 30/09/2038                                      2,000,000
NBH Assoc (FSA) 8 5/8% 26/09/2016-20                                     500,000
NEC Finance Plc 13.625 30/09/2016                                        360,000
New Zealand (BEARER)) 11.25% 04/05/2008                                  235,000
New Zealand (REG) 11-1/4 4/5/2008                                        575,000
Newcastle 11 1/4% 30/9/2017                                              250,000
Newport Borough 8-7/8% 10/04/2019                                      1,000,000
Nippon T&T 7.375% 02/12/2003                                           1,650,000
Nordic Investment Bank 5.25% 26/11/2019                                2,000,000
Northavon inv 8.12% 5/10/2026                                          1,500,000
Northern Counties FSA 9-1/8% 31/1/2025                                 3,000,000
Northern Ireland Electricity 6.875% 18/9/2018                          1,950,000
Northern Rock 6.375% 2/12/2019                                         2,500,000
Northumbrian Water 6.875% 06/02/2023                                   1,500,000
Oester Kontrollbank 5.75% 7/12/2028                                    2,450,000
Pavilion Housing AMBAC 5-1/2%/ 24/4/27                                 2,000,000
Peabody (AMBAC) 10-1/4% 17/8/2023                                      1,450,000
PHF Sec No 7.1825% 10/07/2025                                          1,200,000
Portugal (Rep of) (BR) 9% 20/05/2016                                     535,000
Portugal (Rep of) (REG) 9% 20/05/2016                                  2,000,000
Powergen 6.25% 29/04/2024                                              1,600,000
Powergen 8-1/2% 03/07/2006                                               500,000
Province Of Quebec 8-5/8 04/11/11                                      1,041,000
Prudential 5.875% 11/05/2029                                           2,961,000
Pub Master Finance 7.369% 30/06/2022                                   1,000,000
Punch Taverns 7.274% 15/04/2022                                          500,000
Quadrant Housing Trust AMBAC 4.94%-7.93% 10/2/2033                     2,500,000
Railtrack 7 3/8% 18/11/2022                                            2,425,000
Rank 8.75% 28/07/2003                                                  2,100,000
</TABLE>

                                     - 19 -

<PAGE>

<TABLE>
<S>                                                                   <C>
Roadchef 7.418% 31/10/2023                                             2,000,000
Rodamco Jersey 6.25% 24/06/2024                                        4,500,000
Royal Bank of Scotland 10-1/2% 1/3/2013                                3,130,000
S.W Water 10-5/8% 05/02/2012                                           2,400,000
Sainsbury 8-1/4% 22/12/2000                                            2,950,000
Sanctuary Housing 8-3/8 1/9/2031                                       2,000,000
Scot Metropol Prop 10-1/4% 15/8/2016                                   1,276,000
Scot & South Energy 5.875% 22/09/2022                                  3,500,000
Sec Trust Scotland 12% 30/9/2013                                         218,440
Severn Trent Water 6.125% 26/02/2024                                   3,000,000
Shaftesbury Plc 8-1/2% 31/03/24                                          750,000
Siemens 6.875% 24/2/2000                                               1,000,000
Slough Estates 11-1/4% 31/12/2019                                        400,000
Slough Estates 12-3/8% 31/12/2009                                      1,650,000
Smithkline Beecham 8-3/8% 29/12/2000                                     700,000
SNCB 9-3/8% 21/02/2020                                                   500,000
Soc Gen De Belgique 11.31% 1/5/07                                        440,000
South Somerset Homes (AMBAC) 5.955 2034                                2,000,000
Southern Water 6.842% 26/3/2008                                        3,100,000
Spain (Kingdom of) 5.25% 06/04/2029                                    1,760,000
Statoil 6.125% 27/11/2028                                              2,790,000
Stirling Water (MBIA) 5.822% 26/09/2026                                1,000,000
Summit Finance Law AMBAC 6.484% 31/03/2028                             1,000,000
Swiss Bank 8.75% 20/06/2005                                            2,000,000
Takare 11.8% 30/6/2014                                                   500,000
Tesco 6% 14/12/2029                                                    2,000,000
Tesco 8.75% 20/2/2003                                                  1,210,000
Thames Water 6.75% 16/11/2028                                          2,500,000
Thistle Hotels 7-7/8% 20/06/2022                                       1,000,000
Tiara Securities 5.9% 10/07/2027                                       2,000,000
Tokyo Elec Power 11% 05/06/2001                                        1,000,000
Town Centre 10-1/2% 01/04/21                                           1,000,000
Toyota Motor Finance 7.25 29/12/99                                       650,000
Transcanada Pipe 16-1/2% 1/9/2007                                      1,250,000
Treasury 2-1/2% (1975) 1/4/2069 (49.75)                               15,128,674
Treasury 3% 29/12/2069(60.00)                                          1,367,000
Treasury 6% 7/12/2028                                                  4,330,000
Treasury 7 1/2% 7/12/2006                                                500,000
Treasury 8% 07/12/2015                                                   280,000
Treasury 9% 13/10/2008                                                   145,000
Treasury Principle Strip 0% 07/06/2021                                 6,647,500
Trust Union Finance 8.125% 30/11/08                                      250,000
Tussauds Finance 7.078% 15/3/2020                                      1,000,000
Tyseley Finance FSA 6.675% 30/07/2018                                  1,700,000
UBS 7.375% 26/11/2004                                                    920,000
UBS 8% 08/01/2007                                                        580,000
Unique Public Finance 6.542% 30/03/2021                                1,000,000
University of Greenwich (AMBAC) 6.367% 31/07/2028                        650,000
Varsity Funding FSA 6.4175-8.7195% 24/07/2026                            500,000
Vaux 9-7/8% 26/09/2015                                                   250,000
Vodafone Grp 7-7/8% 6/11/2001                                          2,350,000
Welcome Break (Class A3)7.95% 1/9/2015                                 1,500,000
Wellington Pub Co. 6.735% 15/01/2029                                   2,500,000
Welsh Water 7-5/8% 21/03/2014                                          1,000,000
Wessex Water 5.875% 30/03/2009                                           500,000
</TABLE>

                                     - 20 -

<PAGE>

<TABLE>
<S>                                                                    <C>
West Deutsche LB 8-1/2% 2/6/03                                         1,050,000
Westland 12-3/8% 30/9/2008                                               500,000
Wolverhampton & Dudley 6.5% 18/06/2019                                   500,000
Woolwich B.S. 10-1/8% 21/12/2012                                       1,930,000
Yorkshire Water 6.875% 23/4/2010                                       3,000,000
</TABLE>

                                     - 21 -

<PAGE>

SCHEDULE 'B' - DATA REQUIREMENTS

The following information should be provided by the Cedant to XL Mid Ocean as at
the Transfer Date and then on each Pre-Payment Date:

In force policy listing                      ANNUITANT'S NAME
                                             DATE OF BIRTH (1)
                                             JOINT ANNUITANT'S NAME
                                             DATE OF BIRTH (2)
                                             CURRENT ANNUITY AMOUNT
                                             ANNUITY AMOUNT AT ISSUE
                                             FREQUENCY
                                             IN ADVANCE/ARREARS
                                             ESCALATION RATE
                                             REDUCTION IN BENEFIT ON REVERSION
                                             GUARANTEE OUTSTANDING
                                             FIRST OR JOINT ANNUITANT BEING PAID
                                             NEXT PAYMENT DUE DATE
                                             REMAINING TERM
                                             POLICY NUMBER

Schedule of Deaths notified since the previous Pre-Payment Date, together with
copies of Death Certificates.

Schedule of Reversions notified since the previous Pre-Payment Date.

Pre-Payment Due and supporting calculations, including a summary of actual
payments made over the previous Pre-Payment Period.

                                      - 22 -

<PAGE>

                                   SCHEDULE 2

                               Security Agreement

                                                                              14

<PAGE>

                     DATED                               2000

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

                 OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED (1)
                                       AND
                        XL MID OCEAN REINSURANCE LTD       (2)

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

                               SECURITY AGREEMENT

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

                                  NORTON ROSE

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                                    PAGE
<S>           <C>                                                                         <C>
 1            Definitions and interpretation...........................................    1
 2            Covenant and charge......................................................    4
 3            Delivery of additional Collateral and improved Collateral ...............    4
 4            Return of Collateral.....................................................    5
 5            Rounding, minimum transfers and information..............................    6
 6            Exchange and substitution of Collateral..................................    6
 7            Appointment of new Custodian or Sub-custodian............................    6
 8            Dispute Resolution.......................................................    6
 9            Power of sale............................................................    7
 10           Application of Cash collateral...........................................    7
 11           Further assurance........................................................    8
 12           Power of attorney........................................................    8
 13           Receiver.................................................................    8
 14           Effectiveness of Collateral..............................................    8
 15           Subsequent interests and accounts........................................    9
 16           Representations and warranties relating to the Chargor...................    9
 17           Negative pledge..........................................................   10
 18           Costs and expenses.......................................................   10
 19           The transferred Collateral...............................................   10
 20           Currency conversion......................................................   10
 21           Notices..................................................................   10
 22           successors...............................................................   11
 23           Client money rules.......................................................   11
 24           Valuation agent..........................................................   11
 25           Law and jurisdiction.....................................................   11
 26           Amendments...............................................................   11
 27           Counterparts.............................................................   11
 28           Third Party Rights.......................................................   11
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                       <C>
Annex 1 Notice to Custodian/Deposit Taker ..............................................  13
Annex 2 Custodian Agreement.............................................................  14
Annex 3 The Accounts ...................................................................  15
</TABLE>

<PAGE>

THIS SECURITY AGREEMENT is made on                                          2000

BETWEEN:

(1)      OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED (No. 943621) whose registered
         address is Century House, 5 Old Bailey, London EC4M 7BA (the "SECURED
         PARTY"); and

(2)      XL MID OCEAN REINSURANCE LTD a company incorporated under the laws of
         Bermuda whose principal place of business is Wessex House, 45 Reid
         Street, PO Box HM 1066, Hamilton HM EX, Bermuda (the "CHARGOR").

IT IS AGREED as follows:

  1      DEFINITIONS AND INTERPRETATION

1.1      In this Security Agreement

         "ACCOUNTS" means the designated accounts of the Chargor with the
         Custodian, each sub-custodian, investment manager and any other
         relevant person under the Custodian Agreement in which the Non-Cash
         Collateral and Cash Collateral (other than the balance of the Pre-
         Payment Fund from time to time) subject to this Security Agreement are
         held and as specified in Annex 3;

         "ADJUSTED ASSET REGULATIONS" means the Asset Regulations except that
         (i) any admissibility percentage applicable for determining admissible
         assets set out in Part II of Schedule 12 to the Asset Regulations shall
         be deemed not to exceed 5 per cent, and (ii) the application of any
         such admissibility percentage shall not give rise to any admissibility
         limit of less than GBP one million; and (iii) the aggregate admissible
         value of Non-GBP Assets will not exceed 20% of the Required Amount; and
         (iv) the aggregate admissible value of Unhedged Non-GBP Assets will not
         exceed one per cent of the Required Amount; and (v) Currency Hedge
         Assets shall be deemed to be assets for the purposes of efficient
         portfolio management provided that such assets hedge a Non-GBP Asset
         back into GBP. For the avoidance of doubt Currency Hedge Assets
         contained within the Collateral shall be aggregated with all other
         Collateral to determine whether individual counterparty limits have
         been exceeded;

         "APPOINTED ACTUARY" shall have the meaning set out in the Reinsurance
         Agreement;

         "ASSET REGULATIONS" means the Insurance Companies Regulations 1994 and
         all other relevant regulations and professional guidance from time to
         time relating to the valuation and/or admissibility of the long term
         business assets of United Kingdom insurance companies provided that,
         for the purpose of this definition, references to long term business
         amount in such regulations and guidance shall be deemed to be
         references to the Required Amount;

         "BANKING DAY" means any day on which commercial banks are open for
         business (including dealings in foreign exchange and foreign currency
         deposits) in (i) London and Bermuda and (ii) in the case of a delivery
         of Permitted Collateral (a) the location of the account into which such
         delivery is to be made, and (b) either, in the case of a delivery of
         Cash, the principal financial centre of the currency of such Cash or,
         in the case of a delivery of Non-Cash Assets, the location of the
         account out of which such delivery shall be made, and, if different,
         the place where the delivery will be registered (if applicable);

         "BUSINESS COVERED" shall have the meaning set out in the Reinsurance
         Agreement;

         "CALL AMOUNT" means on any Valuation Date the GBP amount (rounded
         pursuant to clause 5.1) by which the Required Amount exceeds the
         aggregate Value (calculated as at the close of business on the Banking
         Day immediately preceding the Valuation Date) of the Collateral held by
         the Custodian on behalf of the Secured Party on such date;

         "CASH" means any Deposits denominated in GBP and such other currency or
         currencies as may from time to time be agreed in writing between the
         parties together with the balance from

                                        1

<PAGE>

         time to time of the Pre-Payment Fund;

         "CASH COLLATERAL" means Collateral comprising Cash;

         "COLLATERAL" means all the assets whether Cash or Non-Cash which stand
         to the credit of the Accounts from time to time delivered pursuant to
         this Security Agreement together with all Proceeds, interest earned on
         Cash Collateral (which interest shall accrue for the benefit of the
         Chargor at such rates) as shall be agreed between the Chargor and the
         Custodian and the Custodian and Sub-Custodian in accordance with the
         Custodian's and/or Sub-Custodian's (as the case may be) normal
         practice), substitutions for and additions to the foregoing and which
         have not been redelivered to the Chargor;

         "COLLATERAL RIGHTS" means all rights, powers and remedies of the
         Secured Party provided by this Security Agreement or by law;

         "CURRENCY HEDGE ASSETS" means a foreign exchange contract (or such
         other financial instrument as may from time to time be agreed between
         the parties thereto) the effect of which is to forward sell either EURO
         or USD and to forward purchase GBP, at a rate and future date
         determined when such contract is entered into;

         "CUSTODIAN" means the bank or other custodian chosen by the Chargor (in
         its absolute discretion) which will hold the Collateral on behalf of
         the Secured Party;

         "CUSTODIAN AGREEMENT" means the agreement between the Chargor and the
         Custodian substantially in the form of Annex 2;

         "DEFERRED PREMIUM PAYMENT DATE" shall have the meaning given to it in
         the Reinsurance Agreement;

         "DEPOSIT" means each credit balance from time to time on an Account and
         all rights, benefits and proceeds in respect thereof;

         "EURO" means the lawful currency widely adopted in the European Common
         Currency Area and, wherever mentioned in this Security Agreement, shall
         also include any successor thereto;

         "EVENT OF DEFAULT" means in relation to the Chargor:

         (i)      the passing of a resolution for its winding up, a court of
                  competent jurisdiction making an order for the Chargor's
                  winding up or dissolution, the making of an administration
                  order in relation to the Chargor, the appointment of a
                  receiver over, or an encumbrance taking possession of or
                  selling, all or substantially all of the assets of the
                  Chargor, the Chargor making an arrangement or a composition
                  with its creditors generally or making an application to a
                  court of competent jurisdiction for protection from its
                  creditors generally or any analogous proceedings being
                  undertaken or occurring under the courts of any other relevant
                  jurisdiction; or

         (ii)     any breach by the Chargor of (A) clause 15 (Term and
                  Termination) of the Reinsurance Agreement, (B) any provision
                  of the Reinsurance Agreement which is not capable of remedy or
                  (C) any provision of the Reinsurance Agreement which, being
                  capable Of remedy, is not remedied within 30 Banking Days of
                  such breach; or

         (iii)    any breach by the Chargor of any provision of this Security
                  Agreement;

         "GBP" means the lawful currency of the United Kingdom and, wherever
         mentioned in this Security Agreement, shall also include any successor
         currency thereto;

         "GBP ASSET" means an asset which is denominated in GBP;

         "HEDGED NON-GBP ASSETS" means the Non-GBP Assets in respect of which
         Currency Hedge Assets are held which have the effect of removing the
         exposure of those Non-GBP Assets to

                                        2

<PAGE>

         future changes in the exchange rates of the Euro or USD against GBP;

         "LIBOR" means the six monthly London Inter-Bank Offered rate of
         Barclays Bank plc;.

         "LIABILITY REGULATIONS" means the Insurance Companies Regulations 1994
         and all other relevant regulations and professional guidance from time
         to time relating to the valuation of liabilities of the long term
         business of United Kingdom insurance companies;

         "NON-CASH ASSETS" means such GBP Assets or such Non-GBP Assets as shall
         accord with the criteria set out in the Adjusted Asset Regulations;

         "NON-CASH COLLATERAL" means Collateral comprising Non-Cash Assets;

         "NON-GBP ASSETS" means an asset which is denominated in EURO or an
         asset which is denominated in USD;

         "OBLIGATIONS" means all obligations owing to the Secured Party by the
         Chargor under the Reinsurance Agreement and this Security Agreement,
         whether present or future, actual or contingent;

         "PERMITTED COLLATERAL" means collectively Cash and Non-Cash Assets;

         "PRE-PAYMENT FUND" shall have the meaning given to it in the
         Reinsurance Agreement;

         "PROCEEDS" means all principal, interest, dividends and other payments
         and distributions of cash or other property paid or distributed in
         connection with all Non-Cash Collateral and all rights privileges and
         other securities of every kind distributed with respect thereto or in
         exchange therefor. For the avoidance of doubt, Proceeds will not
         include any item of property acquired by the Secured Party upon any
         disposition or liquidation of Collateral;

         "REINSURANCE AGREEMENT" means the Reinsurance Agreement between the
         Secured Party and the Chargor dated 20 December 1999;

         "REQUIRED AMOUNT" means, on any Valuation Date, 100% of the net present
         value of the future projected annuity cash flows (calculated as at the
         close of business on the day immediately preceding the Valuation Date)
         such amount to be determined by the Valuation Agent in the context of
         the Business Covered only and in accordance with the Liability
         Regulations in respect of the relevant block of Business Covered. To
         the extent that a resilience reserve, when calculated in respect of
         such block of Business Covered, would exceed GBP five million, then any
         such excess over GBP five million shall be included for the purposes of
         this calculation;

         "RETURN AMOUNT" means, on any Valuation Date, the GBP amount (rounded
         pursuant to clause 5.2) by which the aggregate Value (calculated as at
         the dose of business on the Banking Day immediately preceding the
         Valuation Date) of the Collateral held by the Custodian on behalf of
         the Secured Party exceeds the then current Required Amount;

         "SUB-CUSTODIAN" means the bank or other sub-custodian chosen by the
         Custodian (in its absolute discretion) which will hold the Collateral
         on behalf of the Custodian for the Secured party;

         "SUB-CUSTODIAN AGREEMENTS" means the agreements between the Custodian
         and the Sub-Custodians;

         "UNHEDGED NON-GBP ASSETS" means Non-GBP Assets other than Hedged
         Non-GBP Assets;

         "USD" means the lawful currency of the United States of America and,
         wherever mentioned in this Security Agreement, shall also include any
         successor thereto;

         "VALUATION AGENT" means an actuary who would, if the Chargor were a
         life insurance company subject to the Insurance Companies Act 1982
         (United Kingdom) be entitled to be appointed as

                                        3

<PAGE>

         an actuary to an insurance company in the terms of section 19 of such
         Act;

         "VALUATION DATE" means (i) the Deferred Premium Payment Date and (ii)
         the final Banking Day in each calendar quarter during the term of the
         Reinsurance Agreement and (iii) each Banking Day on which the Call
         Amount or the Return Amount exceeds GBP 2 million; and

         "VALUE" means in relation to any Collateral on any date, the admissible
         value of such Collateral as determined by the Valuation Agent on such
         date in accordance with the Adjusted Asset Regulations provided that,
         in determining "VALUE", the Valuation Agent shall only include such
         part(s) of the Pre-Payment Fund and the Accounts in respect of which
         the requirements of clause 2.4 have been met.

1.2      In this Security Agreement, any reference to (a) a "CLAUSE" is, unless
         otherwise stated, a reference to a clause hereof and (b) "THIS SECURITY
         AGREEMENT" and the "REINSURANCE AGREEMENT" is a reference to this
         Security Agreement or (as the context requires) the Reinsurance
         Agreement as amended, varied or supplemented from time to time. Clause
         headings are for ease of reference only. Terms used but not defined
         herein shall bear the respective meanings ascribed to them in the
         Reinsurance Agreement.

  2      COVENANT AND CHARGE

2.1      The Chargor shall discharge each of the Obligations in the manner
         provided for in the Reinsurance Agreement and this Security Agreement
         and pay to the Secured Party when due and payable and in the manner
         provided for in the Reinsurance Agreement and this Security Agreement
         each sum owing by the Chargor to the Secured Party in respect of the
         Obligations.

2.2      On the Deferred Premium Payment Date, the Chargor shall transfer to the
         Accounts, Permitted Collateral, having an aggregate Value at least
         equal to the Required Amount.

2.3      The Chargor charges with full title guarantee and by way of first fixed
         charge all of the Collateral the balance from time to time of the
         Pre-Payment Fund and all of its rights under the Custodian Agreement
         (insofar as the same relate to the Collateral) in favour of the Secured
         Party as security for the payment and discharge of all of the
         Obligations.

2.4      The Chargor shall deliver a notice to (and use its reasonable
         endeavours to procure acknowledgement from) the Custodian and any other
         relevant person under the Custodian Agreement and each relevant Deposit
         Taker of the security interest over each of the Accounts and (as the
         context requires) the Pre-Payment Fund, in the form set out in Annex 1.

2.5      The Chargor hereby agrees that the security provided by the terms of
         the covenant and charge in this Security Agreement shall be a
         continuing security for each of its Obligations and shall not be
         satisfied by any intermediate payment or satisfaction of the whole or
         any part of the Obligations.

2.6      The Chargor hereby waives any right it may have of first requiring the
         Secured Party to proceed against or claim payment from any other person
         or enforce any guarantee or security before enforcing this Security
         Agreement.

2.7      Where any discharge (whether in respect of the security constituted by
         this Security Agreement, any other security or otherwise) is made on
         the faith of any payment, security or other disposition which is
         avoided or any amount paid pursuant to any such discharge or
         arrangement must be repaid on bankruptcy or liquidation (or otherwise)
         of the Chargor, the security constituted by this Security Agreement and
         the liability of the Chargor under this Security Agreement shall
         continue as if there had been no such discharge or arrangement.

  3      DELIVERY OF ADDITIONAL COLLATERAL AND IMPROVED COLLATERAL

3.1      If a Call Amount exists on a Valuation Date, the Chargor shall by 12
         p.m. London time on the second Banking Day following such Valuation
         Date, at the cost and expense of the Chargor,

                                        4

<PAGE>

         arrange for the delivery to the Accounts of further Permitted
         Collateral with a Value as at the relevant Valuation Date of not less
         than the Call Amount (and which, for the avoidance of doubt, shall be
         subject to the charge in clause 2 of this Agreement).

3.2      If the Collateral (including, without limitation, the Pre-Payment Fund)
         has, on any day (the "Relevant Day"), an average Standard & Poor's
         rating of below A (such rating to be of (i) the relevant asset(s) in
         respect of Non-Cash Assets and (ii) the Custodian and Deposit Taker(s)
         in respect of Cash), the Chargor shall (notwithstanding that the Call
         Amount is equal to or less than zero on the Relevant Day) deliver
         Permitted Collateral to the Account. Such Permitted Collateral shall be
         delivered on the second Banking Day following the Relevant Day and
         shall ensure that the average Standard & Poor's rating of the
         Collateral (including, without limitation, the Pre-Payment Fund) after
         delivery is equal to or greater than A. If a Return Amount exists after
         such delivery, the provisions of clause 4 shall apply.

  4      RETURN OF COLLATERAL

4.1      If a Return Amount exists on a Valuation Date, the Chargor may at any
         time, by giving written notice (a "REQUEST FOR RETURN") to the Secured
         Party and the Custodian, require the Secured Party to comply with the
         provisions of clause 4.2 or 4.3.

4.2      If a Return Amount exists on a Valuation Date, and the Secured Party
         receives a Request for Return, by 10 a.m. London time, the Secured
         Party shall, by 12 p.m., London time, on the second Banking Day
         following the date of receipt of the Request for Return, at the cost
         and expense of the Chargor, arrange with the Custodian for the
         redelivery of a portion of the Collateral having a Value as at the
         relevant Valuation Date, equal to the Return Amount (rounded pursuant
         to clause 5.2) to the Chargor, whereupon that portion of the Collateral
         shall be released from the security interest constituted by this
         Security Agreement.

4.3      If a Return Amount exists on a Valuation Date, and the Secured Party
         receives a Request for Return after 10 a.m. London time, the Secured
         Party shall by close of business on the third Banking Day following the
         date of receipt of the Request for Return at the cost and expense of
         the Chargor, arrange with the Custodian for the redelivery of a portion
         of the Collateral having a Value as at the relevant Valuation Date,
         equal to the Return Amount (rounded pursuant to clause 5.2) to the
         Chargor, whereupon that portion of the Collateral shall be released
         from the security interest constituted by this Security Agreement.

4.4      When all Obligations have been paid, discharged and performed in full,
         the Secured Party will, upon the request and at the reasonable expense
         of the Chargor, release the security interest created pursuant to
         clause 2 and procure that the Custodian shall redeliver all Collateral
         (together with any interest each pursuant to clause 8) to the Chargor.
         Any such release shall be conditional upon no security, disposition or
         payment to the Secured Party by the Chargor being void, set aside or
         ordered to be refunded pursuant to any law relating to insolvency or
         for any other reason whatsoever and, if such condition is not
         fulfilled, the Secured Party will be entitled to enforce this Security
         Agreement as if such release had not occurred.

4.5      Any notice given by the Chargor in accordance with clause 4.1 shall
         specify:

4.5.1    the Value of the Collateral in the Accounts as of the close of business
         on the Banking Day immediately preceding the relevant Valuation Date;

4.5.2    the Return Amount;

4.5.3    any other information necessary for the effective redelivery of
         Collateral in accordance with clause 4.2 or 4.3; and

4.5.4    the type of Collateral the Chargor wishes to have returned (where more
         than one type of Permitted Collateral has been delivered to the
         Accounts pursuant to this Security Agreement).

                                        5

<PAGE>

  5      ROUNDING, MINIMUM TRANSFERS AND INFORMATION

5.1      All Call Amounts shall be rounded up to the nearest integral multiple
         of GBP 1,000,000.

5.2      All Return Amounts shall be rounded down to the nearest integral
         multiple of GBP 1,000,000.

5.3      The Chargor will procure that the Valuation Agent will notify each
         party within 5 Banking Days following a Valuation Date (each such day
         being a "Notification Date") of the existence of a Call Amount or a
         Return Amount (if any) as the case may be.

5.4      On each Notification Date, on the first Banking Day of each month and
         on the First Banking Day after which the aggregate market value of
         assets exchanged out of the Collateral since the last such account
         exceeds 5% of the Required Amount as at the last such account and from
         time to time at the reasonable request of the Secured Party, the
         Chargor will provide to the Secured Party an account detailing all
         Collateral then held in the Accounts in a form and content
         substantially similar to the list of Agreed Assets as set out in
         Schedule A to the Reinsurance Agreement (but including, in addition,
         the market value of those assets) and such other details as may be
         agreed between the parties from time to time. Where the Secured Party
         requests additional information, the Chargor shall not unreasonably
         deny access to the Valuation Agent if the Secured Party so requests the
         Valuation Agent to provide such information.

5.5      At the reasonable request of the Secured Party and at reasonable
         intervals, the Chargor will provide to the Secured Party evidence in a
         form satisfactory to the Secured Party, that the Collateral is not
         subject to any Encumbrance other than the charge hereby created.

  6      EXCHANGE AND SUBSTITUTION OF COLLATERAL

6.1      The Chargor may from time to time sell or dispose of all or any part of
         the Collateral and replace such Non-Cash Collateral with Cash
         Collateral or Non-Cash Collateral of equal Value provided only that
         such sale or disposal is carried out on a delivery against payment
         basis, save in the case of any Currency Hedge Assets where payment is
         not made against delivery but is due in accordance with the terms of
         such Currency Hedge Asset.

6.2      The Chargor may from time to time sell or dispose of all or any part of
         the Collateral and replace such Cash Collateral with Non-Cash
         Collateral of equal Value.

  7      APPOINTMENT OF NEW CUSTODIAN OR SUB-CUSTODIAN

         In the event that the Chargor shall appoint a new Custodian, or in
         event that the Chargor becomes aware of the appointment of any new
         Sub-Custodian, the Chargor shall give written notice of such
         appointment to the Secured Party as soon as is reasonably practicable
         thereafter.

  8      DISPUTE RESOLUTION

8.1      If the Secured Party or its Appointed Actuary does not approve any
         calculation performed by the Chargor or the Valuation Agent under this
         Security Agreement (or any other dispute which is to be determined in
         accordance with this clause 8) then the remaining provisions of this
         clause 8 shall apply.

8.2      If the Secured Party or its Appointed Actuary does not approve any one
         or more of the calculations performed by the Chargor or the Valuation
         Agent, the Secured Party shall deliver a notice in writing to the
         Chargor, specifying the calculation of which it does not approve and
         setting out in reasonable detail, the basis of the objection. Where a
         dispute is required to be determined elsewhere in this Security
         Agreement in accordance with this clause 8, either party shall be
         entitled to deliver a notice to the other party, setting out the
         details of the dispute in reasonable detail.

                                        6

<PAGE>

8.3      The Chargor and the Secured Party shall, within ten (10) Banking Days
         of delivery of the notice referred to in clause 8.2 attempt, in good
         faith, to resolve the dispute.

8.4      If the Chargor and the Secured Party are unable to resolve the dispute
         within the time period contemplated in clause 8.3, such dispute shall
         be referred to the respective Appointed Actuaries of the Chargor and
         the Secured Party, who shall further attempt to resolve the dispute
         amicably within ten (10) Banking Days of expiry of the period referred
         to in clause 8.3.

8.5      If the respective Appointed Actuaries of the Chargor and the Secured
         Party are unable to reach agreement within the time period contemplated
         in clause 8.4, the Chargor and the Secured Party shall agree upon an
         independent actuary. If the Chargor and the Secured Party are unable to
         reach agreement on the identity of the independent actuary within a
         period of ten (10) Banking Days of expiry of the period referred to in
         clause 8.4, such independent actuary shall be appointed by the
         President, for the time being, of the Institute of Actuaries in England
         and Wales.

8.6      The Chargor and the Secured Party shall use all reasonable endeavours
         to procure that the independent actuary performs the disputed
         calculation within fifteen (15) Banking Days of his appointment. Any
         calculation undertaken by the independent actuary shall be in his
         capacity as an expert and not as an arbitrator or quasi-arbitrator and
         his decision shall be final and binding on the Chargor and the Secured
         Party.

8.7      In the event that any of the matters contemplated in clauses 3.1 or 4.1
         becomes the subject matter of a dispute to be determined in accordance
         with the provisions of this clause 8, and as a result thereof, the
         Chargor or the Secured Party (as the case may be) shall not be able to
         make payment of a Call Amount or a Return Amount within the period
         required after the relevant Valuation Date, the Valuation Date shall be
         the date upon which the dispute is settled or determined (as the case
         may be) in accordance with this clause 8.

  9      POWER OF SALE

9.1      If at any time an Event of Default has occurred and is continuing, the
         Secured Party shall be entitled, without prior notice to the Chargor or
         prior authorisation from any court, to sell or otherwise dispose of in
         any manner permitted by law, all or any part of the Collateral. The
         Secured Party shall be entitled to apply the proceeds of such sale or.
         other disposal in paying the costs of that sale or disposal and in or
         towards the discharge of the Obligations. The Secured Party shall be
         entitled to treat any Cash Collateral as if it were the proceeds of
         such sale or other disposal.

9.2      The power of sale or other disposal in clause 9.1 shall operate as a
         variation and extension of the statutory power of sale under s1O1 of
         the Law of Property Act 1925 and the Secured Party may exercise any
         power available to it by virtue of this Security Agreement or
         available to a secured creditor. The restrictions contained in s93 and
         s103 of the Law of Property Act 1925 shall not apply to this Security
         Agreement or to any exercise by the Secured Party of its right to
         consolidate mortgages or its power of sale.

9.3       In favour of a purchaser of all or any part of the Collateral, a
          certificate in writing by an officer, attorney or agent of the Secured
          Party that any power of sale or other disposal has arisen and is
          exercisable shall be conclusive evidence of that fact and no purchaser
          shall be concerned to enquire whether any power exercised or purported
          to be exercised by the Secured Party has become exercisable or whether
          any Obligation remains due.

 10      APPLICATION OF CASH COLLATERAL

         In respect of Cash Collateral, the Secured Party may at any time after
         an Event of Default with respect to the Chargor has occurred and is
         continuing, without prior notice to the Chargor, apply or appropriate
         the Cash Collateral in or towards the payment or discharge of any
         amounts payable by the Chargor with respect to any Obligation in such
         order as the Secured Party sees fit; or set off all or any part of any
         amount payable by the Chargor with respect to any Obligation against
         any obligation of the Secured Party to repay any amount to the Chargor
         in respect of

                                        7

<PAGE>

         the Permitted Collateral; and for these purposes the Secured Party
         shall be entitled to make any currency conversions or effect any
         transaction in currencies which it thinks fit and to do so at such
         times and rates as it thinks proper.

    11   FURTHER ASSURANCE

         On demand by the Secured Party, the Chargor shall promptly upon notice
         from the Secured Party execute all documents and do or procure all
         things (including the delivery, transfer, assignment or payment of all
         or part of the Collateral to the Custodian or Sub-Custodian on behalf
         of the Secured Party) that the Secured Party may reasonably specify for
         the purpose of (a) exercising the Collateral Rights when the relevant
         Collateral Rights become exercisable or (b) securing and perfecting its
         security over or title to all or any part of the Collateral or (c)
         enabling the Secured Party to vest all or part of the Collateral in its
         name or in the name(s) of its nominee(s), agent or any purchaser when
         the Collateral Rights become exercisable.

    12   POWER OF ATTORNEY

         The Chargor, by way of security, irrevocably appoints the Secured Party
         as its attorney and in its name, on its behalf and as its attorney to
         execute, deliver and perfect all documents and do all things in the
         name of the Chargor or the Secured Party (as the attorney may decide)
         that the Secured Party may consider to be requisite for (a) carrying
         out any obligation imposed on the Chargor under this Security Agreement
         or (b) exercising any of the Collateral Rights. The Chargor shall
         ratify and confirm all things done and all documents executed by the
         Secured Party in the exercise of that power of attorney.

    13   RECEIVER

  13.1   If at any time, an Event of Default has occurred and is continuing, the
         Secured Party may by writing (acting through an authorised officer of
         the Secured Party) without notice to the Chargor appoint one or more
         persons to be receiver of the whole or any part of the Collateral (each
         such person being (a) entitled to act individually as well as jointly
         and (b) for all purposes deemed to be the agent of the Chargor).

  13.2   In addition to the powers of the Secured Party conferred by clause 13,
         each person appointed pursuant to clause 13.1 shall have, in relation
         to the part of the Collateral in respect of which he is appointed, all
         the powers (as varied and extended by the provisions hereof) conferred
         by the lnsolvency Act 1986 and the Law of Property Act 1925 on
         mortgagors and mortgagees in possession, administrators, receivers and
         administrative receivers appointed under those Acts (whether or not
         such person is such).

    14   EFFECTIVENESS OF COLLATERAL

  14.1   The collateral constituted by this Security Agreement and the
         Collateral Rights shall be cumulative, in addition to and independent
         of every other security which the Secured Party may at any time hold
         for the Obligations or any rights, powers and remedies provided by law.
         No prior security held by the Secured Party over the whole or any part
         of the Collateral shall merge into the collateral hereby constituted.

  14.2   This Security Agreement shall remain in full force and effect as a
         continuing arrangement:

14.2.1   unless and until the Secured Party discharges it; or

14.2.2   unless terminated by agreement between the parties.

  14.3   No failure on the part of the Secured Party to exercise, or delay on
         its part in exercising, any Collateral Right shall operate as a waiver
         thereof, nor shall any single or partial exercise of a Collateral Right
         preclude any further or other exercise of that or any other Collateral
         Right. The obligations of the Chargor under this Security Agreement
         shall not be affected by any act,

                                        8

<PAGE>

         omission or circumstance which, but for this provision, might operate
         to release or otherwise exonerate the Chargor from its obligations
         hereunder.

  14.4   If, at any time, any provision of this Security Agreement is or becomes
         illegal, invalid or unenforceable in any respect under the law of any
         jurisdiction, neither the legality, validity or enforceability of the
         remaining provisions of this Security Agreement nor of such provision
         under the law of any other jurisdiction shall in any way be affected or
         impaired thereby.

  14.5   In relation to any share in a company which is for the time being part
         of the Collateral, the rights attached to such share shall be
         exercisable by the Secured Party only for the purpose of preserving the
         value of such share or of realising it, and unless there is an Event of
         Default with respect to the Chargor, shall be exercisable only in
         accordance with the Chargor's instructions or otherwise in its
         interests.

    15   SUBSEQUENT INTERESTS AND ACCOUNTS

  15.1   If the Secured Party at any time receives notice of any subsequent
         mortgage, assignment, charge or other interest affecting all or any
         part of the Collateral, all payments which would otherwise have been
         made by the Chargor to an Account shall thereafter be treated as having
         been credited to a new account of the Chargor and not as having
         been applied in reduction of the Obligations as at the time when the
         Secured Party received notice.

  15.2   All monies received, recovered or realised by the Secured Party under
         this Security Agreement (including the proceeds of any conversion of
         currency) may in its discretion be credited to and held in any suspense
         or impersonal account pending their application from time to time in or
         towards the discharge of any of the Obligations.

    16   REPRESENTATIONS AND WARRANTIES RELATING TO THE CHARGOR

  16.1   The Chargor represents and warrants to the Secured Party that:

16.1.1   the Collateral is beneficially owned by the Chargor free from any
         mortgage, charge, pledge, lien, option, restriction, right of first
         refusal, right of pre-emption, third-party right or interest, other
         encumbrance or security interest of any kind, or another type of
         preferential arrangement having similar effect ( "ENCUMBRANCE") other
         than the security interest granted under clause 2;

16.1.2   it has the power to grant a security interest in any Collateral it
         transfers to the Secured Party under this Security Agreement and all
         the necessary corporate authority has been obtained and action taken
         for the Chargor to grant a security interest in any Collateral it
         transfers to the Secured Party under this Security Agreement and
         execute and deliver and perform the covenants and obligations contained
         in this Security Agreement;

16.1.3   upon the transfer of any Collateral by the Chargor to the Secured
         Party, the Secured Party shall have a valid security interest in such
         Collateral;

16.1.4   the performance by the Chargor of any of its obligations contained in
         this Security Agreement will not result in the creation of any
         Encumbrance on any Collateral transferred to the Secured Party other
         than the security interest created under this Security Agreement; and

16.1.5   it is not unable to pay its debts within the meaning of s123 of the
         Insolvency Act 1986, s162 of the Bermudian Companies Act 1981 or
         otherwise and that it has not and will not become unable to pay its
         debts within the meaning of either section or otherwise in consequence
         of its entering into, or doing any act or thing contemplated or
         permitted or required to be done by it under this Security Agreement
         and the assets of the Chargor are now and will remain immediately after
         the date hereof greater than its liabilities (taking into account the
         actuarial value of its contingent and prospective liabilities) for the
         purposes of s123(2) and s241 of the Insolvency Act 1986.

                                        9

<PAGE>

  17     NEGATIVE PLEDGE

17.1     The Chargor covenants that it will not during the subsistence of this
         Security Agreement, except with the prior written consent of the
         Secured Party create, grant or permit to exist any Encumbrance, as
         defined in clause 16.1.1, other than the charge hereby created, on or
         over all or any part of the Collateral or any interest therein; or

  18     COSTS AND EXPENSES

         All the Secured Party's costs and expenses (including legal fees and
         any value added tax) incurred in connection with (a) the enforcement of
         the Collateral hereby constituted or (b) the exercise of any Collateral
         Right, shall be reimbursed to the Secured Party by the Chargor on
         demand on a full indemnity basis together with interest from the date
         the same were incurred to the date of payment at LlBOR plus 2% per
         annum.

  19     THE TRANSFERRED COLLATERAL

19.1     All calls or other payments which may become due in respect of the
         Collateral transferred to the Secured Party shall be paid by the
         Chargor, and any failure on the part of the Chargor to make such
         payment will result in the Secured Party having the right to elect to
         make such payment on behalf of the Chargor and demand immediate
         repayment by the Chargor of such payment to itself (and such payment
         shall be so repayable by the Chargor), provided that (for so long as
         the value of the Collateral is equal to or greater than the Required
         Amount), the Secured Party, by written notice to the Chargor, has given
         the Chargor a reasonable period of time to discharge any such calls or
         other payments.

19.2     At any time after the occurrence of an Event of Default and without any
         further consent or authority on the part of the Chargor, the Secured
         Party may exercise, at its discretion (in the name of the Chargor or
         otherwise) in respect of any of the Collateral transferred to it, any
         voting rights and any powers or rights which may be exercised by the
         person or persons in whose name or names such Collateral is registered
         or who is the bearer or holder of them.

19.3     The Secured Party shall have no liability to perform or fulfill any
         obligation of the Chargor in respect of the Collateral transferred to
         the Secured Party.

  20     CURRENCY CONVERSION

         For the purpose of or pending the discharge of any of the Obligations,
         the Secured Party may convert any money received, recovered or realised
         or subject to application by it under this Security Agreement from one
         currency to another, as the Secured Party may think fit and any such
         conversion shall be effected at Barclays Bank plc's spot rate of
         exchange for the time being far obtaining such other currency with the
         first currency.

  21     NOTICES

21.1     Any notice or demand to be served by one person on another pursuant to
         this Security Agreement may be served by leaving it at the address
         specified on page 1 hereof (or such other address as such person may
         previously have specified in writing) or by letter posted by prepaid
         first-class past to such address (which shall be deemed to have been
         served on the tenth day following the date of posting), or by fax to
         the fax number specified on page 1 hereof (or such other number as such
         person may previously have specified) (which shall be deemed to have
         been received when transmission has been completed).

21.2     The Chargor hereby irrevocably appoints NacRe International Limited as
         its agent to receive service of any notice or demand to be served on
         it pursuant to this Security Agreement. The registered address of NacRe
         International Limited is New London House, 6 London Street, London EC3R
         7LP.

21.3     For the purposes of this clause 21,the parties' respective facsimile
         numbers are:

                                       10

<PAGE>

21.3.1   XL Mid Ocean: 001 441 292 5226 or such other facsimile number as may be
         notified to the Secured Party in writing from time to time;

21.3.2   the Secured Party: + 44 (0) 1256 743 545 or such other facsimile number
         as may be notified to the Secured Party in writing from time to time;
         and

21.3.3   NacRe International Limited: + 44 (0) 207 338 0160, or such other
         facsimile number as may be notified to the Secured Party in writing
         from time to time.

    22   SUCCESSORS

         This Security Agreement shall remain in effect despite any amalgamation
         or merger (however effected) relating to the Secured Party and
         references to the Secured Party shall be deemed to include any assignee
         or successor in title of the Secured Party and any person who, under
         the laws of its jurisdiction of incorporation or domicile, has assumed
         the rights and obligations of the Secured Party hereunder or to which
         under such laws the same have been transferred.

    23   CLIENT MONEY RULES

  23.1   Each party hereby agrees that:

23.1.1   the Secured Party is not treating the Chargor as a client as defined in
         the Financial Services (Client Money) Regulations 1991 (the "RULES");
         and

23.1.2   money transferred to the Secured Party pursuant to this Security
         Agreement will not be subject to the protections conferred by the Rules
         to which the Secured Party is subject.

    24   VALUATION AGENT

         The Chargor shall procure that all calculations carried out by the
         Valuation Agent shall be determined in a commercially reasonable
         manner.

    25   LAW AND JURISDICTION

         This Security Agreement shall be governed by English law and the
         English courts shall have non-exclusive jurisdiction to settle any
         dispute which may arise from or in connection with it.

    26   AMENDMENTS

         No amendment, modification or waiver in respect of this Security
         Agreement will be effective unless in writing (including writing
         evidenced by facsimile transmission) and executed by each of the
         parties or confirmed by an exchange of telexes or electronic messages
         on an electronic messaging system.

    27   COUNTERPARTS

         This Security Agreement may be executed in one or more counterparts and
         by the different parties on separate counterparts, each of which when
         executed shall be an original, but all the counterparts together shall
         constitute one and the same instrument.

    28   THIRD PARTY RIGHTS

         A person that is not a party to this Agreement has no right under the
         Contracts (Rights of Third Parties) Act 1999 to enforce a term of this
         Agreement, provided that this clause 28 does not affect any right or
         remedy of a third party which exists or is available apart from that
         Act.

                                       11

<PAGE>

IN WITNESS WHEREOF this Security Agreement has been executed as a Deed by the
parties on the date specified above.

EXECUTED AS A DEED BY               )
Anthony P. Shearer and              )
_______________ for and             )
on behalf of                        )
OLD MUTUAL LIFE ASSURANCE           )
COMPANY LIMITED                     )                /s/ Anthony P. Shearer
                                                     -------------------------
                                                     Director

                                                     /s/ not legible
                                                     -------------------------
                                                     Director/Company Secretary

EXECUTED AS A DEED BY               )
Paul S. Giordano and                )
Robert R. Lusardi for and           )
on behalf of                        )
XL MID OCEAN                        )
REINSURANCE LTD.                    )                /s/ Paul S. Giordano
                                                     -------------------------
                                                     Authorized Signatory

                                                     /s/ Robert R. Lusardi
                                                     -------------------------
                                                     Authorized Signatory

                                       12

<PAGE>

                                     ANNEX I
                        NOTICE TO CUSTODIAN/DEPOSIT TAKER

TO:    *

Copy to: OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED

We refer to (i) the Security Agreement (the "SECURITY AGREEMENT") dated 20
December 1999 entered into by us in favour of OLD MUTUAL LIFE ASSURANCE COMPANY
LIMITED of Century House, 5 Old Bailey, London ("OLD MUTUAL") and (ii) the
Reinsurance Agreement (the "REINSURANCE AGREEMENT") dated 20 December 1999
entered into between us and Old Mutual, a copy of each such agreement is annexed
to this notice. Terms defined in the Security Agreement shall have the same
meanings in this notice.

Notice is hereby given by us to you that, by and pursuant to the Security
Agreement, we have charged in favour of the Secured Party all of the Collateral
and the Pre-Payment Fund.

We hereby instruct that you shall accept instructions from OLD MUTUAL in
relation to the [Collateral][Pre-Payment Fund] to OLD MUTUAL in accordance with
the provisions of the Security Agreement and the Reinsurance Agreement.

Yours faithfully

_____________________________

For and on behalf of
XL MID OCEAN REINSURANCE LTD.
Date ___________________

Acknowledged by *

_____________________________

Date ___________________

                                       13

<PAGE>

                                     ANNEX 2
                               CUSTODIAN AGREEMENT

                                       14

<PAGE>

                                     ANNEX 3
                                  THE ACCOUNTS

(1)  XL Mid Ocean - Old Mutual XLR F0802252

     Type: Pounds Sterling Cash Transfer Account

(2)  XL Mid Ocean - Old Mutual XLR F0802262

     Fixed Income Portfolio

                                       15

<PAGE>

                                   SCHEDULE 3

           OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00

                           FIXED RETROCESSION PREMIUMS

<TABLE>
<CAPTION>
--------------------------------
                    RETROCESSION
                      PREMIUM
                      PAYABLE
PERIOD      DATE        GBP
--------------------------------
<S>        <C>      <C>
    1      Dec-99     470,762
    2      Jan-00     919,644
    3      Feb-00     895,103
    4      Mar-00     906,566
    5      Apr-00     943,123
    6      May-00     934,499
    7      Jun-00     932,376
    8      Jul-00     939,420
    9      Aug-00     910,382
   10      Sep-00     901,745
   11      Oct-00     920,742
   12      Nov-00     923,902
   13      Dec-00     923,757
   14      Jan-01     917,525
   15      Feb-01     891,226
   16      Mar-01     901,537
   17      Apr-01     938,012
   18      May-01     929,593
   19      Jun-01     926,590
   20      Jul-01     933,942
   21      Aug-01     903,985
   22      Sep-01     894,631
   23      Oct-01     914,238
   24      Nov-01     917,042
   25      Dec-01     914,462
   26      Jan-02     908,994
   27      Feb-02     885,906
   28      Mar-02     895,228
   29      Apr-02     932,145
   30      May-02     924,412
   31      Jun-02     919,210
   32      Jul-02     924,877
   33      Aug-02     897,331
   34      Sep-02     889,259
   35      Oct-02     908,320
   36      Nov-02     913,387
   37      Dec-02     911,716
   38      Jan-03     905,377
   39      Feb-03     882,176
   40      Mar-03     889,760
   41      Apr-03     926,444
   42      May-03     920,440
   43      Jun-03     915,423
   44      Jul-03     920,685
   45      Aug-03     893,127
   46      Sep-03     885,829
   47      Oct-03     904,725
   48      Nov-03     910,086
   49      Dec-03     908,349
   50      Jan-04     901,277
   51      Feb-04     878,084
   52      Mar-04     885,821
   53      Apr-04     922,643
   54      May-04     916,282
   55      Jun-04     910,955
   56      Jul-04     915,541
   57      Aug-04     887,919
   58      Sep-04     881,306
   59      Oct-04     899,727
   60      Nov-04     905,607
   61      Dec-04     903,976
   62      Jan-05     895,949
   63      Feb-05     872,678
   64      Mar-05     880,257
   65      Apr-05     916,892
   66      May-05     910,151
   67      Jun-05     904,632
   68      Jul-05     908,683
   69      Aug-05     881,089
   70      Sep-05     875,340
   71      Oct-05     893,482
   72      Nov-05     899,485
   73      Dec-05     897,787
   74      Jan-06     889,030
   75      Feb-06     865,741
   76      Mar-06     873,268
   77      Apr-06     909,658
   78      May-06     902,476
   79      Jun-06     896,662
   80      Jul-06     900,026
   81      Aug-06     872,519
   82      Sep-06     867,605
   83      Oct-06     885,336
   84      Nov-06     890,568
   85      Dec-06     889,189
   86      Jan-07     881,019
   87      Feb-07     857,788
   88      Mar-07     865,191
   89      Apr-07     901,210
   90      May-07     893,614
   91      Jun-07     887,472
   92      Jul-07     890,112
   93      Aug-07     862,776
   94      Sep-07     858,650
   95      Oct-07     875,890
   96      Nov-07     881,642
   97      Dec-07     880,279
   98      Jan-08     871,161
   99      Feb-08     848,055
  100      Mar-08     855,283
  101      Apr-08     890,850
  102      May-08     882,891
  103      Jun-08     876,367
  104      Jul-08     878,230
  105      Aug-08     851,183
  106      Sep-08     847,822
  107      Oct-08     864,513
  108      Nov-08     870,825
  109      Dec-08     869,418
  110      Jan-09     859,326
  111      Feb-09     836,438
  112      Mar-09     843,417
  113      Apr-09     878,407
  114      May-09     870,143
  115      Jun-09     863,193
  116      Jul-09     864,250
  117      Aug-09     837,595
  118      Sep-09     834,943
  119      Oct-09     851,028
  120      Nov-09     857,942
  121      Dec-09     856,437
  122      Jan-10     845,355
  123      Feb-10     822,775
  124      Mar-10     829,436
  125      Apr-10     863,735
  126      May-10     855,233
  127      Jun-10     847,819
  128      Jul-10     848,056
  129      Aug-10     821,908
  130      Sep-10     819,898
  131      Oct-10     835,329
  132      Nov-10     842,878
  133      Dec-10     841,219
  134      Jan-11     829,141
  135      Feb-11     806,962
  136      Mar-11     813,240
  137      Apr-11     846,439
  138      May-11     837,770
  139      Jun-11     830,156
  140      Jul-11     829,579
  141      Aug-11     804,051
  142      Sep-11     802,605
  143      Oct-11     817,339
  144      Nov-11     825,543
  145      Dec-11     823,674
  146      Jan-12     810,611
  147      Feb-12     788,923
  148      Mar-12     794,761
  149      Apr-12     827,040
  150      May-12     818,281
  151      Jun-12     810,152
  152      Jul-12     808,783
  153      Aug-12     783,990
  154      Sep-12     783,017
  155      Oct-12     797,021
  156      Nov-12     805,885
  157      Dec-12     803,751
  158      Jan-13     789,729
  159      Feb-13     768,622
  160      Mar-13     773,971
  161      Apr-13     805,221
  162      May-13     796,446
  163      Jun-13     787,795
  164      Jul-13     785,677
  165      Aug-13     761,725
  166      Sep-13     761,130
  167      Oct-13     774,382
  168      Nov-13     783,890
  169      Dec-13     781,439
  170      Jan-14     766,505
  171      Feb-14     746,063
  172      Mar-14     750,888
  173      Apr-14     781,008
  174      May-14     772,289
  175      Jun-14     763,121
  176      Jul-14     760,313
  177      Aug-14     737,301
  178      Sep-14     736,987
  179      Oct-14     749,475
  180      Nov-14     759,590
-----------------------------
</TABLE>

                                                                              15

<PAGE>

                                 SCHEDULE 3

         OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00

                         FIXED RETROCESSION PREMIUMS

<TABLE>
<CAPTION>
--------------------------------
                    RETROCESSION
                      PREMIUM
                      PAYABLE
PERIOD      DATE        GBP
--------------------------------
<S>        <C>      <C>
  181      Dec-14     756,777
  182      Jan-15     740,995
  183      Feb-15     721,296
  184      Mar-15     725,578
  185      Apr-15     754,480
  186      May-15     745,883
  187      Jun-15     736,216
  188      Jul-15     732,792
  189      Aug-15     710,809
  190      Sep-15     710,678
  191      Oct-15     722,407
  192      Nov-15     733,067
  193      Dec-15     729,853
  194      Jan-16     713,312
  195      Feb-16     694,425
  196      Mar-16     698,161
  197      Apr-16     725,768
  198      May-16     717,354
  199      Jun-16     707,221
  200      Jul-16     703,266
  201      Aug-16     682,384
  202      Sep-16     682,348
  203      Oct-16     693,333
  204      Nov-16     704,455
  205      Dec-16     700,807
  206      Jan-17     683,619
  207      Feb-17     665,601
  208      Mar-17     668,806
  209      Apr-17     695,062
  210      May-17     686,881
  211      Jun-17     676,327
  212      Jul-17     671,933
  213      Aug-17     652,210
  214      Sep-17     652,189
  215      Oct-17     662,461
  216      Nov-17     673,936
  217      Dec-17     669,835
  218      Jan-18     652,131
  219      Feb-18     635,029
  220      Mar-18     637,733
  221      Apr-18     662,599
  222      May-18     654,695
  223      Jun-18     643,776
  224      Jul-18     639,037
  225      Aug-18     620,514
  226      Sep-18     620,443
  227      Oct-18     630,044
  228      Nov-18     641,746
  229      Dec-18     637,180
  230      Jan-19     619,111
  231      Feb-19     602,960
  232      Mar-19     605,208
  233      Apr-19     628,667
  234      May-19     621,073
  235      Jun-19     609,855
  236      Jul-19     604,865
  237      Aug-19     587,565
  238      Sep-19     587,395
  239      Oct-19     596,375
  240      Nov-19     608,163
  241      Dec-19     603,132
  242      Jan-20     584,867
  243      Feb-20     569,688
  244      Mar-20     571,534
  245      Apr-20     593,588
  246      May-20     586,333
  247      Jun-20     574,886
  248      Jul-20     569,734
  249      Aug-20     553,665
  250      Sep-20     553,361
  251      Oct-20     561,778
  252      Nov-20     573,504
  253      Dec-20     568,018
  254      Jan-21     549,735
  255      Feb-21     535,541
  256      Mar-21     537,047
  257      Apr-21     557,715
  258      May-21     550,821
  259      Jun-21     539,221
  260      Jul-21     533,987
  261      Aug-21     519,142
  262      Sep-21     518,686
  263      Oct-21     526,600
  264      Nov-21     538,114
  265      Dec-21     532,195
  266      Jan-22     514,077
  267      Feb-22     500,871
  268      Mar-22     502,101
  269      Apr-22     521,419
  270      May-22     514,903
  271      Jun-22     503,226
  272      Jul-22     497,981
  273      Aug-22     484,341
  274      Sep-22     483,729
  275      Oct-22     491,197
  276      Nov-22     502,358
  277      Dec-22     496,038
  278      Jan-23     478,265
  279      Feb-23     466,043
  280      Mar-23     467,056
  281      Apr-23     485,073
  282      May-23     478,952
  283      Jun-23     467,274
  284      Jul-23     462,074
  285      Aug-23     449,611
  286      Sep-23     448,849
  287      Oct-23     455,925
  288      Nov-23     466,604
  289      Dec-23     459,926
  290      Jan-24     442,671
  291      Feb-24     431,421
  292      Mar-24     432,271
  293      Apr-24     449,044
  294      May-24     443,333
  295      Jun-24     431,726
  296      Jul-24     426,617
  297      Aug-24     415,295
  298      Sep-24     414,399
  299      Oct-24     421,128
  300      Nov-24     431,218
  301      Dec-24     424,232
  302      Jan-25     407,650
  303      Feb-25     397,357
  304      Mar-25     398,090
  305      Apr-25     413,679
  306      May-25     408,394
  307      Jun-25     396,926
  308      Jul-25     391,941
  309      Aug-25     381,718
  310      Sep-25     380,710
  311      Oct-25     387,124
  312      Nov-25     396,542
  313      Dec-25     389,310
  314      Jan-26     373,533
  315      Feb-26     364,177
  316      Mar-26     364,828
  317      Apr-26     379,292
  318      May-26     374,448
  319      Jun-26     363,185
  320      Jul-26     358,345
  321      Aug-26     349,176
  322      Sep-26     348,082
  323      Oct-26     354,201
  324      Nov-26     362,891
  325      Dec-26     355,480
  326      Jan-27     340,616
  327      Feb-27     332,174
  328      Mar-27     332,766
  329      Apr-27     346,162
  330      May-27     341,774
  331      Jun-27     330,775
  332      Jul-27     326,091
  333      Aug-27     317,929
  334      Sep-27     316,775
  335      Oct-27     322,605
  336      Nov-27     330,540
  337      Dec-27     323,025
  338      Jan-28     309,150
  339      Feb-28     301,595
  340      Mar-28     302,141
  341      Apr-28     314,520
  342      May-28     310,601
  343      Jun-28     299,922
  344      Jul-28     295,397
  345      Aug-28     288,192
  346      Sep-28     287,005
  347      Oct-28     292,540
  348      Nov-28     299,718
  349      Dec-28     292,176
  350      Jan-29     279,339
  351      Feb-29     272,641
  352      Mar-29     273,146
  353      Apr-29     284,548
  354      May-29     281,106
  355      Jun-29     270,801
  356      Jul-29     266,431
  357      Aug-29     260,132
  358      Sep-29     258,939
  359      Oct-29     264,159
  360      Nov-29     270,603
-----------------------------
</TABLE>

                                                                              16

<PAGE>

                                   SCHEDULE 3

           OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00

                           FIXED RETROCESSION PREMIUMS

<TABLE>
<CAPTION>
--------------------------------
                    RETROCESSION
                      PREMIUM
                      PAYABLE
PERIOD      DATE        GBP
--------------------------------
<S>        <C>      <C>
  361      Dec-29     263,115
  362      Jan-30     251,331
  363      Feb-30     245,458
  364      Mar-30     245,919
  365      Apr-30     256,378
  366      May-30     253,419
  367      Jun-30     243,536
  368      Jul-30     239,314
  369      Aug-30     233,869
  370      Sep-30     232,690
  371      Oct-30     237,571
  372      Nov-30     243,319
  373      Dec-30     235,965
  374      Jan-31     225,228
  375      Feb-31     220,142
  376      Mar-31     220,553
  377      Apr-31     230,095
  378      May-31     227,615
  379      Jun-31     218,200
  380      Jul-31     214,118
  381      Aug-31     209,471
  382      Sep-31     208,327
  383      Oct-31     212,837
  384      Nov-31     217,942
  385      Dec-31     210,801
  386      Jan-32     201,079
  387      Feb-32     196,740
  388      Mar-32     197,091
  389      Apr-32     205,737
  390      May-32     203,728
  391      Jun-32     194,821
  392      Jul-32     190,868
  393      Aug-32     186,963
  394      Sep-32     185,869
  395      Oct-32     189,977
  396      Nov-32     194,500
  397      Dec-32     187,643
  398      Jan-33     178,889
  399      Feb-33     175,251
  400      Mar-33     175,534
  401      Apr-33     183,302
  402      May-33     181,746
  403      Jun-33     173,383
  404      Jul-33     169,552
  405      Aug-33     166,330
  406      Sep-33     165,298
  407      Oct-33     168,974
  408      Nov-33     172,979
  409      Dec-33     166,471
  410      Jan-34     158,624
  411      Feb-34     155,639
  412      Mar-34     155,846
  413      Apr-34     162,755
  414      May-34     161,627
  415      Jun-34     153,836
  416      Jul-34     150,122
  417      Aug-34     147,523
  418      Sep-34     146,561
  419      Oct-34     149,783
  420      Nov-34     153,333
  421      Dec-34     147,227
  422      Jan-35     140,217
  423      Feb-35     137,833
  424      Mar-35     137,960
  425      Apr-35     144,033
  426      May-35     143,300
  427      Jun-35     136,102
  428      Jul-35     132,503
  429      Aug-35     130,464
  430      Sep-35     129,577
  431      Oct-35     132,331
  432      Nov-35     135,485
  433      Dec-35     129,823
  434      Jan-36     123,580
  435      Feb-36     121,740
  436      Mar-36     121,785
  437      Apr-36     127,051
  438      May-36     126,675
  439      Jun-36     120,081
  440      Jul-36     116,600
  441      Aug-36     115,056
  442      Sep-36     114,247
  443      Oct-36     116,531
  444      Nov-36     119,342
  445      Dec-36     114,153
  446      Jan-37     108,603
  447      Feb-37     107,250
  448      Mar-37     107,216
  449      Apr-37     111,711
  450      May-37     111,649
  451      Jun-37     105,659
  452      Jul-37     102,303
  453      Aug-37     101,191
  454      Sep-37     100,457
  455      Oct-37     102,281
  456      Nov-37     104,794
  457      Dec-37     100,094
  458      Jan-38      95,168
  459      Feb-38      94,243
  460      Mar-38      94,134
  461      Apr-38      97,906
  462      May-38      98,108
  463      Jun-38      92,717
  464      Jul-38      89,495
  465      Aug-38      88,750
  466      Sep-38      88,089
  467      Oct-38      89,474
  468      Nov-38      91,727
  469      Dec-38      87,518
  470      Jan-39      83,154
  471      Feb-39      82,594
  472      Mar-39      82,419
  473      Apr-39      85,521
  474      May-39      85,941
  475      Jun-39      81,131
  476      Jul-39      78,055
  477      Aug-39      77,615
  478      Sep-39      77,021
  479      Oct-39      78,002
  480      Nov-39      80,023
  481      Dec-39      76,297
  482      Jan-40      72,435
  483      Feb-40      72,181
  484      Mar-40      71,950
  485      Apr-40      74,445
  486      May-40      75,032
  487      Jun-40      70,779
  488      Jul-40      67,863
  489      Aug-40      67,667
  490      Sep-40      67,135
  491      Oct-40      67,753
  492      Nov-40      69,566
  493      Dec-40      66,304
  494      Jan-41      62,894
  495      Feb-41      62,886
  496      Mar-41      62,610
  497      Apr-41      64,567
  498      May-41      65,274
  499      Jun-41      61,546
  500      Jul-41      58,804
  501      Aug-41      58,796
  502      Sep-41      58,318
  503      Oct-41      58,625
  504      Nov-41      60,246
  505      Dec-41      57,419
  506      Jan-42      54,418
  507      Feb-42      54,597
  508      Mar-42      54,289
  509      Apr-42      55,781
  510      May-42      56,562
  511      Jun-42      53,323
  512      Jul-42      50,769
  513      Aug-42      50,896
  514      Sep-42      50,468
  515      Oct-42      50,516
  516      Nov-42      51,957
  517      Dec-42      49,533
  518      Jan-43      46,900
  519      Feb-43      47,215
  520      Mar-43      46,886
  521      Apr-43      47,985
  522      May-43      48,801
  523      Jun-43      46,009
  524      Jul-43      43,655
  525      Aug-43      43,872
  526      Sep-43      43,486
  527      Oct-43      43,332
  528      Nov-43      44,604
  529      Dec-43      42,545
  530      Jan-44      40,247
  531      Feb-44      40,649
  532      Mar-44      40,311
  533      Apr-44      41,089
  534      May-44      41,904
  535      Jun-44      39,518
  536      Jul-44      37,372
  537      Aug-44      37,638
  538      Sep-44      37,291
  539      Oct-44      36,987
  540      Nov-44      38,098
-----------------------------
</TABLE>

                                                                              17

<PAGE>

                                   SCHEDULE 3

           OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00

                           FIXED RETROCESSION PREMIUMS

<TABLE>
<CAPTION>
--------------------------------
                    RETROCESSION
                      PREMIUM
                      PAYABLE
PERIOD      DATE        GBP
--------------------------------
<S>        <C>      <C>
  541      Dec-44      36,365
  542      Jan-45      34,372
  543      Feb-45      34,819
  544      Mar-45      34,482
  545      Apr-45      35,006
  546      May-45      35,790
  547      Jun-45      33,768
  548      Jul-45      31,834
  549      Aug-45      32,117
  550      Sep-45      31,804
  551      Oct-45      31,401
  552      Nov-45      32,357
  553      Dec-45      30,911
  554      Jan-46      29,195
  555      Feb-46      29,654
  556      Mar-46      29,327
  557      Apr-46      29,655
  558      May-46      30,387
  559      Jun-46      28,686
  560      Jul-46      26,965
  561      Aug-46      27,241
  562      Sep-46      26,958
  563      Oct-46      26,498
  564      Nov-46      27,309
  565      Dec-46      26,112
  566      Jan-47      24,650
  567      Feb-47      25,091
  568      Mar-47      24,781
  569      Apr-47      24,967
  570      May-47      25,630
  571      Jun-47      24,212
  572      Jul-47      22,700
  573      Aug-47      22,949
  574      Sep-47      22,695
  575      Oct-47      22,217
  576      Nov-47      22,891
  577      Dec-47      21,908
  578      Jan-48      20,673
  579      Feb-48      21,078
  580      Mar-48      20,791
  581      Apr-48      20,877
  582      May-48      21,463
  583      Jun-48      20,290
  584      Jul-48      18,980
  585      Aug-48      19,192
  586      Sep-48      18,964
  587      Oct-48      18,494
  588      Nov-48      19,044
  589      Dec-48      18,243
  590      Jan-49      17,212
  591      Feb-49      17,567
  592      Mar-49      17,306
  593      Apr-49      17,327
  594      May-49      17,832
  595      Jun-49      16,871
  596      Jul-49      15,750
  597      Aug-49      15,919
  598      Sep-49      15,715
  599      Oct-49      15,275
  600      Nov-49      15,713
  601      Dec-49      15,064
  602      Jan-50      14,214
  603      Feb-50      14,513
  604      Mar-50      14,281
  605      Apr-50      14,262
  606      May-50      14,688
  607      Jun-50      13,907
  608      Jul-50      12,960
  609      Aug-50      13,086
  610      Sep-50      12,906
  611      Oct-50      12,509
  612      Nov-50      12,848
  613      Dec-50      12,327
  614      Jan-51      11,635
  615      Feb-51      11,876
  616      Mar-51      11,674
  617      Apr-51      11,634
  618      May-51      11,985
  619      Jun-51      11,357
  620      Jul-51      10,568
  621      Aug-51      10,653
  622      Sep-51      10,496
  623      Oct-51      10,149
  624      Nov-51      10,405
  625      Dec-51       9,989
  626      Jan-52       9,434
  627      Feb-52       9,621
  628      Mar-52       9,447
  629      Apr-52       9,399
  630      May-52       9,683
  631      Jun-52       9,184
  632      Jul-52       8,533
  633      Aug-52       8,583
  634      Sep-52       8,447
  635      Oct-52       8,153
  636      Nov-52       8,339
  637      Dec-52       8,010
  638      Jan-53       7,571
  639      Feb-53       7,710
  640      Mar-53       7,563
  641      Apr-53       7,516
  642      May-53       7,741
  643      Jun-53       7,349
  644      Jul-53       6,819
  645      Aug-53       6,840
  646      Sep-53       6,724
  647      Oct-53       6,480
  648      Nov-53       6,610
  649      Dec-53       6,352
  650      Jan-54       6,010
  651      Feb-54       6,107
  652      Mar-54       5,986
  653      Apr-54       5,942
  654      May-54       6,119
  655      Jun-54       5,814
  656      Jul-54       5,386
  657      Aug-54       5,387
  658      Sep-54       5,288
  659      Oct-54       5,091
  660      Nov-54       5,178
  661      Dec-54       4,978
  662      Jan-55       4,714
  663      Feb-55       4,778
  664      Mar-55       4,679
  665      Apr-55       4,641
  666      May-55       4,779
  667      Jun-55       4,546
  668      Jul-55       4,203
  669      Aug-55       4,189
  670      Sep-55       4,108
  671      Oct-55       3,951
  672      Nov-55       4,006
  673      Dec-55       3,852
  674      Jan-56       3,652
  675      Feb-56       3,691
  676      Mar-56       3,612
  677      Apr-56       3,580
  678      May-56       3,686
  679      Jun-56       3,510
  680      Jul-56       3,238
  681      Aug-56       3,215
  682      Sep-56       3,148
  683      Oct-56       3,027
  684      Nov-56       3,058
  685      Dec-56       2,941
  686      Jan-57       2,791
  687      Feb-57       2,812
  688      Mar-57       2,750
  689      Apr-57       2,724
  690      May-57       2,807
  691      Jun-57       2,676
  692      Jul-57       2,461
  693      Aug-57       2,435
  694      Sep-57       2,380
  695      Oct-57       2,287
  696      Nov-57       2,303
  697      Dec-57       2,215
  698      Jan-58       2,104
  699      Feb-58       2,113
  700      Mar-58       2,065
  701      Apr-58       2,044
  702      May-58       2,109
  703      Jun-58       2,013
  704      Jul-58       1,843
  705      Aug-58       1,817
  706      Sep-58       1,774
  707      Oct-58       1,704
  708      Nov-58       1,709
  709      Dec-58       1,644
  710      Jan-59       1,563
  711      Feb-59       1,563
  712      Mar-59       1,527
  713      Apr-59       1,510
  714      May-59       1,562
  715      Jun-59       1,493
  716      Jul-59       1,360
  717      Aug-59       1,335
  718      Sep-59       1,302
  719      Oct-59       1,249
  720      Nov-59       1,249
-----------------------------
</TABLE>

                                                                              18

</TEXT>
</DOCUMENT>
