ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT by and between ZENITH INSURANCE COMPANY and RISCORP INSURANCE COMPANY Dated as of April 1, 1998

EXHIBIT 10.6

EXECUTION COPY

ASSUMPTION AND INDEMNITY
REINSURANCE AGREEMENT

by and between

ZENITH INSURANCE COMPANY

and

RISCORP INSURANCE COMPANY

Dated as of April 1, 1998

TABLE OF CONTENTS

PAGE

ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II
BUSINESS REINSURED. . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE III
ASSUMPTION CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE IV
POLICY ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE V
CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE. . . . . . . . . . . . . . . . . . . 6

ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS. . . . . . . . . . . . . . 7

ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE IX
GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE X
ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE XI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE XII
INSOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE XIII
OFFSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES . . . . . . . . . . . . . 12

ARTICLE XV
ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE XVI
TERRITORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE XVII
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE XVIII
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 14

SCHEDULE 3.2 STATE REQUIREMENTS FOR TRANSFER AND NOVATION OF INSURANCE
CONTRACTS

SCHEDULE 7.1-A ASSIGNED REINSURANCE CONTRACTS

SCHEDULE 7.1-B ASSUMED REINSURANCE CONTRACTS

EXHIBIT A POLICYHOLDER NOTICE

EXHIBIT B EXPIRED POLICY NOTICE

EXHIBIT C CLAIMANT NOTICE

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ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT

THIS ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT (this
"Agreement"), dated as of 12:01 a.m. New York City Time on April 1, 1998 (the
"Effective Date"), is made by and between ZENITH INSURANCE COMPANY, a stock
insurance company organized under the laws of the State of California
("Zenith"), and RISCORP INSURANCE COMPANY, a stock insurance company
organized under the laws of the State of Florida (the "Company").

WHEREAS, Zenith and the Company have entered into the Purchase
Agreement (as defined below); and

WHEREAS, the Purchase Agreement provided for Zenith and the Company
to enter into an indemnity reinsurance agreement;

WHEREAS, the parties have agreed to amend the Purchase Agreement to
provide for Zenith and the Company to enter into an assumption reinsurance
agreement;

WHEREAS, Zenith and the Company are entering into this Agreement
pursuant to the Purchase Agreement, as so amended;

WHEREAS, the Company has agreed to cede to Zenith, and Zenith has
agreed to assume certain liabilities and obligations of the Company under the
Insurance Contracts (as defined in the Purchase Agreement).

NOW, THEREFORE, in consideration of the mutual covenants and
promises and upon the terms and conditions set forth herein, the parties
hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1. DEFINITIONS. Capitalized terms used herein and not
otherwise defined in this Agreement shall have the meanings given to them in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:

"CLAIMANT" means any claimant under any Insurance Contract who (a)
has an open claim on the Effective Date, or (b) files a claim after the
Effective Date.

"EFFECTIVE DATE" means the date specified in the first paragraph
hereof.

"INSURANCE CONTRACTS" shall mean those Insurance Contracts (as
defined in the Purchase Agreement) issued by the Company.

"INSURANCE LIABILITIES" shall mean those Insurance Liabilities (as
defined in the Purchase Agreement) arising under or in connection with the
Insurance Contracts.

"NOVATED POLICIES" means those Insurance Contracts for which: (a)
the Company or Zenith has received a written acceptance by the Policyholder
of the transfer and assumption under this Agreement; and (b) with respect to
any Insurance Contract that was issued or issued for delivery in a state
where written acceptance by the Policyholder is not required by law or the
appropriate regulatory authority to effect an assumption and novation, (i)
the Policyholder is deemed to have accepted the transfer and assumption under
this Agreement by paying premiums directly to Zenith or taking such other
action as may be recognized under applicable state law as evidence of the
Policyholder's acceptance of the transfer and assumption, or (ii) the
Policyholder has, following the mailing to the Policyholder of such notices
as may be prescribed by applicable state law, neither accepted nor rejected
the transfer and assumption within a timeframe under which applicable state
law or appropriate regulatory authority permits the policyholder to be deemed
to have accepted the transfer and assumption. Any claim made by any Claimant
under an Insurance Contract which expired prior to the Effective Date shall,
subject to the last sentence of this paragraph, be deemed to be a claim under
a Novated Policy. If an Insurance Contract defined herein as a Novated
Policy is determined by law or an appropriate regulatory authority, by
judicial decision or otherwise to be not novated, such Insurance Contract
shall for all purposes of this Agreement be deemed retroactive to the
Effective Date to be a Quota Share Policy.

"POLICYHOLDER" means each holder of an Insurance Contract that is
in force on the Effective Date.

"PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated as
of June 17, 1997, as amended, among Zenith, RISCORP National Insurance
Company, the Company, RISCORP Property Casualty Insurance Company, RISCORP,
Inc., RISCORP of Florida, Inc., RISCORP Management Services, Inc., RISCORP
Managed Care Services, Inc., RISCORP Insurance Services, Inc., CompSource,
Inc., RISCORP of Illinois, Inc., Independent Association Administrators
Incorporated, RISCORP Real Estate Holdings, Inc., RISCORP Acquisition, Inc.,
RISCORP West, Inc., RISCORP Services, Inc., RISCORP Staffing Solutions
Holdings, Inc., RISCORP Staffing Solutions, Inc. I and RISCORP Staffing
Solutions, Inc. II.

"QUOTA SHARE POLICIES" shall have the meaning set forth in Section 2.3
hereof.

ARTICLE II

BUSINESS REINSURED

Section 2.1. BUSINESS REINSURED. Subject to all of the terms and
conditions contained herein, the Company hereby

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cedes to Zenith, and Zenith hereby assumes as reinsurance from the Company,
all of the rights and obligations of the Company under each of the Insurance
Contracts.

Section 2.2. NOVATED POLICIES. Zenith shall be the successor to
the Company under the Novated Policies that it assumes as if the Novated
Policies were direct obligations originally issued by Zenith. Zenith shall
be substituted in the place and stead of the Company so as to effect a
novation of the respective Insurance Contracts and release the Company from
any and all rights and obligations thereunder. Each insured under a Novated
Policy shall disregard the Company as a party thereto and treat Zenith as if
it had been originally obligated thereunder except as otherwise provided
herein. The insureds shall file claims arising under the Novated Policies on
or after the effective date of such novation directly with Zenith. The
insureds under the Novated Policies shall also have a right to assert claims
related to such Novated Policies directly against Zenith and Zenith hereby
consents to be subject to such claims by any insured under the Novated
Policy; PROVIDED, HOWEVER, that the rights of any insured under any Insurance
Contract shall be limited to and consist of those rights set forth in such
Insurance Contract (including any rider or endorsement thereto), and no
insured shall have the right to receive any greater amount under any
Insurance Contract than such insured would have had in the absence of this
Agreement (except that in assessing such right no effect shall be given to
any bankruptcy, liquidation, insolvency, reorganization or moratorium of the
Company, or the effect of laws or legal procedures affecting enforcement of
creditors' rights against the Company generally). Payments made to insureds
in discharge of obligations on Novated Policies to provide direct coverage to
insureds will diminish any obligation in respect to those Novated Policies
which Zenith may have to the estate of the Company if it shall be in
receivership, liquidation or rehabilitation proceedings.

Section 2.3. QUOTA SHARE POLICIES. To the extent Zenith has not
for any reason assumed by novation any Insurance Contracts or Insurance
Liabilities, Zenith shall accept and reinsure, on a quota share basis, 100%
of Insurance Liabilities under such Insurance Contracts (the "Quota Share
Policies"), in accordance with the terms and conditions of this Agreement,
and hereby agrees to pay directly, on behalf of the Company, any claims or
losses reinsured under this Agreement which arise under such Quota Share
Policies; PROVIDED, HOWEVER, that the insureds under such Quota Share
Policies shall not have the right to assert claims related to such Quota
Share Policies directly against Zenith. A payment made to an insured in
discharge of obligations of RISCORP to provide direct coverage to the insured
will diminish the obligation in respect thereof which Zenith may have to the
estate of the Company if it shall be in receivership, liquidation or
rehabilitation proceedings.

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Section 2.4. TERMS; CONDITIONS. All Insurance Liabilities for
which Zenith shall assume liability hereunder, either as Novated Policies or
Quota Share Policies, are subject in all respects to the same written terms,
conditions, waivers, modifications, alterations and cancellations as the
Insurance Contracts. Zenith accepts and assumes the Insurance Liabilities
subject to all defenses, setoffs and counterclaims to which the Company would
be entitled with respect to the Insurance Contracts. The parties agree that
no such defenses, setoffs or counterclaims are waived under this Agreement
and that as of the Effective Date, Zenith shall be fully subrogated to all
such defenses, setoffs and counterclaims and be entitled to the full benefits
thereof.

ARTICLE III

ASSUMPTION CERTIFICATES

Section 3.1. NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION.(a)
Zenith, with the cooperation and assistance of the Company, shall prepare for
mailing to every Policyholder a Notice of Transfer and Certificate of
Assumption, including a form for rejection or acceptance and a self-addressed
return envelope, substantially in the form attached hereto as EXHIBIT A
(collectively, the "Policyholder Notices"), subject to changes required by
state law or required by any state insurance regulator as a condition for
approval of the mailing of such Policyholder Notices to Policyholders. The
Company shall cooperate and assist Zenith in the preparation and mailing of
the Policyholder Notices as provided herein. Zenith shall mail Policyholder
Notices by certified mail, return receipt requested, to the Policyholders
located in a particular state within thirty days of receipt of all regulatory
approvals necessary for such mailing.

(b) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days of receipt of all regulatory
approvals necessary for such mailing, to each holder of an Insurance Contract
which expired without renewal during the two year period immediately
prececeding the Effective Date a Notice of Transfer and Assumption
substantially in the form attached hereto as EXHIBIT B (collectively, the
"Expired Policy Notices"), subject to changes required by state law or
required by any state insurance regulator as a condition for approval of the
mailing of such Expired Policy Notices to said holders of Insurance Contracts
and Claimants.

(c) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days of the Effective Date, to
each Claimant who has an open claim on the Effective Date, a Notice
substantially in the form attached hereto as EXHIBIT C (collectively, the
"Claimant Notices"), subject to changes required by state law or required by
any state

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insurance regulator as a condition for approval of the mailing of such
Claimant Notices to said holders of Insurance Contracts and Claimants. In
addition, Zenith, with the cooperation and assistance of the Company, shall
prepare and mail a Claimant Notice to each Claimant who is not a Policyholder
(as defined herein), but who, after the Effective Date, files a claim under
any Insurance Contract.

Section 3.2. EFFECT OF NOTICE. A Policyholder shall be deemed to
have accepted the transfer and assumption under this Agreement (1) upon
receipt by Zenith of the Policyholder's written acceptance of the transfer
and assumption, or (2) with respect to any Insurance Contract issued or
issued for delivery in a state where written acceptance by the Policyholder
is not required by the appropriate regulatory authority to effect an
assumption and novation, upon taking such action, or failing to take any
action following the mailing of the Policyholder Notice, as specified in
Schedule 3.2. attached hereto.

ARTICLE IV

POLICY ADMINISTRATION

Section 4.1. POLICY ADMINISTRATION BY ZENITH. The Company grants
to Zenith authority in all matters relating to the administration of the
Insurance Contracts assumed by Zenith to the extent such authority may be
granted pursuant to applicable law and agrees to cooperate fully with Zenith
in the transfer of such administration. Zenith agrees, at its expense, to be
responsible for such administration. In order to assist and to evidence more
fully the substitution of Zenith in the place and stead of the Company, the
Company hereby nominates, constitutes and appoints Zenith as its
attorney-in-fact with respect to the rights, duties, privileges and
obligations of the Company in and to the Insurance Contracts assumed by
Zenith, with full power and authority to act in the name, place and stead of
the Company with respect to such Insurance Contracts including, without
limitation, the power without reservation, to service all such Insurance
Contracts, to adjust, to defend, to settle and to pay all claims, to recover
salvage and subrogation for any losses incurred and to take such other and
further actions as may be necessary or desirable to effect the transactions
contemplated by this Agreement. In addition to other responsibilities set
forth in this Agreement, Zenith shall also issue on the Company's behalf, but
wherever possible in the name of Zenith, all Insurance Contracts assumed by
Zenith which the Company is contractually or otherwise obligated to issue on
and after the Effective Date.

Section 4.2. FORWARDING OF NOTICES AND OTHER COMMUNICATIONS. The
Company agrees that, after the Effective Date, it will forward to Zenith,
within forty-five (45) days of receipt, all notices and other written
communications received by it relating to the Insurance Contracts assumed by
Zenith

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(including, without limitation, all inquiries or complaints from state
insurance regulators, agents, brokers and insureds and all notices of claims,
suits and actions for which it receives services of process).

ARTICLE V

CONSIDERATION

Section 5.1. INITIAL CONSIDERATION. In consideration of Zenith's
assumption of the Insurance Liabilities hereunder, the Company shall transfer
to Zenith the Transferred Assets pursuant to Section 2.01 of the Purchase
Agreement related to the Company's Insurance Liabilities.

Section 5.2. FUTURE PREMIUMS. Zenith is entitled to receive all
premiums and other consideration paid on or after the Effective Date with
respect to the Insurance Contracts. In the event that the Company receives
any premiums or other consideration with respect to an Insurance Contract on
or after the Effective Date, it shall promptly remit such premiums or other
consideration to Zenith, along with pertinent information in its possession
relating to such premiums, including information as to the Insurance Contract
and period to which such premium relates. Zenith shall assume all
responsibility for billing and collection of premiums. The Company shall
reasonably cooperate with Zenith in causing insureds under the Insurance
Contracts to pay premiums to Zenith after the Effective Date.

ARTICLE VI

RESERVES; CREDIT FOR REINSURANCE

Section 6.1. RESERVES; CREDIT FOR REINSURANCE. Zenith shall
maintain all insurance licenses necessary to permit the Company to obtain
full financial statement credit in all applicable jurisdictions for the
reinsurance provided to it by Zenith pursuant to this Agreement, PROVIDED
that if Zenith shall fail to maintain such licenses, it shall provide the
Company with collateral security permitted under applicable law for purposes
of obtaining financial statement credit for the reinsurance provided under
this Agreement. Any unearned premium, loss and loss adjustment expense
reserves required by the foregoing in no event shall be less than the amounts
required under the law of any jurisdiction having regulatory authority with
respect to the establishment of reserves relating to the Insurance Contracts.

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ARTICLE VII

ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS

Section 7.1. ASSIGNMENT. (a) As of the Effective Date, the
Company shall transfer, set over, assign and convey to Zenith all of its
right, title and interest in any amount held by or due from the assuming
reinsurers under the reinsurance agreements listed in SCHEDULE 7.1-A
("Schedule 7.1-A Reinsurance"), including (i) amounts held by or which may
become due from the assuming reinsurers thereunder for losses or loss
adjustment expenses on Insurance Contracts for which the Reinsurer has
assumed liability or for losses paid by the Company prior to the Effective
Date, and (ii) letters of credit, trust funds and other security mechanisms
outstanding for the benefit of the Company pursuant to the terms of any of
the Schedule 7.1-A Reinsurance. The Company hereby authorizes Zenith, as of
the Effective Date, to prepare and submit, on the Company's behalf and in the
Company's name, all statements and reports required of the Company under the
Schedule 7.1-A Reinsurance, and further authorizes Zenith to take all other
actions required of the Company under the Schedule 7.1-A Reinsurance or
otherwise permitted thereunder, and Zenith agrees to prepare and submit such
reports and take all such actions, except that Zenith shall not undertake to
pay on behalf of the Company, and shall not be obligated hereunder to pay,
any amount due to the reinsurers under the Schedule 7.1-A Reinsurance unless
the Company's obligation to pay such amount shall have been accrued as a
liability on the Final Business Balance Sheet.

(b) As of the Effective Date, the Reinsurer shall be substituted
for and succeed to all of the rights and liabilities of the Company, under
the reinsurance agreements listed in SCHEDULE 7.1-B (the "Schedule 7.1-B
Reinsurance" and, together with the Schedule 7.1-A Reinsurance, the "Ceded
Reinsurance") and shall be recognized for all purposes as the "Company"
thereunder in substitution for the Company. The Company shall transfer, set
over, assign and convey to Zenith all of its rights and obligations of any
nature whatsoever under the Schedule 7.1-B Reinsurance, including (i) amounts
held by or which may become due from assuming reinsurers with respect to any
reinsurance ceded by the Company to the reinsurer thereunder, and (ii)
letters of credit, trust funds and other security mechanisms outstanding for
the benefit of the Company pursuant to the terms of any of the Ceded
Reinsurance. Zenith shall accept such conveyance, transfer and assignment of
the Company's rights under the Schedule 7.1-B Reinsurance and assumes all of
the Company's obligations under the Schedule 7.1-B Reinsurance existing on or
arising after the Effective Date. The assignment and assumption of the
Schedule 7.1-B Reinsurance effected by this Section 7.1 shall be effective
only if such assignment (i) is permitted under the terms of such Schedule
7.1-B Reinsurance or as otherwise consented to by the reinsurer thereunder,
and (ii) shall preserve fully the obligations of the reinsurers thereunder in
respect of

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the Insurance Contracts. If the Company's rights and obligations under any
such Schedule 7.1-B Reinsurance are not assigned to and assumed by Zenith,
(i) after the Effective Date, Zenith shall be responsible for the payment of
all premiums and other considerations required to be paid by the Company in
respect of any of the Schedule 7.1-B Reinsurance, (ii) all reinsurance
recoveries attributable to any of the Schedule 7.1-B Reinsurance are assigned
and shall accrue to the benefit of Zenith hereunder by operation of this
Section 7.1 and shall, upon receipt thereof by the Company, be paid promptly
thereby to Zenith upon and in accordance with its direction, and (iii) such
assignment shall be effective at such time as the assignment may be effected
while preserving fully the obligations of the reinsurer under the respective
Schedule 7.1-B Reinsurance.

(c) The Company shall reasonably cooperate with Zenith in causing
reinsurers under the Ceded Reinsurance to pay reinsurance recoveries to
Zenith after the Effective Date.

Section 7.2. CEDED REINSURANCE COLLATERAL. To the extent
necessary to effect any transfer or assignment pursuant to this Section 7.1
of any assumed reinsurance, the Company hereby appoints Zenith as
attorney-in-fact for the Company to act for and on behalf of it with respect
to letters of credit, trust funds and other security mechanisms outstanding
for the benefit of the Company pursuant to the terms of any of the Ceded
Reinsurance, and the Company shall execute and deliver to Zenith such
additional instruments as Zenith may reasonably request to give effect to
such appointment as attorney-in-fact, and to provide appropriate evidence
that the Company has assigned to Zenith all of its rights under the Ceded
Reinsurance with respect to any such letters of credit, trust funds or other
accounting mechanism. Zenith shall use its reasonable best efforts to the
extent deemed reasonably necessary by Zenith, to cause the reinsurers under
the Ceded Reinsurance to provide replacement letters of credit, trust funds
or other security mechanisms, as applicable, naming Zenith as the beneficiary
thereof in amounts and with terms substantially similar to those currently
provided by such reinsurers for the benefit of the Company.

ARTICLE VIII

INDEMNIFICATION

Section 8.1. SOLE REMEDY. Notwithstanding anything to the
contrary in this Agreement, the Company shall not settle any claim, waive any
right, defense, setoff or counterclaim with respect to, or amend, commute or
terminate, any Insurance Contract or Ceded Reinsurance without the prior
written consent of Zenith, except in accordance with the provisions of the
indemnities referred to in the following sentence. The Company's sole and
exclusive remedy with respect to a breach of this Agreement shall be the
indemnities provided by Section 9.02 of

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the Purchase Agreement, except that any dispute between the parties arising
hereunder for which such indemnities are being sought shall be subject to
arbitration pursuant to Article XV hereof.

ARTICLE IX

GENERAL PROVISIONS

Section 9.1. INSPECTION. Zenith and the Company, or their
designated representatives, may inspect, at the place where such records are
located, any and all books and records of the other parties hereto reasonably
relating to this Agreement, during normal business hours and upon reasonable
notice. The rights of the parties under this Section 9.1 shall survive
termination of this Agreement.

Section 9.2. MISUNDERSTANDINGS AND OVERSIGHTS. Any delay,
omission, error or failure to pay amounts due or to perform any other act
required by this Agreement that is unintentional and caused by
misunderstanding or oversight shall not be held to relieve either party to
this Agreement from any obligation hereunder if such delay, omission, error
or failure is corrected within 20 Business Days of receipt of notice of such
delay, omission, error or failure and neither party shall have been
prejudiced.

Section 9.3. ADJUSTMENTS. If the liability of the Company under
any of the Insurance Contracts is changed as a result of a change required by
law or regulation or any other reason, Zenith will share in the change
proportionately (100%) to the amount reinsured hereunder.

Section 9.4. COMMUNICATIONS RELATING TO THE INSURANCE CONTRACTS.
After the Effective Date, the Company and Zenith each shall forward promptly
to the other copies of all notices and other written communications it
receives relating to the Insurance Contracts (including without limitation,
all inquiries and complaints from state insurance regulators, brokers and
other service providers and reinsureds, all policyholder complaints and
complaints received from other claimants under the Insurance Contracts and
all notices of claims, suits and actions for which it receives service of
process). As used in this Section, "complaint" means any written
communication primarily expressing a grievance against the Company or Zenith.

Section 9.5. DUTY OF COOPERATION. The Company and Zenith shall
cooperate fully with the other in all reasonable respects in order to
accomplish the objectives of this Agreement.

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ARTICLE X

ACCOUNTING

Section 10.1. ACCOUNTING REPORTS. On or before the last Business
Day of each month, Zenith will provide the Company with reports of activities
under this Agreement for the preceding month. Such reports shall show any
amounts due the Company or Zenith, as the case may be, as reimbursement for
paid claims, premiums or other amounts due with respect to the Insurance
Contracts. The net balance due either party, as indicated in the monthly
report, shall be remitted to the other party within 15 days of the delivery
of said monthly report. The requirements of this Section 10.1 shall
terminate if, for twelve consecutive months, no amounts are reported as due
either party with respect to the Insurance Contracts; PROVIDED, such
requirements shall be reinstated and shall continue in effect for an
additional twelve months if at any time following such termination, any
balance or amount becomes due either party under this Agreement.

Section 10.2. FINANCIAL STATEMENT INFORMATION. On or before the
last business day of each January, April, July and October, Zenith shall
provide the Company with a quarterly or annual report containing the
financial, accounting and actuarial information necessary to prepare
regulatory, tax and GAAP monthly, quarterly and annual financial statements
and returns and satisfy other related requirements, including reserve and
related calculations respecting the Insurance Contracts in the form
reasonably required by the Company, and will maintain or cause to be
maintained the data processing systems that will enable Zenith to provide
such information. The Company shall cooperate with Zenith in preparing such
reports and shall supply such information as Zenith requires to prepare such
statements and returns and satisfy such requirements. The requirements of
this Section shall terminate automatically upon the termination of the
reporting requirements of Section 10.1 and shall be reinstated automatically
upon the reinstatement of such reporting requirements.

Section 10.3. REPORTS TO INSURANCE DEPARTMENTS. Zenith and the
Company will promptly furnish to the other, copies of any and all filings
with, and reports or communications received from, any regulatory authority
which relate directly and materially to the Insurance Contracts, including,
without limitation, each annual statement, each quarterly financial report to
the insurance department of the party's domicile and each report on periodic
examination issued by the insurance department of the party's domicile to the
extent it relates to the Insurance Contracts. The requirements of this
Section shall terminate automatically upon the termination of the reporting
requirements of Section 10.1 and shall be reinstated automatically upon the
reinstatement of such reporting requirements.

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ARTICLE XI

TERMINATION

Section 11.1. TERMINATION. Except as mutually agreed by the
Company and Zenith, this Agreement shall be unlimited in duration.

ARTICLE XII

INSOLVENCY

Section 12.1. PAYMENTS BY ZENITH. Zenith hereby agrees that all
amounts due under this Agreement with respect to all Quota Share Policies
shall be payable by Zenith on the basis of the liability of the Company under
such contracts, without diminution because of the insolvency, liquidation or
rehabilitation of the Company Insurance Subsidiary. Zenith shall make
payments due hereunder with respect to Quota Share Policies directly to the
Company or to its conservator, receiver, liquidator or other statutory
successor.

Section 12.2. CLAIMS. It is agreed that any conservator,
receiver, liquidator or statutory successor of the Company shall give prompt
written notice to Zenith of the pendency or submission of a claim under any
Insurance Contract. With respect to any Insurance Contract, during the
pendency of such claim, Zenith may investigate such claim and interpose, at
its own expense, in the proceeding where such claim is to be adjudicated, any
defense available to the Company or its conservator, receiver, liquidator or
statutory successor. The expense thus incurred by Zenith is chargeable
against the Company as a part of the expense of insolvency, liquidation or
rehabilitation to the extent of a proportionate share of the benefit which
accrues to the Company solely as a result of the defense undertaken by
Zenith. Where Zenith and other assuming companies are involved in the same
claim and a majority in interest elect to interpose a defense to such claim,
the expense shall be apportioned in accordance with the terms of the
insurance agreement as though such expense had been incurred by the Company.

ARTICLE XIII

OFFSET

Section 13.1. OFFSET. Notwithstanding any provisions of this
Agreement to the contrary, any balances or amounts due from one party to the
other under this Agreement are deemed mutual debts or credits, as the case
may be, and shall be set off, and only the balance shall be allowed or paid.

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ARTICLE XIV

RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES

Section 14.1. SOLE BENEFICIARY. Zenith's quota share reinsurance
of 100% of the Insurance Liabilities of the Company with respect to any of
the Quota Share Policies is intended for the sole benefit of the parties to
this Agreement and shall not create any right on the part of any
Policyholder, insured, claimant or beneficiary under such Quota Share
Policies against Zenith or any legal relation between such Policyholders,
insureds, claimants or beneficiaries and Zenith.

ARTICLE XV

ARBITRATION

Section 15.1. APPOINTMENT OF ARBITRATORS. Any dispute or
difference arising under this Agreement that cannot be resolved by agreement
among the parties hereto shall be decided by arbitration in accordance with
this Article XV. Any such arbitration shall be conducted expeditiously and
confidentially in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") as such rules shall be in effect on
the date of delivery of demand for arbitration. Any such arbitration shall
be heard and conducted in New York, New York. Notwithstanding the rules of
the AAA, the arbitration panel in any such arbitration shall consist of three
persons who must be disinterested current or retired officers of insurance or
reinsurance companies other than the parties to this Agreement or their
Affiliates. Within twenty days of delivery of any demand for arbitration
hereunder, the Company and Zenith shall each appoint one arbitrator, and the
two arbitrators so selected shall appoint the third arbitrator within twenty
days of their appointment. In the event the two selected arbitrators are
unable to agree upon the selection of a third arbitrator after reasonable
efforts, a panel of seven qualified persons shall be requested from the AAA.
The parties shall alternately strike one person with the last remaining
person being the third designated arbitrator; the party responding to the
initial demand for arbitration shall have the first turn. Each party shall
pay the fees of its own attorneys, expenses of witnesses and all other
expenses connected with the presentation of such party's case. One-half of
any remaining costs of any arbitration, including the cost of the record or
transcripts thereof, if any, administrative fees and all other fees involved
shall be paid by Zenith, and the remaining one-half shall be paid by the
Company.

Section 15.2. DECISION. The arbitrators shall render a decision
within 60 days of the end of the arbitration hearing. The arbitrators shall
consider customary and standard practices in the insurance business. They
shall decide by a majority vote of the arbitrators. All conclusions of law
reached by the

-12-

arbitrators shall be made in accordance with the internal substantive laws of
the State of New York without regard to conflict of laws principles. Any
award rendered by the arbitrators shall be accompanied by a written opinion
setting forth the findings of fact and conclusions of law relied upon in
reaching their decision. There shall be no appeal from their written
decision. Judgment may be entered on the decision of the arbitrators by any
court having jurisdiction.

Section 15.3. CONFIDENTIALITY. Zenith and the Company agree that
the existence, conduct and content of any arbitration shall be kept
confidential and no party shall disclose to any person any information about
such arbitration, except as may be required by law or for financial reporting
purposes in each party's financial statements.

Section 15.4. SURVIVAL OF ARTICLE. This Article XV shall survive
termination of this Agreement.

Section 15.5. OTHER ACTIONS. Submission of a matter to
arbitration shall be a condition precedent to any right to institute a
proceeding at law or in equity concerning such matter, except for injunctive
or other provisional relief pending the arbitration of a matter subject to
arbitration pursuant to this Agreement. Subject to the foregoing, each party
hereto consents to the non exclusive jurisdiction of the United States
District Court for the Southern District of New York (the "Chosen Court") in
respect of any claim arising out of, related to or contemplated by this
Agreement, (i) waives any objection to laying venue in any such action or
proceeding in the Chosen Court, (ii) waives any objection that at the Chosen
Court is an inconvenient forum or does not have jurisdiction over any party
hereto and (iii) agrees that service of process upon such party in any such
action or proceeding shall be effective if notice is given in accordance with
Section 16.02 of this Agreement.

ARTICLE XVI

TERRITORY

Section 16.1. TERRITORY. This Agreement shall apply to all
Insurance Contracts issued by the Company without territorial limitation.

ARTICLE XVII

TAXES

Section 17.1. TAXES. Zenith shall be responsible for and shall
pay all premium taxes which shall accrue on or after the Effective Date with
respect to the Insurance Contracts; the Company shall remain responsible for
the payment of, and Zenith

-13-

shall have no obligation to pay, any premium taxes which shall accrue prior
to the Effective Date which have not otherwise been accrued on the Final
Business Balance Sheet.

ARTICLE XVIII

MISCELLANEOUS PROVISIONS

Section 18.1. HEADINGS. Headings used herein are not a part of
this Agreement and shall not affect the terms hereof.

Section 18.2. NOTICES. All notices and communications hereunder
shall be in writing and shall be deemed given if delivered personally or sent
by overnight delivery service (providing for proof of delivery). All notices
or communications with Zenith under this Agreement shall be directed to:

Zenith Insurance Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇

with copies to:

LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.

All notices and communications with the Company under this Agreement shall be
directed to:

RISCORP, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.

with copies to:

Polsinelli, White, Bardman & Shalton, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.

▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.

Section 18.3. SEVERABILITY. If any term or provision of this
Agreement shall be held void, illegal or unenforceable,

-14-

the validity of the remaining portions or provisions shall not be affected
thereby.

Section 18.4. SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by either party without the prior written consent of the other. The
provisions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors
and assigns as permitted herein.

Section 18.5. NO THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided for in Article X of this Agreement, nothing in this
Agreement is intended or shall be construed to give any person, other than
the parties hereto, their successors and permitted assigns, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein, and Zenith shall not be directly liable hereunder
to any reinsured under any Insurance Contract.

Section 18.6. INTERPRETATION. For purposes of this Agreement, the
words "hereof," "herein," "hereby" and other words of similar import refer to
this Agreement as a whole unless otherwise indicated. Whenever the words
"include", "includes", or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". Whenever the
singular is used herein, the same shall include the plural, and whenever the
plural is used herein, the same shall include the singular, where appropriate.

Section 18.7. EXECUTION IN COUNTERPARTS. This Agreement may be
executed by the parties hereto in any number of counterparts and by each of
the parties hereto in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

Section 18.8. AMENDMENTS; ENTIRE AGREEMENT. This Agreement may be
amended only by written agreement of the parties. This Agreement, together
with the Purchase Agreement and the Ancillary Agreements, supersedes all
prior discussions and written and oral agreements and constitutes the sole
and entire agreement between the parties with respect to the subject matter
hereof.

-15-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the date first
above written.

ZENITH INSURANCE COMPANY

By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President

RISCORP INSURANCE COMPANY

By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President

-16-

SCHEDULE 3.2

STATE REQUIREMENTS FOR TRANSFER
AND NOVATION OF INSURANCE CONTRACTS

FLORIDA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the third, to be sent 30
days after the second, stating that the Policyholder will be
deemed to have accepted if no respense is recived within 30
days.

SCHEDULE 7.1-A REINSURANCE AGREEMENTS

1. Workers' Compensation Quota Share Reinsurance Agreement between RISCORP
Insurance Company, RISCORP Property and Casualty Insurance Company and
American Re-Insurance Company effective January 1, 1995 including
Endorsement Nos. E001 through E004 and Indemnity Agreements dated February
7, 1995.

2. RISCORP National Insurance Company Workers Compensation Quota Share
Agreement by and between RISCORP National Insurance Company and Chartwell
Reinsurance Company (50%), Swiss Reinsurance America Corp. (25%), and
Trenwick America Reinsurance Corp. (25%) effective October 1, 1996.

3. Workers Compensation Excess of Loss Reinsurance Agreement between RISCORP
Property and Casualty Insurance Company, RISCORP Insurance Company, and
RISCORP National Insurance Company and Continental Casualty Company
effective January 1, 1997.

4. Workers Compensation and Employers Liability Excess of Loss Reinsurance
Agreement between RISCORP Property & Casualty Insurance Company, RISCORP
Insurance Company and RISCORP National Insurance Company and Continental
PTO Casualty Company, effective January 1, 1997.

SCHEDULE 7.1-B REINSURANCE AGREEMENTS

1. Medical Excess of Loss Reinsurance Agreement between RISCORP Property &
Casualty Insurance Company and The Cologne Life Reinsurance Company
effective September 1, 1995.

2. Property Quota Share Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, Chartwell Reinsurance Company and
Great Lakes American Reinsurance Company effective January 1, 1996.

3. Casualty Excess of Loss Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.

4. Commercial Umbrella Quota Share Treaty between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.

5. Workers Compensation Quota Share Retrocessional Treaty Agreement between
Chartwell Reinsurance Company and RISCORP Insurance Company effective
September 1, 1995.

FLORIDA EXHIBIT A

RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION

IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.

TRANSFER OF POLICY

Zenith Insurance Company has agreed to replace RISCORP Insurance Company
as your insurer under [insert policy/certificate name and number] effective
[insert date]. Zenith Insurance Company's principal place of business is
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner
at [insert address and phone number].

Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.

YOUR RIGHTS

You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may
notify us in writing by signing and returning the enclosed pre-addressed,
postage-paid card or by writing to us at:

RISCORP Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
[fax]

IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.

IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY(30) DAYS AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE SENT A THIRD
NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30) DAYS
AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.

If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.

EFFECT OF TRANSFER

If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.

If you have any further questions about this agreement, you may contact
RISCORP Insurance Company or Zenith Insurance Company.

Sincerely,

___________________ ________________________

-2-

SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION

IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.

TRANSFER OF POLICY

You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
Insurance Company as your insurer under [insert policy/certificate name and
number] effective [insert date]. Zenith Insurance Company's principal place of
business is ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number].

YOUR RIGHTS

We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:

RISCORP Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
[fax]

IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.

IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A THIRD NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY (30) DAYS AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO
HAVE ACCEPTED THE TRANSFER.

If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.

EFFECT OF TRANSFER

If you have any further questions about this agreement, you may contact
RISCORP Insurance Company or Zenith Insurance Company.

Sincerely,

_________________________ ________________________
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

-4-

THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION

IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.

TRANSFER OF POLICY

Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North
Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.

YOUR RIGHTS

We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:

RISCORP Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
[fax]

IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.

IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS OF THE DATE OF
THIS THIRD AND FINAL NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.

If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.

-5-

EFFECT OF TRANSFER

If you have any further questions about this agreement, you may contact
RISCORP Insurance Company or Zenith Insurance Company.

Sincerely,

_________________________ ________________________

-6-

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

For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.

[NOTICE DATE]

RESPONSE CARD

_________ YES, I accept the transfer of my policy
from RISCORP Insurance Company to
Zenith Insurance Company.

_________ NO, I reject the proposed transfer of
my policy from RISCORP Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP
Insurance Company.

_____________ ______________________________
DATE SIGNATURE

NAME:
_______________________________________________________________________

STREET ADDRESS:
_______________________________________________________________________

CITY, STATE, ZIP:
_______________________________________________________________________

-7-

EXHIBIT B

RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

NOTICE AND CERTIFICATE OF ASSUMPTION

Policy No: ____________

Issued to: ____________

THIS CERTIFICATE certifies and you are hereby notified that, pursuant to the
terms of an Assumption and Indemnity Reinsurance Agreement, the above policy
and all of its endorsements (the "Policy") issued by RISCORP Insurance
Company have been assumed by Zenith Insurance Company. This change is
effective as of 12:01 a.m. Eastern Standard Time on [Effective Date].

All terms and conditions of the Policy remain unchanged, except that Zenith
Insurance Company shall be the insurer. Zenith Insurance Company shall have
all of the rights and obligations of RISCORP Insurance Company under the
Policy as though it had issued the Policy originally. All payments,
correspondence and inquiries such as policy changes, notices, claims or suits
or actions on the Policy shall in the future be submitted directly to Zenith
Insurance Company at the address indicated above.

This Notice and Certificate of Assumption forms a part of and should be
attached to the Policy issued by RISCORP Insurance Company.

IN WITNESS WHEREOF, RISCORP Insurance Company and Zenith Insurance
Company have each caused this Notice and Certificate of Assumption to be
signed by their duly authorized officers in facsimile to become effective as
their original signatures.

_________________________ ________________________

EXHIBIT C

ZENITH INSURANCE COMPANY
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

[ADDRESSEE]

Reference: RISCORP Insurance Company
Policy No: ____________
Issued to: ____________
Claim No: _____________

Dear Claimant:

This notice is sent to you in connection with your pending claim.
Please be advised that the captioned insurance policy (the "Policy") has been
assumed by Zenith Insurance Company, effective as of 12:01 a.m. Eastern Standard
Time on [Effective Date].

All correspondence and inquiries relating to your claim or suits or
actions on the Policy shall in the future be submitted directly to Zenith
Insurance Company at the address indicated above.

________________________

ZENITH INSURANCE COMPANY
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT by and between ZENITH INSURANCE COMPANY and RISCORP INSURANCE COMPANY Dated as of April 1, 1998

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