LASALLE RE HOLDINGS LTD, S-1/A, 1996-11-01

LASALLE RE HOLDINGS LTD
S-1/A, 1996-11-01
FIRE, MARINE & CASUALTY INSURANCE

Previous: HOME HEALTH CORP OF AMERICA INC \PA\, S-1, 1996-11-01

Next: GIBBS CONSTRUCTION INC, 10QSB, 1996-11-01

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1996

REGISTRATION NO. 333-14861
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------

AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
LASALLE RE HOLDINGS LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BERMUDA 6719 NOT APPLICABLE
(STATE OF INCORPORATION) (PRIMARY STANDARD (I.R.S. EMPLOYER
INDUSTRIAL IDENTIFICATION NO.)
CLASSIFICATION CODE NUMBER)
25 CHURCH STREET CT CORPORATION SYSTEM
P.O. BOX HM 1502 1633 BROADWAY
HAMILTON HM FX BERMUDA NEW YORK, NEW YORK 10019
(441) 292-3339 (212) 664-1666
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE,
TELEPHONE AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF NUMBER, INCLUDING AREA CODE, OF AGENT
REGISTRANT'S FOR SERVICE)
PRINCIPAL EXECUTIVE OFFICES)
COPIES TO:
RICHARD WARREN SHEPRO ALEXANDER M. DYE
MAYER, BROWN & PLATT LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
190 SOUTH LASALLE STREET 125 WEST 55TH STREET
CHICAGO, ILLINOIS 60603-3441 NEW YORK, NEW YORK 10019-5389
(312) 782-0600 (212) 424-8000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1)(2) FEE(3)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, par value $1.00 3,622,500
per share..................... shares $26.875 $97,354,688 $29,502
- -------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Includes Common Shares subject to an over-allotment option granted by the
Selling Shareholders to the U.S. Underwriters.

(3) $29,622 was previously paid.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus, one to be used
in connection with a United States and Canadian offering (the "U.S.
Prospectus") and one to be used in a concurrent international offering outside
the United States and Canada (the "International Prospectus"). The U.S.
Prospectus and the International Prospectus are identical except for the front
and back cover pages. The form of U.S. Prospectus included herein is followed
by the front cover page and the back cover page to be used in the
International Prospectus. Each of the pages for the International Prospectus
included herein is labeled "Alternate Page."
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED NOVEMBER 1, 1996

PROSPECTUS

3,150,000 SHARES

LASALLE RE HOLDINGS LIMITED

COMMON SHARES

--------

Of the 3,150,000 common shares, par value $1.00 per share (the "Common
Shares"), of LaSalle Re Holdings Limited (the "Company") offered hereby,
2,520,000 Common Shares are being offered in the United States and Canada and
630,000 Common Shares are being offered in a concurrent international offering
outside the United States and Canada (collectively, the "Offerings"). The
public offering price and the aggregate underwriting discount per Common Share
will be identical for each of the Offerings. See "Underwriting."

All of the 3,150,000 Common Shares offered hereby are being offered by
certain shareholders of the Company (the "Selling Shareholders"). The Company
will not receive any proceeds from the sale of the Common Shares. See "Use of
Proceeds."

The Company is a holding company with no operations or significant assets
other than its ownership of a majority of the capital stock of LaSalle Re
Limited ("LaSalle Re"). Upon completion of the Offerings, certain founding
shareholders of the Company will own approximately 55% of the Common Shares and
approximately 27% of the capital stock of LaSalle Re (53% and 26% if the U.S.
Underwriters' over-allotment option is exercised in full). As a result, such
shareholders, if they act in concert, will be able to control most fundamental
decisions affecting the Company, including the election of directors and the
merger or sale of the Company. See "Risk Factors--Control by Founding
Shareholders," "Certain Transactions," "Principal and Selling Shareholders" and
"Description of Capital Stock."

SEE "RISK FACTORS" ON PAGE 11 FOR A DESCRIPTION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS
OF THE COMMON SHARES.

--------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS (1) SHAREHOLDERS (2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Common Share................... $ $ $
- --------------------------------------------------------------------------------
Total (3).......................... $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) The Company has agreed to indemnify the U.S. Underwriters and the Managers
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offerings estimated at $550,000 payable by
the Company.

(3) The Selling Shareholders have granted the U.S. Underwriters a 30-day option
to purchase up to 472,500 additional Common Shares on the same terms as set
forth above to cover over-allotments, if any. If the U.S. Underwriters
exercise such option in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Selling Shareholders will be
$ , $ and $ , respectively. See "Underwriting."

--------

The Common Shares are being offered by the several U.S. Underwriters named
herein, subject to prior sale, when, as and if accepted by them and subject to
certain conditions. It is expected that certificates for the Common Shares
offered hereby will be available for delivery on or about , 1996
at the offices of Smith Barney Inc., 388 Greenwich Street, New York, New York
10013.

--------

SMITH BARNEY INC.

LAZARD FRERES & CO. LLC MORGAN STANLEY & CO.
INCORPORATED
, 1996
<PAGE>

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.

DURING THE OFFERINGS, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR
THE ACCOUNTS OF OTHERS IN THE COMMON SHARES PURSUANT TO EXCEPTIONS FROM RULES
10B-6, 10B-7 AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

IN CONNECTION WITH THE OFFERINGS, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET-
MAKING TRANSACTIONS IN THE COMMON SHARES ON THE NASDAQ NATIONAL MARKET IN
ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE
"UNDERWRITING."

FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY
OF THIS DOCUMENT. THE BUYER IN NORTH CAROLINA UNDERSTANDS THAT NEITHER THE
COMPANY NOR ITS SUBSIDIARIES ARE LICENSED IN NORTH CAROLINA PURSUANT TO
CHAPTER 58 OF THE NORTH CAROLINA GENERAL STATUTES, NOR COULD THEY MEET THE
BASIC ADMISSIONS REQUIREMENTS IMPOSED BY SUCH CHAPTER AT THE PRESENT TIME.

CONSENT UNDER THE EXCHANGE CONTROL ACT 1972 (AND REGULATIONS THEREUNDER) HAS
BEEN OBTAINED FROM THE BERMUDA MONETARY AUTHORITY FOR THE ISSUE OF THE SHARES
BEING OFFERED PURSUANT TO THE OFFERINGS. IN ADDITION, A COPY OF THIS DOCUMENT
HAS BEEN DELIVERED TO THE REGISTRAR OF COMPANIES IN BERMUDA FOR FILING
PURSUANT TO THE COMPANIES ACT 1981 OF BERMUDA. IN GIVING SUCH CONSENT AND IN
ACCEPTING THIS PROSPECTUS FOR FILING, THE BERMUDA MONETARY AUTHORITY AND THE
REGISTRAR OF COMPANIES IN BERMUDA ACCEPT NO RESPONSIBILITY FOR THE FINANCIAL
SOUNDNESS OF ANY PROPOSAL OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE
OR OPINIONS EXPRESSED HEREIN.

THESE SECURITIES MAY NOT BE OFFERED OR SOLD TO PERSONS IN THE UNITED KINGDOM
EXCEPT TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING,
HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE
PURPOSES OF THEIR BUSINESSES, OR OTHERWISE IN CIRCUMSTANCES WHICH DO NOT
CONSTITUTE AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM WITHIN THE MEANING OF
THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995. ALL APPLICABLE PROVISIONS OF
THE FINANCIAL SERVICES ACT 1986 OF THE UNITED KINGDOM MUST BE COMPLIED WITH IN
RELATION TO ANYTHING DONE IN RELATION TO THESE SECURITIES IN, FROM OR
OTHERWISE INVOLVING THE UNITED KINGDOM. THIS DOCUMENT MAY NOT BE ISSUED OR
PASSED ON TO ANY PERSON IN THE UNITED KINGDOM UNLESS THAT PERSON IS OF A KIND
DESCRIBED IN ARTICLE 11(3) OF THE FINANCIAL SERVICES ACT 1986 (INVESTMENT
ADVERTISEMENTS) (EXEMPTIONS) ORDER 1996 OR IS A PERSON TO WHOM THIS DOCUMENT
MAY OTHERWISE LAWFULLY BE ISSUED OR PASSED ON.

2
<PAGE>

In this Prospectus, references to "dollar" and "$" are to United States
currency, and the terms "United States" and "U.S." mean the United States of
America, its states, its territories, its possessions and all areas subject to
its jurisdiction.

ENFORCEMENT OF CIVIL LIABILITIES UNDER
UNITED STATES FEDERAL SECURITIES LAWS

The Company is a Bermuda company and certain of its officers and directors
are residents of various jurisdictions outside the United States. All or a
substantial portion of the assets of the Company and such officers and
directors, at any one time, are or may be located in jurisdictions outside the
United States. Therefore, it may be difficult for investors to effect service
of process within the United States on any of such persons or to enforce
against them judgments of United States courts predicated upon civil liability
provisions of the United States federal securities laws. Notwithstanding the
foregoing, the Company has appointed CT Corporation System, 1633 Broadway, New
York, New York 10019, its agent to receive service of process with respect to
actions against it arising out of or in connection with the United States
federal securities laws or out of violations of such laws in any federal or
state court in the United States relating to the transactions covered by this
Prospectus. The Company has been advised by Conyers, Dill & Pearman, its
Bermuda counsel, that there is a doubt as to whether the courts of Bermuda
would enforce (i) judgments of United States courts obtained in actions
against such persons or the Company predicated upon the civil liability
provisions of the United States federal securities laws and (ii) original
actions brought in Bermuda against such persons or the Company predicated
solely upon United States federal securities laws. There is no treaty in
effect between the United States and Bermuda providing for such enforcement,
and there are grounds upon which Bermuda courts may not enforce judgments of
United States courts. Certain remedies available under the United States
federal securities laws would not be allowed in Bermuda courts as contrary to
that jurisdiction's public policy.

AVAILABLE INFORMATION

The Company is subject to the reporting requirements of the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the United States Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company with the
Commission can be inspected without charge and copied, upon payment of
prescribed rates, at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Seven
World Trade Center, Suite 1300, New York, New York 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2551. Copies of
such material and any part thereof are also available by mail from the Public
Reference Section of the Commission, at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Copies of such material are
also available and can be copied at the offices of the Nasdaq National Market,
1735 K Street, Washington, D.C. 20006. In addition, the Commission maintains a
Web site on the Internet at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission, including the Company.

The Company has filed with the Commission a registration statement (herein,
together with all amendments, exhibits and schedules thereto, referred to as
the "Registration Statement") under the United States Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Common Shares offered
hereby. This Prospectus, which is part of the Registration Statement, does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with rules and regulations of the
Commission. For further information with respect to the Company and the Common
Shares, reference is hereby made to the Registration Statement. Statements
made in this Prospectus concerning the contents of any contract, agreement or
other document are not necessarily complete. With respect to each such
contract, agreement or other document filed with the Commission as an exhibit
to the Registration Statement, reference is made to such exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.

The Company currently will be treated as a domestic corporation for purposes
of certain requirements of the Exchange Act, including the proxy rules,
because the Company currently does not fit the definition of a

3
<PAGE>

"foreign private issuer" within the meaning of Rule 3b-4 under the Exchange
Act. Pursuant to current Rule 3b-4, a "foreign private issuer" is any foreign
issuer other than a foreign government, except an issuer meeting the following
conditions: (i) more than 50% of the outstanding voting securities are held of
record by residents of the United States and (ii) any of the following: (1)
the majority of the executive officers or directors are United States citizens
or residents, (2) more than 50% of the assets are located in the United States
or (3) the business is administered principally in the United States. By
virtue of (i) and (ii)(1), the Company currently is not and does not expect
that it will become a "foreign private issuer," although there is no assurance
of such. If the Company were to become a "foreign private issuer," it would be
exempted from the proxy and short-swing profit rules under Sections 14 and 16
of the Exchange Act and, for reporting purposes under the Exchange Act, would
be subjected to rules applicable to "foreign private issuers."

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Forward-looking statements are statements other than historical
information or statements of current condition. Some forward-looking
statements may be identified by use of terms such as "believes,"
"anticipates," "intends" or "expects." The forward-looking statements
contained in this Prospectus are generally located in the material set forth
under the headings "Prospectus Summary," "Risk Factors," "Dividend Policy,"
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" and "Business," but may be found in other locations as well. These
forward-looking statements relate to the plans and objectives of the Company
for future operations, including the Company's objective to seek average
annualized returns on shareholders' equity of 20% to 25% over time and the
Company's policy to distribute as dividends in each fiscal year 50% to 60% of
the Company's net income from the prior fiscal year, if any, on a quarterly
basis. In light of the risks and uncertainties inherent in all future
projections, including but not limited to those set forth under the heading
"Risk Factors," the inclusion of forward-looking statements in this Prospectus
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved. Many factors
could cause the Company's actual results to differ materially from those in
the forward-looking statements, including the following: (i) the occurrence of
catastrophic events with a frequency or severity exceeding the Company's
estimates; (ii) a decrease in the level of demand for property catastrophe
reinsurance; (iii) an increase in the supply of property catastrophe
reinsurance as a result of additional capital provided by recent or future
market entrants or by existing property catastrophe reinsurers; (iv) increased
competitive pressure from current reinsurers and future market entrants; (v) a
competitive disadvantage resulting from certain of the Company's principal
competitors having higher financial ratings than the Company, any lowering or
loss of one of the Company's financial ratings in the future or the Company's
non-admitted status in United States jurisdictions; (vi) a major decrease in
the cession of business from CNA Financial Corporation (together with its
affiliates, "CNA") to the Company; (vii) loss of the services of any of the
Company's executive officers; (viii) the occurrence of a single catastrophic
event affecting multiple geographic zones; (ix) actual loss expenses exceeding
the Company's loss reserve, which is necessarily based on actuarial and
statistical projections of ultimate loss expenses; (x) changing rates of
inflation and other economic conditions, which could have an adverse impact on
loss payments, investment returns and premiums; (xi) losses due to foreign
currency exchange rate fluctuations or the failure of a counterparty to
perform under any of the Company's foreign exchange contracts; (xii) the
termination of any of the Company's service agreements; (xiii) the passage of
federal or state legislation subjecting the Company to supervision or
regulation in the United States; (xiv) challenges by insurance regulators in
the United States or the United Kingdom to the Company's claim of exemption
from insurance regulation under current laws; (xv) a contention by the United
States Internal Revenue Service (the "IRS") that the Company or LaSalle Re is
engaged in the conduct of a trade or business within the U.S.; and (xvi) sales
of substantial amounts of the Common Shares in the public markets following
the Offerings, or the perception that such sales could occur. The foregoing
review of important factors should not be construed as exhaustive and should
be read in conjunction with other cautionary statements that are included in
this Prospectus. The Company undertakes no obligation to release publicly the
results of any future revisions it may make to forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.

4
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and consolidated financial
statements, including the notes thereto, appearing elsewhere in this
Prospectus. Unless otherwise indicated, all financial information presented
herein has been prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") and the information contained in this Prospectus assumes
that the Underwriters' over-allotment option has not been exercised. Certain
terms used herein are defined in "Glossary of Selected Insurance and
Reinsurance Terms." Unless the context otherwise requires, references herein to
the "Company" include LaSalle Re Holdings Limited ("Holdings"), the issuer of
the Common Shares offered hereby, LaSalle Re Limited ("LaSalle Re"), the
Company's insurance subsidiary, LaSalle Re (Services) Limited ("LaSalle Re
Services"), the Company's London representative office, and LaSalle Re
Corporate Capital Ltd. ("LaSalle Re Capital"), an investment holding company.

THE COMPANY

OVERVIEW

The Company writes high severity, low frequency reinsurance on a worldwide
basis through its subsidiary, LaSalle Re. The Company primarily writes property
catastrophe reinsurance and also writes selected other lines of reinsurance
when it believes that market conditions are favorable. These lines currently
include property risk excess, property pro rata treaty, casualty clash, marine,
crop hail, aviation and satellite. The Company believes that these other lines
will constitute a growing portion of the Company's total portfolio of
reinsurance business, helping to moderate the volatility of its property
catastrophe reinsurance exposures.

The Company has been successful in attaining a selective and geographically
diverse portfolio of property catastrophe reinsurance risks. In the year ended
September 30, 1996, 41.7% of the Company's net premiums written represented
U.S.-based risks, 11.6% represented continental Europe-based risks, 8.6%
represented U.K.-based risks and 36.2% represented risks located in a variety
of other geographic zones elsewhere in the world. As a result of long-term
relationships between the Company's management and certain clients and brokers,
the Company has developed a strong base of regional business in discrete zones
within the U.S. This business assists the Company in diversifying its U.S.-
based risks and makes more efficient use of its capital by limiting multi-zone
exposures. In the year ended September 30, 1996, this regional business
represented a significant component of the Company's U.S.-based net premiums
written.

At September 30, 1996, the Company had total shareholders' equity and
minority interest (together, "Combined Equity") of $486.9 million compared to
$400.8 million at September 30, 1995. It achieved annualized returns on average
Combined Equity of 29.2% and 26.6%, respectively, and combined ratios of 46.0%
and 52.6%, respectively, for the years ended September 30, 1996 and 1995. In
addition, its loss and loss expense ratios were 26.4% and 35.5% for the same
periods. The Company wrote net premiums of $190.2 million and $201.9 million,
respectively, for the years ended September 30, 1996 and 1995. There can be no
assurance that the Company will achieve similar results in the future.

CAPITAL MANAGEMENT STRATEGY

The Company has adopted a capital management strategy focused on balancing
capital levels with aggregate exposures while seeking to achieve average
annualized returns on shareholders' equity of 20% to 25% over time. Consistent
with this strategy, in October 1996, the Company adopted a dividend policy
pursuant to which it intends to distribute in each fiscal year 50% to 60% of
the Company's net income from the prior fiscal year, if any, on a quarterly
basis. In 1997, the Company expects to distribute 50% of its fiscal 1996 net
income. Based on the Company's net income for the year ended September 30,
1996, the Company currently expects to pay a quarterly dividend of $0.71 per
share in January 1997. See "Dividend Policy." In support of its dividend policy
and to protect its capital base, the Company currently is negotiating the
purchase of non-traditional, multi-year

5
<PAGE>

reinsurance protection to reduce earnings volatility resulting from one or more
severe catastrophic events over a period of years. There can be no assurance
that the Company will be able to obtain such reinsurance on terms acceptable to
it.

As part of its capital management strategy, the Company also intends to
repurchase up to $50 million of Common Shares in open market or privately
negotiated transactions from time to time depending on market conditions and
the Company's capital and liquidity requirements. The Company expects this
share repurchase program to commence in early calendar year 1997.

The Company believes that its capital management strategy is attractive to
investors, while its level of capital and surplus offers financial security to
cedents and demonstrates to brokers and clients a commitment to property
catastrophe reinsurance. The Company's ability to implement its capital
management strategy in the future will depend on various factors, some of which
are beyond its control, and is subject to change at the discretion of the
Company's Board of Directors (the "Board"). See "Risk Factors" and "Dividend
Policy."

OPERATING STRATEGIES

The Company pursues the following operating strategies which, in conjunction
with its capital management strategy, are intended to maximize return on
shareholders' equity:

Focus on Property Catastrophe Reinsurance. The Company concentrates on
writing property catastrophe reinsurance of risks located throughout the world.
For the years ended September 30, 1996 and 1995, the Company derived 86.5% and
88.4%, respectively, of its net premiums written from property catastrophe
reinsurance. The high level of severity and frequency of property catastrophe
losses from 1987 through 1992 precipitated a general increase in rates and
attachment points in this line of reinsurance. Although rates have declined
from their highs in 1993 and 1994, the Company believes that property
catastrophe reinsurance can still be significantly profitable for a reinsurer,
such as the Company, that has the financial strength, flexibility and
responsiveness needed to attract quality business and the high level of
technical underwriting judgment and skill necessary to price risks
appropriately.

Selectively Write Other Lines of Business. While property catastrophe
reinsurance is the Company's primary focus, the Company also seeks to take
advantage of pricing opportunities that may occur in other lines of
reinsurance. These lines generally are characterized by a relatively short
period between the collection of premium and the notification of loss. These
lines currently include property risk excess and pro rata treaty insurance,
which constituted 5.1% and 2.6% of the Company's net premiums written in the
years ended September 30, 1996 and 1995, respectively. The Company also writes
casualty clash, marine, crop hail, aviation and satellite reinsurance. For the
years ended September 30, 1996 and 1995, these coverages represented 6.5% and
6.0%, respectively, of the Company's net premiums written. The Company believes
that writing these types of reinsurance enhances the utilization of capital
because these lines generally do not create additional aggregate exposure for
the Company. In addition, the Company has formed LaSalle Re Capital to provide
capital support to selected Lloyd's of London ("Lloyd's") syndicates commencing
in January 1997. See "Business--Reinsurance Products."

Utilize a Disciplined Underwriting Approach. Underwriting decisions are made
following analysis of each reinsurance contract based on the expected
incremental return on equity in relation to the Company's overall portfolio of
reinsurance contracts. To assess its property catastrophe risks, the Company
uses a variety of underwriting techniques, including simulation models,
exposure ratings and experience ratings. The Company has developed its
proprietary L-CAM(TM) catastrophe analysis model to assess its risks in the
U.S. property catastrophe market. The Company controls and monitors its
aggregate exposures on a real-time basis using computer-based rating and
control systems. The Company is highly selective in accepting risks, extending
coverage on approximately 29% and 24% of the contract submissions it received
in the years ended September 30, 1996 and 1995, respectively. See "Business--
Underwriting."

6
<PAGE>

Maintain and Develop Long-Term Relationships with Clients and Brokers. The
Company seeks to maintain and develop long-term relationships with its clients
and brokers by providing a high level of service. The Company promptly responds
to underwriting submissions, designs customized programs, offers lead terms
when circumstances warrant and pays valid claims within an average of five
days. The Company retains a substantial portion of its clients from year to
year. Retention of clients permits the Company to use its experience regarding
a client's underwriting practices and risk management systems to underwrite its
own business with greater precision. In addition, the Company's relationships
with brokers permit it to obtain business and monitor developments in various
lines of reinsurance in order to increase its writings when market conditions
in those lines are favorable. See "Business--Marketing."

INDUSTRY TRENDS

The Company believes that an imbalance between the supply of and demand for
property catastrophe reinsurance existed in 1993 and resulted in an increase in
premiums from pre-1993 levels. As a result of the increased property
catastrophe reinsurance capacity since 1993, the Company believes that supply
and demand in the property catastrophe reinsurance market became more stable in
1994 and have remained relatively stable in succeeding years. Based on the
Company's marketing efforts, reinsurance contract submissions and publicly
available information, the Company believes that property catastrophe rates
generally remained at the substantially increased 1993 levels in 1994 and
decreased somewhat in 1995 from 1994 levels. On these same bases, the Company
believes that rates in 1996 have decreased from levels in 1995. In particular,
rates have declined significantly in areas, such as Japan and Europe, where
there has been favorable loss experience, while in the U.S. market, where the
level of property catastrophe losses has generally been higher than in
international markets in recent years, rates have decreased to a lesser degree.
Notwithstanding these rate decreases, the Company believes that current rates
substantially exceed 1992 levels. If and while favorable loss experience
continues and reinsurance capacity does not diminish, the Company expects
further downward pressure on rates during 1997. See "Risk Factors--Business
Considerations" and "Business--Industry Trends."

FORMATION

Aon Corporation (together with its affiliates, "Aon"), CNA, Corporate
Partners, L.P. (together with its related parties, "Corporate Partners") and
certain other investors (together, the "Founding Shareholders") formed LaSalle
Re in Bermuda in October 1993 to take advantage of the supply and demand
imbalance that they believed existed in the property catastrophe reinsurance
market. Affiliates of Aon and CNA provide certain underwriting, investment
management and administrative services to the Company pursuant to service
agreements. See "Certain Transactions." Holdings was incorporated in Bermuda in
September 1995 as a holding company in connection with the Company's
recapitalization and initial public offering. Holdings owns 100% of the
outstanding voting stock of LaSalle Re, which upon completion of the Offerings
will constitute approximately 73% of the outstanding capital stock of LaSalle
Re. Certain Founding Shareholders hold exchangeable non-voting shares of
LaSalle Re (the "Exchangeable Non-Voting Shares"), which shares are
exchangeable, at the option of the holder, for Common Shares of the Company on
a one-for-one basis, unless the Board determines such exchange may cause actual
or potential adverse tax consequences to the Company or any shareholder. See
"Description of Capital Stock--Capital Stock of LaSalle Re--Exchangeable Non-
Voting Shares." Upon completion of the Offerings, the Founding Shareholders
will own approximately 55% of the Common Shares and approximately 27% of the
capital stock of LaSalle Re (53% and 26% if the U.S. Underwriters' over-
allotment option is exercised in full). See "Principal and Selling
Shareholders."

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

The Company's principal executive offices are located at 25 Church Street,
Hamilton HM FX Bermuda, and its phone number is (441) 292-3339.

RISK FACTORS

Prospective investors in the Common Shares offered hereby should consider
carefully the matters set forth in "Risk Factors," as well as the other
information set forth in this Prospectus.

7
<PAGE>

THE OFFERINGS

<TABLE>
<S> <C>
Common Shares sold in the
Offerings:
U.S. Offering................... 2,520,000
International Offering.......... 630,000
Total(1)...................... 3,150,000
Common Shares to be Outstanding
after the Offerings(2)........... 22,727,010
Price Per Common Share............ $
Use of Proceeds................... The Company will not receive any of the
proceeds from the sale of the Common Shares
offered hereby. See "Use of Proceeds."
Dividends......................... In October 1996, the Company adopted a
dividend policy pursuant to which it
intends to distribute in each fiscal year
50% to 60% of the Company's net income from
the prior fiscal year, if any. In 1997, the
Company expects to distribute 50% of its
fiscal 1996 net income. The Company plans
to continue to pay dividends on a quarterly
basis in January, April, July and October
of each year. Based on the Company's net
income for the year ended September 30,
1996, the Company currently expects to pay
a quarterly dividend of $0.71 per share in
January 1997. The actual amount and timing
of any future dividends, including the
proposed quarterly dividend payable in
January 1997, is at the discretion of the
Board and is dependent upon the profits and
financial requirements of the Company and
other factors, including certain legal,
regulatory and other restrictions. See
"Dividend Policy."
Nasdaq National Market Symbol..... LSREF
</TABLE>
- --------

(1) Excludes up to 472,500 Common Shares that may be sold if the over-allotment
option granted by the Selling Shareholders to the U.S. Underwriters is
exercised. See "Underwriting."

(2) Includes 8,329,290 Exchangeable Non-Voting Shares that are held by certain
Founding Shareholders and are exchangeable, at the option of the holder,
for Common Shares on a one-for-one basis, unless the Board determines that
such exchange may cause actual or potential adverse tax consequences to the
Company or any shareholder. See "Description of Capital Stock--Capital
Stock of LaSalle Re--Exchangeable Non-Voting Shares" and "Certain Tax
Considerations." Excludes 2,840,220 Common Shares reserved for issuance
upon exercise of options issued in connection with the formation of LaSalle
Re, granted to certain executive officers and issuable in connection with
outstanding stock appreciation rights. See "Management--Employment
Agreements" and "--Long-Term Incentive Plan" and "Certain Transactions--
Formation and Recapitalization."

8
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The historical consolidated financial data presented below as of and for each
of the periods ended September 30, 1996, 1995 and 1994 were derived from the
Company's audited consolidated financial statements included elsewhere in this
Prospectus. The summary consolidated financial data should be read in
conjunction with the Company's Consolidated Financial Statements and related
notes appearing elsewhere in this Prospectus and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
PERIOD
YEAR ENDED SEPTEMBER 30, OCTOBER 26, 1993
-------------------------- TO SEPTEMBER 30,
1996 1995(1) 1994(1)
------------ ------------ ----------------
<S> <C> <C> <C>
STATEMENT OF INCOME DATA
Net premiums written.............. $ 190,151 $ 201,916 $ 133,327
Net premiums earned............... 195,141 170,370 76,989
Net investment income (net of
realized losses)................. 26,428 25,066 15,739
Loss and loss expenses incurred... 51,477 60,397 49,801
Underwriting expenses............. 27,268 22,988 8,686
Operating expenses(2)............. 13,373 7,603 4,342
Income before minority interest... 129,451 104,448 29,899
Minority interest(3).............. 47,966 38,774 10,958
Net income........................ 81,485 65,674 18,941
Net income per share(4)........... 5.40 4.51 1.31
Weighted average shares
outstanding(5)................... 23,967,870 23,170,680 22,852,910
Dividend per Common Share(6)...... $ 1.85 $ 4.62 $ --
OTHER DATA
Loss and loss expense ratio(7).... 26.4% 35.5% 64.7%
Expense ratio(7).................. 19.6% 17.1% 16.6%
Combined ratio(7)................. 46.0% 52.6% 81.3%
Return on average Combined
Equity(8)........................ 29.2% 26.6% 9.3%
Total statutory capital and
surplus(9)....................... $ 476,722 $ 390,683 $ 376,414
BALANCE SHEET DATA (AT END OF
PERIOD)
Total investments and cash........ $ 537,504 $ 522,425 $ 409,738
Reinsurance balances receivable... 70,625 86,146 50,307
Total assets...................... 634,374 636,547 481,424
Reserve for losses and loss
expenses......................... 49,875 66,654 37,789
Reserve for unearned premiums..... 82,894 87,885 56,338
Minority interest(3).............. 179,470 147,389 140,838
Total shareholders' equity........ 307,448 253,422 243,446
Book value per share(10).......... $ 21.42 $ 17.64 $ 16.91
</TABLE>
- --------
(1) In October 1995, LaSalle Re changed its fiscal year end from December 31 to
September 30, effective September 30, 1995. All prior periods have been
adjusted to reflect a fiscal year end of September 30.
(2) Includes operating expenses, corporate expenses, interest payable and
foreign exchange gains and losses. For a discussion of foreign exchange
gains and losses, see "Management's Discussion of Financial Condition and
Results of Operations."
(3) Minority interest represents those shares in LaSalle Re which are held as
Exchangeable Non-Voting Shares and currently constitute approximately 37%
of the capital stock of LaSalle Re. The Exchangeable Non-Voting Shares are
held by certain Founding Shareholders and are exchangeable, at the option
of the holder,

9
<PAGE>

for Common Shares of Holdings on a one-for-one basis, unless the Board
determines that such exchange may cause actual or potential adverse tax
consequences to the Company or any shareholder. See "Description of Capital
Stock--Capital Stock of LaSalle Re--Exchangeable Non-Voting Shares" and
"Certain Tax Considerations."
(4) Net income per share equals income before minority interest divided by
weighted average shares outstanding.

(5) Weighted average shares outstanding include Common Shares and Exchangeable
Non-Voting Shares as common stock equivalents and the dilutive effect of
stock options and stock appreciation rights using the treasury stock
method.
(6) Dividend per Common Share is based on outstanding Common Shares of
14,397,720 (1995: 14,397,720; 1994: 14,395,710).
(7) The loss and loss expense ratio is calculated by dividing the losses and
loss expenses incurred by net premiums earned. The expense ratio is
calculated by dividing underwriting expenses and certain operational
expenses by net premiums earned. The combined ratio is the sum of the loss
and loss expense ratio and the expense ratio.
(8) Return on average Combined Equity is calculated by dividing income before
minority interest by the average of the opening and closing sum of
shareholders' equity and minority interest. The adjustment in respect of
minority interest reflects the exchangeable nature of the Exchangeable
Non-Voting Shares. Closing shareholders' equity and minority interest
reflects any dividends declared or paid during such periods, with the
average not adjusted to reflect the timing of dividends declared or paid.
See "Dividend Policy."
(9) Total statutory capital and surplus of LaSalle Re is calculated in
accordance with the provisions of The Insurance Act 1978 of Bermuda,
amendments thereto and related regulations. See "Business--Regulation."
(10) Book value per share is calculated based on Combined Equity divided by
Common Shares and Exchangeable Non-Voting Shares of 22,727,010 (1995:
22,727,010; 1994: 22,725,000).

10
<PAGE>

RISK FACTORS

Prospective investors in the Common Shares offered hereby should consider
carefully the matters set forth below, as well as the other information set
forth in this Prospectus.

LIMITED OPERATING HISTORY

LaSalle Re commenced operations in November 1993 and has a limited operating
and claims history. The financial data included herein are not necessarily
indicative of the financial condition or results of operations of the Company
in the future. In addition, the Company's limited operating and claims history
may make it more difficult for the Company to assess the risks it underwrites
based on its own historical loss experience. See "Selected Consolidated
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business."

VOLATILITY OF FINANCIAL RESULTS; CAPITAL MANAGEMENT STRATEGY

The Company primarily underwrites property catastrophe reinsurance, which
covers unpredictable events such as hurricanes, windstorms, hailstorms,
earthquakes, fires, industrial explosions, freezes, riots, floods and other
man-made or natural disasters. Because the Company has large aggregate
exposures to man-made and natural disasters, the Company expects that its
claims experience will be characterized by relatively low frequency and high
severity. The occurrence of claims from catastrophic events is likely to
result in substantial volatility in the Company's financial results for any
fiscal quarter or year, and therefore, in the timing and amount of any
dividend paid. The Company endeavors to manage its exposures to catastrophic
events by limiting the amount of its exposure in each geographic zone
worldwide and requiring that its property catastrophe contracts provide for
aggregate limits and attachment points. Nonetheless, a single catastrophic
event could affect multiple geographic zones or the frequency or severity of
catastrophic events could exceed the Company's estimates. The occurrence of
these events could have a material adverse effect on the Company's financial
condition and results of operations and its ability to write new business and
to pay dividends. To date, the Company has not used retrocessions to manage
its exposures. Catastrophic events of significant magnitude historically have
been relatively infrequent, although the Company believes that the property
catastrophe reinsurance market has experienced a high level of worldwide
catastrophic losses in terms of both frequency and severity from 1987 to the
present as compared with prior years. The Company expects that increases in
the values and concentrations of insured property and the effects of inflation
will increase the severity of such occurrences per year in the future. See
"Business--Reinsurance Products."

Pursuant to its dividend policy, the Company intends to distribute in each
fiscal year 50% to 60% of the Company's net income from the prior fiscal year,
if any, on a quarterly basis. In 1997, the Company expects to distribute 50%
of its fiscal 1996 net income. The Company's credit facility currently
restricts dividends to a maximum of 50% of net income for the prior fiscal
year. In order to pay dividends in excess of 50% of net income, the Company
would have to renegotiate certain terms of its credit facility. The Company
also intends to repurchase up to $50 million of Common Shares in open market
or privately negotiated transactions from time to time depending on market
conditions and the Company's capital and liquidity requirements. The payment
of dividends and any share repurchases will result in the Company having less
capital available to sustain losses than would otherwise be the case. See
"Dividend Policy," "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" and
"Business--Capital Management Strategy."

RELIANCE ON AON AND CNA; TRANSACTIONS WITH AFFILIATES; CONFLICTS OF INTEREST

The Company's day-to-day operations are performed by affiliates of Aon and
CNA pursuant to service agreements with the Company (the "Service
Agreements"). The Service Agreements consist of: (i) an underwriting services
agreement (the "Underwriting Services Agreement") with CNA (Bermuda) Services
Ltd. ("CNA Bermuda") pursuant to which CNA Bermuda provides underwriting
services and underwrites all classes

11
<PAGE>

of insurance and reinsurance for LaSalle Re; (ii) an administrative services
agreement (the "Administrative Services Agreement") with Aon Risk Consultants
(Bermuda) Ltd. ("Aon Bermuda") pursuant to which Aon Bermuda provides LaSalle
Re with actuarial and financial reporting, accounting, office space and other
administrative services; (iii) an investment management agreement (the
"Investment Management Agreement") with Aon Advisors (UK) Limited ("Aon
Advisors") pursuant to which Aon Advisors provides LaSalle Re with investment
management services in accordance with the investment guidelines set by the
Board of Directors of LaSalle Re; and (iv) a claims agreement (the "Claims
Agreement") with Integrated Runoff Insurance Services Corporation ("IRISC"),
an affiliate of Aon, pursuant to which IRISC serves as claims administrator
for LaSalle Re. The Service Agreements terminate on December 31, 1998 with a
two-year extension at the option of the Company, other than the Claims
Agreement, which terminates on December 31, 1996. After the termination of the
Claims Agreement, Aon Bermuda will serve as claims administrator for LaSalle
Re under the Administrative Services Agreement. While a number of other
organizations offer the services provided to the Company by affiliates of Aon
and CNA, there can be no assurance that if any of the Service Agreements were
to terminate, the Company would be able to successfully perform such services
for itself or obtain such services from persons which are not affiliates of
CNA or Aon on substantially similar terms. In particular, the termination of
the Underwriting Services Agreement or the Administrative Services Agreement
could have a material adverse effect on the Company. See "Certain
Transactions."

In 1996 and 1995, CNA ceded to the Company a portion of its existing book of
property catastrophe reinsurance business. The terms of these cessions to the
Company were negotiated between the parties and the Company believes that they
are at market rates. This ceded business represented 12.7% and 14.3% of the
Company's net premiums written and 12.9% and 15.6% of net premiums earned in
1996 and 1995, respectively. Such cessions assisted the Company in
establishing a geographic diversification of exposures that might have been
difficult for a newly organized reinsurer to establish on its own. Excluding
the business ceded by CNA, for the year ended September 30, 1996, 48.1% of the
Company's net premiums written represented U.S.-based risks and the remaining
51.9% was spread in other territories around the world. Although the Company
expects the level of such cessions to continue to decrease, if CNA were to
suddenly cease ceding business to the Company, the geographical diversity of
the Company's portfolio of property catastrophe risks and the Company's
results of operations could be materially adversely affected. See "Certain
Transactions--Reinsurance Transactions with Aon and CNA."

The Service Agreements and other transactions between Aon or CNA and the
Company may give rise to potential conflicts of interest between Aon or CNA,
on the one hand, and the Company, on the other hand. However, as provided
under Bermuda law, directors who have an interest in any matter are permitted
under Holdings' bye-laws (the "Bye-Laws") and LaSalle Re's bye-laws to vote
with respect to such matters as long as they have disclosed their interest. A
director of Holdings or LaSalle Re who is directly or indirectly interested in
a proposed contract or other matter with such company must declare the nature
of such interest to the Board or the Board of Directors of LaSalle Re, as the
case may be. Each of the Service Agreements has been approved by a vote of the
Board of Directors of LaSalle Re at a meeting at which all directors present
who are affiliated with Aon or CNA recused themselves. CNA competes with the
Company for property catastrophe and other lines of reinsurance underwritten
by the Company. Aon, CNA and other Founding Shareholders have sponsored and
may in the future sponsor or otherwise participate in other insurance ventures
with other entities engaged in or intending to engage in insurance and
reinsurance underwriting, some of which compete and may in the future compete
with the Company. Conflicts of interest could also arise with respect to
business opportunities that could be advantageous to Aon, CNA or other
Founding Shareholders, on the one hand, and the Company, on the other hand.
Aon and CNA also have entered into agreements and maintain relationships with
numerous companies that may compete with the Company. No agreement or
understanding exists regarding the resolution of any of these potential
conflicts of interest.

DEPENDENCE ON MANAGEMENT

The Company's success depends on the efforts and abilities of its Chairman,
Chief Executive Officer and President, Victor H. Blake, its Executive Vice
President and Chief Underwriting Officer, Guy D. Hengesbaugh, and its Chief
Financial Officer and Treasurer, Andrew Cook. The Company has entered into
employment

12
<PAGE>

agreements with Mr. Blake and Mr. Cook. The Company receives the services of
Mr. Hengesbaugh pursuant to the terms of the Underwriting Services Agreement
and does not have an employment agreement with him. The Company does not
maintain key-man life insurance on any of its executive officers. See
"Management--Employment Agreements" and "Certain Transactions--Underwriting
Services Agreement."

Under Bermuda law, non-Bermudians (other than spouses of Bermudians) may not
engage in any gainful occupation in Bermuda without the specific permission of
the appropriate Bermuda government authority. Such permission, or a work
permit for a specific period of time, can be granted upon showing that, after
proper public advertisement, no Bermudian or spouse of a Bermudian is
available who meets the minimum standards for the advertised position. Of the
Company's executive officers, Victor H. Blake, Guy D. Hengesbaugh and Andrew
Cook are working under work permits. There can be no assurance that the work
permits of such executive officers will be extended or that, if such executive
officers were to leave the Company, work permits for new executive officers
would be granted.

BUSINESS CONSIDERATIONS

The Company believes that an imbalance between the supply of and demand for
property catastrophe reinsurance existed in 1993 and resulted in an increase
in premiums from pre-1993 levels. The Company believes that the numerous and
severe catastrophic events experienced worldwide from 1987 to 1992 resulted in
large losses for reinsurers and led to the withdrawal, in whole or in part, of
certain reinsurers from the property catastrophe market. At the same time,
increased scrutiny of catastrophe exposures and a general increase in insured
property values in catastrophe-exposed areas contributed to increased demand
for property catastrophe insurance and reinsurance. The Company believes that
the supply and demand imbalance led to the entry of approximately $4.3 billion
of capital in the Bermuda-based property catastrophe reinsurance market in
1992 and 1993. As a result of the increased property catastrophe reinsurance
capacity, the Company believes that supply and demand in the property
catastrophe reinsurance market became more stable in 1994 and have remained
relatively stable in succeeding years. Based on the Company's marketing
efforts, reinsurance contract submissions and publicly available information,
the Company believes that property catastrophe rates generally remained at the
substantially increased 1993 levels in 1994 and decreased somewhat in 1995
from 1994 levels. On these same bases, the Company believes that rates in 1996
have decreased from levels in 1995. In particular, rates have declined
significantly in areas, such as Japan and Europe, where there has been
favorable loss experience, while in the U.S. market, where the level of
property catastrophe losses has generally been higher than in international
markets in recent years, rates have decreased to a lesser degree.
Notwithstanding these rate decreases, the Company believes that current rates
substantially exceed 1992 levels. If and while favorable loss experience
continues and reinsurance capacity does not diminish, the Company expects
further downward pressure on rates during 1997. If rates decline, the Company
expects net premiums written from property catastrophe reinsurance to decline
in 1997. However, based on its current perception of market opportunities, the
Company expects that growth in its other lines of business would cause total
net premiums to remain relatively stable. There can be no assurance that the
present level of demand will continue, that the present level of supply of
reinsurance will not increase as a result of capital provided by recent or
future market entrants or by existing property catastrophe reinsurers or that
rates will not decline. See "Business--Industry Trends."

LOSS RESERVES

The Company establishes loss reserves for the ultimate settlement costs of
all loss and loss expenses incurred with respect to business written by it.
Loss reserves represent estimates derived from actuarial and statistical
projections of the Company's expectations of ultimate loss and loss expenses
for incurred losses at a given time. Under GAAP, the Company is not permitted
to establish loss reserves with respect to its property catastrophe
reinsurance until an event occurs that may give rise to a claim. As a result,
only loss reserves applicable to losses incurred up to the reporting date may
be set aside, with no allowance for the provision of a contingency reserve to
account for expected future losses. Reserve estimates by new property
catastrophe reinsurers, such as the Company, may be inherently less reliable
than the reserve estimates of reinsurers with stable volumes of business and
an established claims history. Although the Company's own historical loss
experience by itself may be inadequate for estimating reserves, the Company
utilizes loss data generally available through various trade associations and
draws on the experience of both Aon and CNA. See "--Reliance on Aon

13
<PAGE>

and CNA; Transactions with Affiliates; Conflicts of Interest." The Company
believes that its loss reserves to date have been adequate. In contrast to
casualty property losses, which frequently can be determined only through
lengthy, unpredictable litigation, non-casualty property losses tend to be
reported promptly and usually are settled within a shorter period.
Nevertheless, actual losses and loss expenses paid may deviate, perhaps
substantially, from the reserve estimates reflected in the Company's financial
statements. The Company's loss reserves are reviewed regularly by the
Company's actuaries and executive officers and the Board of Directors of
LaSalle Re, and as they develop upward or downward, the results are reflected
in the net income in the period in which the reserve deficiency or redundancy
is evaluated. If the Company's loss reserves are determined to be inadequate,
the Company will be required to increase loss reserves with a corresponding
reduction in the Company's net income in the period in which the deficiency is
identified. There can be no assurance that the final loss settlements will not
exceed the Company's loss reserve and have a material adverse effect on the
Company's financial condition and results of operations in a particular
period. See "Business--Underwriting" and "--Reserves."

COMPETITION; RATINGS; NON-ADMITTED STATUS

The property catastrophe reinsurance industry is highly competitive. The
Company competes, and will continue to compete, with major U.S. and non-U.S.
insurers and property catastrophe reinsurers, including other Bermuda-based
property catastrophe reinsurers and CNA, some of which have greater financial
and organizational resources than the Company. There may be established
companies or new companies of which the Company is not aware which may be
planning to enter the property catastrophe reinsurance market or existing
property catastrophe reinsurers which may be planning to raise additional
capital. In addition, Lloyd's began to allow capital from corporate investors
in 1994. Competition in the types of reinsurance that the Company underwrites
is based on many factors, including rates and other terms and conditions
offered, services provided, ratings assigned by independent rating agencies,
speed of claims payment, perceived financial strength of the reinsurer and
reputation and experience of the reinsurer in the line of reinsurance to be
written.

LaSalle Re currently is rated by A.M. Best Company, Inc. ("A.M. Best") and
Standard & Poor's Corporation ("S&P"). In April 1996, LaSalle Re received an
initial rating from A.M. Best of "A-" (Excellent). Prior to that time, LaSalle
Re was not rated by any rating agency. The rating received by LaSalle Re
represents the fourth highest in the rating scale used by A.M. Best. In
October 1996, LaSalle Re received an initial rating of its claims paying
ability from S&P of "A" (Good). The rating received by LaSalle Re represents
the sixth highest in the rating scale used by S&P. Such ratings are based on
factors of concern to cedents and brokers and are not directed toward the
protection of investors. Such ratings are neither a rating of securities nor a
recommendation to buy, hold or sell such securities. While the Company
believes that its new ratings will not be a major competitive advantage or
disadvantage, some of the Company's principal competitors have higher ratings
than the Company. Insurance ratings are one factor used by brokers and cedents
as a means of assessing the financial strength and quality of reinsurers. In
addition, a cedent's own rating may be adversely affected by the lack of a
rating of its reinsurer. Therefore, a cedent may elect to reinsure with a
competitor of the Company that has a higher insurance rating. Similarly, the
lowering or loss of a rating in the future could adversely affect the
Company's ability to compete.

The Company is not licensed or admitted as an insurer in any jurisdiction
other than Bermuda and has no plans to become so licensed or admitted. Because
jurisdictions in the United States do not permit cedents to take credit for
reinsurance obtained from unlicensed or non-admitted reinsurers on their
statutory financial statements unless security is posted, the Company's
reinsurance contracts with United States cedents generally require it to post
a letter of credit or provide other security for outstanding claims and/or
unearned premiums. In order to post these letters of credit, the Company
generally is required to provide the issuing banks with collateral equal to
such amounts. See "Business--Regulation." As a result of the size of the
Company's capitalization, the Company does not believe that its non-admitted
status in any jurisdiction has, or should have, a material adverse effect on
its ability to compete or obtain business in the property catastrophe
reinsurance market in which it operates, principally because many of the
Company's competitors are not admitted or licensed in United States
jurisdictions. However, there can be no assurance that increased competitive
pressure from current reinsurers and future market entrants or the Company's
non-admitted status will not adversely affect the Company. See "Business--
Competition."

14
<PAGE>

FOREIGN CURRENCY FLUCTUATIONS

The Company's financial statements are reported in U.S. dollars. The Company
writes a significant amount of business in currencies other than U.S. dollars
and is exposed to risks relating to fluctuations in foreign currency exchange
rates. These risks include exposure to changes in net cash inflows on non-U.S.
dollar denominated insurance premiums and exposure to reinsurance losses
denominated in non-U.S. currencies. The Company may from time to time
experience significant exchange gains or losses in currencies other than U.S.
dollars, which will affect the Company's consolidated statement of operations.

REGULATION

LaSalle Re is registered as an insurer and is subject to regulation and
supervision in Bermuda. The applicable Bermuda insurance statutes and
regulations generally are designed to protect insureds and ceding insurance
companies rather than shareholders. Among other things, such statutes and
regulations require LaSalle Re to maintain minimum levels of capital and
surplus, prescribe solvency margins that must be maintained and require
periodic examinations of LaSalle Re and its financial condition. These
provisions may, in effect, restrict the ability of LaSalle Re to write new
business or distribute funds to the Company, which, as a holding company, will
depend on such distributions as its principal source of funds. Other relevant
Bermuda statutes and regulations may also limit transfers of ownership of
LaSalle Re's capital stock and may impede the Company's ability to effect a
business combination involving a substantial change in the ownership or
control of LaSalle Re or the Company. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

LaSalle Re is not registered or licensed as an insurance company in any
jurisdiction other than Bermuda. For the year ended September 30, 1996, 41.7%
of the Company's net premiums written represented U.S.-based risks. The
insurance laws of each state of the United States do not directly regulate the
sale of reinsurance to insurance companies domiciled or licensed therein by
alien reinsurers, such as the Company. Nevertheless, the sale of reinsurance
by alien reinsurers, such as the Company, to insurance companies domiciled or
licensed in United States jurisdictions is indirectly regulated by state
"credit for reinsurance" laws that operate to deny financial statement credit
to ceding insurers unless the non-admitted alien reinsurer posts acceptable
security for ceded liabilities and agrees to certain contract provisions
(e.g., insolvency and intermediary clauses). Although the insurance laws of
United States jurisdictions generally exempt the business of reinsurance from
"doing business" laws, the Company conducts its business at its principal
offices in Bermuda and does not maintain an office in the United States, and
its personnel do not solicit, advertise, settle claims or conduct other
insurance activities in the United States. All policies are issued and
delivered and premiums are received outside the United States. The Company
does not believe that it is subject to the insurance laws of any state in the
United States. See "Business--Regulation." Nevertheless, there can be no
assurance that inquiries or challenges to the insurance activities of the
Company will not be raised in the future.

From time to time, there have been congressional and other initiatives in
the United States regarding the supervision and regulation of the insurance
industry, including proposals to supervise and regulate alien reinsurers.
While none of these proposals has been adopted to date on either the federal
or state level, there can be no assurance that federal or state legislation
will not be enacted subjecting the Company to supervision and regulation in
the United States, which could have a material adverse effect on the Company.
In addition, no assurance can be given that if the Company were to become
subject to any laws of the United States or any state thereof or of any other
country at any time in the future, it would be in compliance with such laws.

15
<PAGE>

Despite the importance of its policyholders domiciled in the United States,
the Company does not believe that conducting its business through its offices
in Bermuda and its inability to conduct any insurance operations in the United
States have materially affected its operations to date. However, no assurance
can be given that these factors will not materially affect its operations in
the future. See "Business--Underwriting," "--Marketing," and "--Regulation."

LaSalle Re Services maintains an office in London in order to introduce
prospective customers to the Company. LaSalle Re Services is not registered as
an insurer in England or in any other jurisdiction. Although the Company
believes that LaSalle Re Services is not required to be so registered and also
believes that the impact of other U.K. regulation on the Company's business is
minimal, no assurance can be given that U.K. regulation will not materially
affect its operations in the future.

HOLDING COMPANY STRUCTURE

Holdings is a holding company with no operations or significant assets other
than its ownership of a majority of the capital stock of LaSalle Re. Holdings
relies on cash dividends and other permitted payments from LaSalle Re to pay
expenses, to make principal and interest payments on outstanding indebtedness
of Holdings, if any, and to pay cash dividends to the holders of Common
Shares. The payment of dividends by LaSalle Re to Holdings is limited under
Bermuda law and regulations, including Bermuda insurance law. Under The
Insurance Act 1978 of Bermuda, amendments thereto and related regulations (the
"Insurance Act"), LaSalle Re is prohibited from paying dividends of more than
25% of its opening statutory capital and surplus unless it files an affidavit
stating that it will continue to meet the required solvency margin and minimum
liquidity ratio requirements and from declaring or paying any dividends
without the approval of the Minister of Finance if it failed to meet its
required margins in the previous fiscal year. The Insurance Act also requires
LaSalle Re to maintain a minimum solvency margin and minimum liquidity ratio
and prohibits dividends which would result in a breach of these requirements.
In addition, LaSalle Re is prohibited under the Insurance Act from reducing
its opening total statutory capital by more than 15% without the approval of
the Minister of Finance. See "Dividend Policy," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Business--Regulation."

TAX MATTERS

Holdings and LaSalle Re are Bermuda corporations. The Company believes that
neither Holdings nor LaSalle Re will be required to pay U.S. corporate income
tax (other than withholding tax on certain U.S. source income) because they
will continue to operate their business in a manner that will cause them to
not be engaged in the conduct of a trade or business within the U.S. However,
because there are no definitive standards provided by the Internal Revenue
Code of 1986, as amended (the "Code"), existing or proposed regulations
thereunder or judicial precedent, and as the determination is inherently
factual, there can be no assurance that the IRS could not successfully contend
that Holdings or LaSalle Re is engaged in such a trade or business. If the IRS
did so contend, Holdings and LaSalle Re would (unless exempted from tax by the
U.S.-Bermuda income tax treaty (the "Bermuda Treaty")) be subject to U.S.
corporate income tax on that portion of its net income treated as effectively
connected with a U.S. trade or business, as well as the U.S. branch profits
tax. Even if the IRS were to contend successfully that LaSalle Re was engaged
in a U.S. trade or business, if LaSalle Re were entitled to benefits under the
Bermuda Treaty, the Bermuda Treaty would preclude the U.S. from taxing LaSalle
Re on its business income except to the extent that such income were
attributable to a permanent establishment maintained by LaSalle Re in the U.S.
Although the Company believes that LaSalle Re does not have a permanent
establishment in the U.S., there can be no assurance that, in the event that
LaSalle Re were entitled to the Bermuda Treaty benefits, the IRS would not
successfully contend that LaSalle Re has such an establishment and therefore
is subject to taxation.

If Holdings were considered to be engaged in a U.S. trade or business and/or
if LaSalle Re were considered to be engaged in a U.S. trade or business
through a permanent establishment located therein (or if it were considered
not entitled to the benefits of the permanent establishment clause of the
Bermuda Treaty and LaSalle

16
<PAGE>

Re were considered to be engaged in the conduct of a U.S. trade or business)
and, thus, subject to U.S. income tax, the Company's results of operations and
cash flows could be materially adversely affected. LaSalle Re Capital may
become a corporate member of a Lloyd's syndicate. If it does become such a
member, it will be subject to a Closing Agreement between Lloyd's and the IRS
and will be treated as engaged in business in the U.S. and will become subject
to U.S. corporate income tax on its net income from U.S. sources. See "Certain
Tax Considerations--Taxation of the Company and its Subsidiaries--United
States."

Generally, the U.S. shareholders of the Company will not be subject to any
U.S. tax until they receive a distribution from the Company or dispose of
their Common Shares. However, special provisions of the Code may apply to U.S.
citizens, residents, domestic corporations, partnerships, estates or trusts,
who through their ownership of Common Shares, directly, indirectly or by
attribution, own 10% or more of the voting power of all classes of stock of
Holdings and/or LaSalle Re. Under those provisions, such a holder of Common
Shares may be required to include in its income its pro rata share of the
Company's subpart F income as earned, even if not distributed. All of the
Company's income is expected to be subpart F income. Such shareholders that
are taxed currently on their pro rata share of the Company's subpart F income
will not be taxed on dividends actually distributed by the Company that are
allocable to such income. The Company has attempted to avoid being considered
a "controlled foreign corporation" under the Code by requiring prior Board
approval for any transfer of Common Shares that results in any shareholder
(other than a mutual fund) beneficially owning Common Shares equaling 5.0% or
more of the voting power of Holdings or any shareholder holding Controlled
Shares (as defined herein) in excess of 9.9% of the voting power of Holdings.
Any such transfer without prior Board approval shall not be registered in the
share register of Holdings and shall be void and of no effect. See
"Description of Capital Stock--Capital Stock of Holdings--Common Shares."

Certain special subpart F provisions of the Code could apply to U.S. persons
who either directly or indirectly through their ownership of Common Shares own
shares of LaSalle Re if (A) 25% or more of the value or voting power of the
capital stock of LaSalle Re is owned directly, indirectly or by attribution by
U.S. persons that own such stock directly or indirectly through foreign
entities, as will be the case; and (B) (i) 20% or more of either the voting
power or the value of the capital stock of LaSalle Re is owned directly or
indirectly through entities by U.S. persons insured or reinsured by LaSalle Re
or by persons related to them and (ii) LaSalle Re has gross related person
insurance income ("RPII") equal to 20% or more of its gross insurance income.
Similar considerations will apply to U.S. persons who indirectly through their
ownership of Common Shares own shares of LaSalle Re Capital. RPII is income
(investment income and premium income) from the direct or indirect insurance
or reinsurance of (x) the risk of any U.S. person who owns Common Shares
(directly or indirectly through foreign entities) or (y) the risk of a person
related to such a U.S. person. The Company currently anticipates that less
than 20% of the gross insurance income of each of LaSalle Re and LaSalle Re
Capital for any taxable year will constitute RPII. However, there can be no
assurance that the IRS will not assert that 20% or more of LaSalle Re's or
LaSalle Re Capital's gross income is RPII or that a taxpayer will be able to
meet its burden of proving otherwise.

Generally, a U.S. shareholder will realize capital gain or loss on the sale
or exchange of Common Shares. However, upon a U.S. shareholder's sale or
exchange of Common Shares at a gain, the IRS could contend that an amount of
such gain equal to the allocable untaxed earnings and profits of the Company
or LaSalle Re will be taxed as a dividend. For individuals, this would mean
taxation of such amount at the rates applicable to ordinary income rather than
the lower rates applicable to long-term capital gain. See "Certain Tax
Considerations--Taxation of Shareholders--United States Taxation of U.S. and
Non-U.S. Shareholders."

LIMITATIONS ON TRANSFER AND OWNERSHIP

Under the Bye-Laws, any transfer of Common Shares that results in any
shareholder (other than a mutual fund) beneficially owning Common Shares
equaling 5.0% or more of the voting power of Holdings or any shareholder
holding Controlled Shares in excess of 9.9% of the voting power of Holdings,
in each case without the Board's prior approval, shall not be registered in
the share register of Holdings and shall be void and of no effect. In
addition, the Board has absolute discretion to decline to register a transfer
of Common Shares unless a registration statement under the Securities Act is
in effect with respect to such Common Shares or a written

17
<PAGE>

opinion from counsel acceptable to the Board is obtained to the effect that
such registration is not required. A shareholder will be permitted to dispose
of any Common Shares purchased which violate such restrictions and as to the
transfer of which registration is refused. The transferor of such Common
Shares will be deemed to own such Common Shares for dividend, voting and
reporting purposes until a transfer of such Common Shares has been registered
on the register of members of Holdings. See "Description of Capital Stock--
Capital Stock of Holdings--Common Shares."

ANTI-TAKEOVER CONSIDERATIONS

Certain provisions of the Bye-Laws have the effect of rendering more
difficult or discouraging unsolicited takeover bids from third parties. While
these provisions have the effect of encouraging persons seeking to acquire
control of the Company to negotiate with the Board, they could have the effect
of discouraging a prospective acquirer from making a tender offer or otherwise
attempting to attain control of the Company. Such provisions include providing
for "blank check" preferred stock and a classified Board of Directors and
providing that any transfer of Common Shares that results in any shareholder
(other than a mutual fund) beneficially owning Common Shares equaling 5.0% or
more of the voting power of Holdings or any shareholder holding Controlled
Shares in excess of 9.9% of the voting power of Holdings, in each case without
the Board's prior approval, shall not be registered in the share register of
Holdings and shall be void and of no effect. See "Description of Capital
Stock--Capital Stock of Holdings--Common Shares."

LIMITED PRIOR PUBLIC MARKET

The Common Shares have been quoted on the Nasdaq National Market only since
November 1995, when the Company's initial public offering occurred. The Common
Shares offered hereby have also been approved for quotation on the Nasdaq
National Market. The Company has been advised by Smith Barney Inc. that,
subject to applicable laws and regulations, Smith Barney Inc. currently
intends to continue making a market in the Common Shares following completion
of the Offerings. However, Smith Barney Inc. is not obligated to do so and any
market-making may be discontinued at any time without notice. There can be no
assurance that an active trading market for the Common Shares will develop or
continue upon completion of the Offerings or that the market price of the
Common Shares will not decline below the price to public set forth on the
cover page of this Prospectus.

CONTROL BY FOUNDING SHAREHOLDERS

Representatives of the Founding Shareholders, together with the Chairman,
Chief Executive Officer and President of Holdings, constitute all of the
members of the Board. See "Management--Directors and Executive Officers." Upon
completion of the Offerings, the Founding Shareholders will own approximately
55% of the Common Shares and approximately 27% of the capital stock of LaSalle
Re (53% and 26% if the U.S. Underwriters' over-allotment option is exercised
in full). As a result, if the Founding Shareholders were to act in concert,
they would be able to control most fundamental decisions affecting the
Company, including the election of directors and the merger or sale of the
Company. The Exchangeable Non-Voting Shares are exchangeable, at the option of
the holder, for Common Shares on a one-for-one basis, unless the Board
determines that such exchange may cause actual or potential adverse tax
consequences to the Company or any shareholder. See "Certain Transactions,"
"Principal and Selling Shareholders" and "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE

No prediction can be made as to the effect, if any, that future sales of
Common Shares, or the availability of Common Shares for future sale, will have
on the market price of the Common Shares prevailing from time to time. Sales
of substantial amounts of the Common Shares in the public markets following
the Offerings, or the perception that such sales could occur, could adversely
affect the market price of the Common Shares as well as the ability of the
Company to raise additional equity capital at a desirable time and price. The
Common Shares

18
<PAGE>

sold in the Offerings and 4,312,500 currently outstanding Common Shares will
be freely tradeable without restriction or further registration under the
Securities Act by persons other than "affiliates" of the Company within the
meaning of Rule 144 promulgated under the Securities Act. The remaining
outstanding Common Shares are "restricted" securities within the meaning of
Rule 144 and may not be resold in the absence of registration under the
Securities Act or pursuant to an exemption from registration. Pursuant to an
Amended and Restated Shareholders Agreement dated November 27, 1995 among
LaSalle Re, Holdings, certain Founding Shareholders and Mr. Blake (the
"Shareholders Agreement"), certain holders of Common Shares have been granted
certain rights to cause the Company to register under the Securities Act any
Common Shares held by them subject to certain conditions. The Company, each of
its officers and directors set forth under the heading "Management" in this
Prospectus and the Selling Shareholders have agreed that, for a period of 180
days after the date of this Prospectus, they will not, without the prior
written consent of Smith Barney Inc., sell, offer to sell, solicit an offer to
buy, contract to sell, grant any option or right to purchase or acquire, or
otherwise transfer or dispose of, any common shares of the Company or any of
its subsidiaries (or any securities convertible into or exercisable or
exchangeable for such common shares), except that (i) the Company may issue
Common Shares pursuant to stock purchase plans and grant options pursuant to
stock option plans and (ii) the Selling Shareholders may sell shares subject
to the U.S. Underwriters' over-allotment option and shares repurchased by the
Company pursuant to the Company's capital management strategy and may transfer
shares as bona fide gifts and pledge shares so long as the donees or the
pledgees, as the case may be, agree in writing with the Underwriters to be
bound by the terms of such agreement. See "Shares Eligible for Future Sale."

SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS

19
<PAGE>

USE OF PROCEEDS

The Company will not receive any of the proceeds from the sale of the Common
Shares offered hereby. The Company will pay certain expenses related to the
Offerings, including certain expenses incurred by the Selling Shareholders,
estimated to be $550,000.

PRICE RANGE OF COMMON SHARES

The Common Shares were initially offered to the public on November 20, 1995
at a price of $19.25 per share. The Common Shares are quoted on the Nasdaq
National Market under the symbol "LSREF." The following table sets forth, for
the periods indicated, the high and low sale prices for the Common Shares as
reported by the Nasdaq National Market. Such prices reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and do not
necessarily represent actual transactions.

<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Quarter ended December 31, 1995 (from November 20, 1995). $23.250 $19.500
Quarter ended March 31, 1996............................. 23.625 21.000
Quarter ended June 30, 1996.............................. 22.750 19.750
Quarter ended September 30, 1996......................... 25.500 21.000
Quarter ended December 31, 1996 (through October 30,
1996)................................................... 27.625 22.375
</TABLE>

On October 30, 1996, the last reported sale price of the Common Share as
reported by the Nasdaq National Market was $27.125 per share. As of October
30, 1996, there were 51 holders of record of the Common Shares.

20
<PAGE>

DIVIDEND POLICY

In October 1996, the Company adopted a dividend policy pursuant to which it
intends to distribute in each fiscal year 50% to 60% of the Company's net
income from the prior fiscal year, if any. In 1997, the Company expects to
distribute 50% of its fiscal 1996 net income. The Company plans to continue to
pay dividends on a quarterly basis in January, April, July and October of each
year. Based on the Company's net income for the year ended September 30, 1996,
the Company currently expects to pay a quarterly dividend of $0.71 per share
in January 1997.

The actual amount and timing of any future dividends, including the proposed
quarterly dividend payable in January 1997, is at the discretion of the Board
and is dependent upon the profits and financial requirements of the Company as
well as loss experience, business opportunities and any other factors that the
Board deems relevant. In addition, if the Company has funds available for
distribution, it may nevertheless determine that such funds should be retained
for the purposes of replenishing capital, expanding premium writings or other
purposes. Holdings is a holding company whose principal source of income is
cash dividends and other permitted payments from LaSalle Re. LaSalle Re's
ability to pay dividends to Holdings is subject to legal and regulatory
restrictions. In addition, in order for Holdings to pay dividends in excess of
50% of net income, the Company would have to renegotiate certain terms of its
credit facility. See "Risk Factors--Holding Company Structure," "--Volatility
of Financial Results; Capital Management Strategy," "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Business--Regulation." As a result of these factors,
there can be no assurance that the Company's dividend policy will not change
or that the Company will declare or pay any dividends.

In March, October and November 1995, LaSalle Re paid cash dividends on its
capital stock in the aggregate amounts of $30 million, $75 million and $25
million, respectively, which are reflected in the Company's Consolidated
Financial Statements. The payment of these dividends was part of the Company's
capital management strategy, which sought to maintain a level of capital
consistent with the risks and requirements of the business the Company
expected to write. In April, July and October 1996, the Company paid dividends
of $0.25, $0.25 and $0.25 per Common Share. The payment of these dividends was
in accordance with the Company's dividend policy as in effect prior to October
1996.

21
<PAGE>

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company at September 30, 1996, and as adjusted to give effect to the Offerings
assuming a price to public of $27.125. The table should be read in conjunction
with the Company's Consolidated Financial Statements and related notes
appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-------------------------
AS ADJUSTED FOR
ACTUAL THE OFFERINGS
-------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Minority interest(1)............................ $179,470 $134,596
Shareholders' equity
Share capital................................. 14,398 16,480
Additional paid-in capital.................... 221,968 254,076
Retained earnings............................. 72,943 83,896
Net unrealized loss on investments............ (1,861) (2,130)
-------- --------
Total shareholders' equity.................. 307,448 352,322
-------- --------
Total capitalization........................ $486,918 $486,918
======== ========
</TABLE>
- --------

(1) Minority interest represents those shares of LaSalle Re that are held as
Exchangeable Non-Voting Shares. These shares currently constitute
approximately 37% of the capital stock of LaSalle Re and upon completion
of the Offerings will constitute approximately 27% of the capital stock of
LaSalle Re (26% if the U.S. Underwriters' over-allotment option is
exercised in full). The Exchangeable Non-Voting Shares are held by certain
Founding Shareholders and are exchangeable, at the option of the holder,
for Common Shares of Holdings on a one-for-one basis, unless the Board
determines that such exchange may cause actual or potential adverse tax
consequences to the Company or any shareholder. See "Description of
Capital Stock--Capital Stock of LaSalle Re--Exchangeable Non-Voting
Shares" and "Certain Tax Considerations."

22
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

The historical consolidated financial data presented below as of and for
each of the periods ended September 30, 1996, 1995 and 1994 were derived from
the Company's audited consolidated financial statements included elsewhere in
this Prospectus. The selected consolidated financial data should be read in
conjunction with the Company's Consolidated Financial Statements and related
notes appearing elsewhere in this Prospectus and with "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
YEAR
ENDED SEPTEMBER 30, PERIOD OCTOBER 26,
------------------------ 1993 TO SEPTEMBER 30,
1996 1995(1) 1994(1)
----------- ----------- ---------------------
<S> <C> <C> <C>
STATEMENT OF INCOME DATA
Net premiums written........... $ 190,151 $ 201,916 $ 133,327
Net premiums earned............ 195,141 170,370 76,989
Net investment income (net of
realized losses).............. 26,428 25,066 15,739
Loss and loss expenses
incurred...................... 51,477 60,397 49,801
Underwriting expenses.......... 27,268 22,988 8,686
Operating expenses (2)......... 13,373 7,603 4,342
Income before minority
interest...................... 129,451 104,448 29,899
Minority interest (3).......... 47,966 38,774 10,958
Net income..................... 81,485 65,674 18,941
Net income per share (4)....... $ 5.40 $ 4.51 $ 1.31
Weighted average shares
outstanding (5)............... 23,967,870 23,170,680 22,852,910
Dividend per Common Share (6).. $ 1.85 $ 4.62 --
OTHER DATA
Loss and loss expense ratio
(7)........................... 26.4% 35.5% 64.7%
Expense ratio (7).............. 19.6% 17.1% 16.6%
Combined ratio (7)............. 46.0% 52.6% 81.3%
Return on average Combined
Equity (8).................... 29.2% 26.6% 9.3%
Total statutory capital and
surplus (9)................... $ 476,722 $ 390,683 $ 376,414
BALANCE SHEET DATA (AT END OF
PERIOD)
Total investments and cash..... $ 537,504 $ 522,425 $ 409,738
Reinsurance balances
receivable.................... 70,625 86,146 50,307
Total assets................... 634,374 636,547 481,424
Reserve for losses and loss
expenses...................... 49,875 66,654 37,789
Reserve for unearned premiums.. 82,894 87,885 56,338
Minority interest (3).......... 179,470 147,389 140,838
Total shareholders' equity..... 307,448 253,422 243,446
Book value per share (10)...... $ 21.42 $ 17.64 $ 16.91
</TABLE>
- --------
(1) In October 1995, LaSalle Re changed its fiscal year end from December 31
to September 30, effective September 30, 1995. All prior periods have been
adjusted to reflect a fiscal year end of September 30.
(2) Includes operating expenses, corporate expenses, interest payable and
foreign exchange gains and losses. For a discussion of foreign exchange
gains and losses see "Management's Discussion of Financial Condition and
Results of Operations."

(3) Minority interest represents those shares in LaSalle Re that are held as
Exchangeable Non-Voting Shares and currently constitute approximately 37%
of the capital stock of LaSalle Re. The Exchangeable Non-Voting Shares are
held by certain Founding Shareholders and are exchangeable, at the option
of the holder, for Common Shares of Holdings on a one-for-one basis,
unless the Board determines that such exchange may cause actual or
potential adverse tax consequences to the Company or any shareholder. See
"Description of Capital Stock--Capital Stock of LaSalle Re--Exchangeable
Non-Voting Shares" and "Certain Tax Considerations."

23
<PAGE>

(4) Net income per share equals income before minority interest divided by
weighted average shares outstanding.
(5) Weighted average shares outstanding include Common Shares and Exchangeable
Non-Voting Shares as common stock equivalents and the dilutive effect of
stock options and stock appreciation rights using the treasury stock
method.
(6) Dividend per Common Share is based on outstanding Common Shares of
14,397,720 (1995: 14,397,720; 1994: 14,395,710).
(7) The loss and loss expense ratio is calculated by dividing the losses and
loss expenses incurred by net premiums earned. The expense ratio is
calculated by dividing underwriting expenses and certain operational
expenses by net premiums earned. The combined ratio is the sum of the loss
and loss expense ratio and the expense ratio.
(8) Return on average Combined Equity is calculated by dividing income before
minority interest by the average of the opening and closing sum of
shareholders' equity and minority interest. The adjustment in respect of
minority interest reflects the exchangeable nature of the Exchangeable
Non-Voting Shares. Closing shareholders' equity and minority interest
reflects any dividends declared or paid during such periods, with the
average not adjusted to reflect the timing of dividends declared or paid.
See "Dividend Policy."
(9) Total statutory capital and surplus of LaSalle Re is calculated in
accordance with the provisions of the Insurance Act. See "Business--
Regulation."
(10) Book value per share is calculated based on Combined Equity divided by
Common Shares and Exchangeable Non-Voting Shares of 22,727,010 (1995:
22,727,010; 1994: 22,725,000).

24
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the Company's results of operations and
financial position. This discussion should be read in conjunction with the
Company's Consolidated Financial Statements and related notes appearing
elsewhere in this Prospectus.

OVERVIEW

LaSalle Re was incorporated under the laws of Bermuda in October 1993 and
commenced operations on November 22, 1993. LaSalle Re was initially
capitalized with $373.1 million provided through private sales of common
shares and special non-voting shares to the Founding Shareholders. Holdings
was incorporated in Bermuda in September 1995 as a holding company in
connection with the Company's recapitalization and initial public offering.
The Company owns 100% of the outstanding voting stock of LaSalle Re, which
upon completion of the Offerings will constitute approximately 73% of the
outstanding capital stock of LaSalle Re. Certain Founding Shareholders hold
Exchangeable Non-Voting Shares, which shares are exchangeable, at the option
of the holder, for Common Shares of the Company on a one-for-one basis, unless
the Board determines such exchange may cause actual or potential adverse tax
consequences to the Company or any shareholder. See "Description of Capital
Stock-Capital Stock of LaSalle Re--Exchangeable Non-Voting Shares."

If and while favorable loss experience continues and reinsurance capacity
does not diminish, the Company expects further downward pressure on rates for
property catastrophe reinsurance during 1997. If rates decline, the Company
expects net premiums written from property catastrophe reinsurance to decline
in 1997. However, based on its current perception of market opportunities, the
Company expects that growth in its other lines of business would cause total
net premiums written to remain relatively stable. See "Risk Factors--Business
Considerations."

Premiums written include new and renewal business, reinstatement premiums
and premium adjustments on current and prior year contracts. Renewal dates for
property catastrophe reinsurance contracts historically have been concentrated
in the January 1 to July 1 period. As a result, the Company's net premiums
written for the first six months of each calendar year generally represent a
significant portion of its net premiums written for the entire calendar year.

Premiums on property catastrophe excess of loss contracts are earned on a
pro rata basis over the period coverage is provided, which is generally 12
months. Under pro rata of property catastrophe contracts, the risks underlying
the contracts incept throughout the policy period and premiums generally are
earned over an 18-month period. As a result, the Company's net premiums earned
are not concentrated in any interim period.

Net realized gains and losses on the Company's investment portfolio are
disclosed separately from net investment income. In accordance with GAAP, the
Company has classified its investments as available for sale; therefore,
unrealized gains and losses on the Company's investment portfolio are not
recognized in the Company's consolidated results of operations but are
reflected as a separate component of shareholders' equity, net of minority
interest.

Losses and loss expenses incurred represent losses and loss expenses
reported by cedents and reserves established in respect of specific losses.
See "Business--Reserves."

Underwriting expenses are composed primarily of brokerage, ceding
commissions and excise taxes. Brokerage on property catastrophe excess of loss
contracts is 10% of ceded premiums. Pro rata of property catastrophe contracts
have varying rates of brokerage, ceding and profit commissions that are
individually negotiated based on the underlying risks of each contract and
generally are not dependent on geographic factors. These commissions range
from 0% to 45% of ceded premiums and averaged 9.8% of net premiums written for
the year ended September 30, 1996. United States federal excise tax on
premiums paid by United States domiciled cedents is 1% of ceded premiums. In
addition, underwriting expenses include underwriting services fees and,
depending upon the Company's financial performance, underwriting profit
commissions payable to CNA Bermuda pursuant to the Underwriting Services
Agreement. Until December 31, 1995, LaSalle Re paid CNA Bermuda underwriting
fees equal to 2% for the first $150 million of gross written and collected
premiums per fiscal year and 1.5% thereafter and, for periods during which the
Company's loss ratio since inception of LaSalle Re was 57% or less, subject to
certain conditions, an underwriting profit commission of 2.5% of the aggregate
net underwriting profits of LaSalle Re. Effective January 1, 1996, these fees
equalled 1.5% of gross

25
<PAGE>

written and collected premiums per fiscal year and, subject to the same loss
ratio test and conditions, an underwriting profit commission of 4.0% of the
aggregate net underwriting profits of LaSalle Re. LaSalle Re accrued
underwriting service fees to CNA Bermuda of $3.1 million, $3.5 million and
$1.5 million for the years ended September 30, 1996, 1995 and the period from
October 26, 1993 to September 30, 1994, respectively. In addition, the Company
incurred $4.1 million, $2.2 million and $nil in respect of profit commissions
to CNA Bermuda for the years ended September 30, 1996, 1995 and the period
from October 26, 1993 to September 30, 1994, respectively. All underwriting
expenses are charged to income on the same basis as the premiums to which they
relate are earned. The primary component of operating expenses is fees paid to
Aon Bermuda pursuant to the Administrative Services Agreement with the
Company. See "Certain Transactions--Underwriting Services Agreement" and "--
Administrative Services Agreement."

The Company's loss and loss expense ratio is calculated by dividing the
losses and loss expenses incurred by net premiums earned. The expense ratio is
calculated by dividing underwriting expenses and operational expenses by net
premiums earned. The combined ratio is the sum of the loss and loss expense
ratio and the expense ratio. The loss and loss expense ratios and the combined
ratios fluctuate based on losses and loss expenses incurred, which are not
within the control of the Company. The underwriting expense component of the
expense ratio fluctuates in proportion to earned premiums and profitability of
the Company, while the operational expenses component consists primarily of
amounts payable to Aon Bermuda pursuant to the Administrative Services
Agreement and executive compensation. See "Certain Transactions--
Administrative Services Agreement."

The Company's financial statements are reported in U.S. dollars. The Company
writes a significant amount of business in currencies other than U.S. dollars
and therefore is exposed to risks relating to fluctuations in foreign currency
exchange rates. These risks include exposure to changes in net cash inflows on
non-U.S. dollar denominated insurance premiums and exposure to reinsurance
losses denominated in non-U.S. currencies. The Company may from time to time
experience significant exchange gains or losses as a result of fluctuations in
foreign currency exchange rates, which will affect the Company's statement of
operations. In an effort to manage its exposure to foreign currency exchange
rate fluctuations, the Company from time to time enters into foreign exchange
contracts. See "Business--Investments--Foreign Currency Exposures."

RESULTS OF OPERATIONS

Year Ended September 30, 1996 Compared with Year Ended September 30, 1995

Net premiums written decreased 5.8% to $190.2 million for the year ended
September 30, 1996 from $201.9 million for the year ended September 30, 1995,
as a result of a reduction in United States property catastrophe excess of
loss premiums and adjustments on current and prior years' premium estimates.
The overall decrease was mitigated by a 26.4% increase in premiums written in
other lines of business to $22.1 million for the year ended September 30, 1996
from $17.4 million for the year ended September 30, 1995. Of the net premiums
written for the years ended September 30, 1996 and 1995, $164.6 million and
$178.5 million, respectively, were attributable to property catastrophe excess
of loss and pro rata of property catastrophe reinsurance. The total number of
contracts bound by the Company increased from 893 for the year ended September
30, 1995 to 995 for the year ended September 30, 1996. Reinstatement premiums
for the year ended September 30, 1996 totaled $5.5 million and related to a
variety of worldwide events. In the year ended September 30, 1995,
reinstatement premiums were $5.9 million, of which approximately 50% related
to hurricanes Luis and Marilyn.

Net premiums earned increased 14.5% to $195.1 million for the year ended
September 30, 1996 from $170.4 million for the year ended September 30, 1995.
The magnitude of this increase was primarily due to the overall increase in
premiums written in the third and fourth quarters of fiscal 1995 compared with
fiscal 1994, which had a subsequent impact on net premiums earned in fiscal
1996 and fiscal 1995, respectively.

Net investment income increased 6.8% to $26.8 million for the year ended
September 30, 1996 from $25.1 million for the year ended September 30, 1995.
This increase was primarily attributable to a larger average

26
<PAGE>

investment base in the year ended September 30, 1996 compared to the year
ended September 30, 1995. Investment income as a percentage of the average
market value of invested assets was 5.44% for the year ended September 30,
1996 compared to 5.38% for the year ended September 30, 1995.

Net realized losses on investments were $0.5 million during the year ended
September 30, 1996 compared to net realized losses of $25,000 during the year
ended September 30, 1995. In accordance with GAAP for investments classified
as available for sale, unrealized gains and losses on the Company's investment
portfolio are not recognized in the Company's consolidated results of
operations but are reflected as a separate component of shareholders' equity,
net of minority interest.

The following table sets forth the Company's combined ratios for the years
ended September 30, 1996 and 1995:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------
1996 1995
------------ ------------
<S> <C> <C> <C> <C>
Loss and loss expense ratio.................. 26.4% 35.5%
Expense ratio................................ 19.6 17.1
------------ ------------
Combined ratio............................... 46.0% 52.6%
============ ============
</TABLE>

Losses and loss expenses incurred decreased 14.8% to $51.5 million for the
year ended September 30, 1996 from $60.4 million for the year ended September
30, 1995. The Company has not been affected by any significant catastrophic
events in the year ended September 30, 1996; however, additional reserves of
$14.2 million were established for hurricanes Luis and Marilyn, which occurred
in September 1995. Other losses emanate from the 1996 hurricane season and the
end of the 1995 hurricane season, winter/spring storms in the United States,
the United Kingdom and Northern Europe and satellite losses from the in-orbit
portion of coverages. Losses and loss expenses incurred in the year ended
September 30, 1995 included $27.3 million in respect of hurricanes Luis and
Marilyn, with the balance of the losses and loss expenses relating to a
variety of worldwide incidents.

Underwriting expenses increased 18.6% to $27.3 million for the year ended
September 30, 1996 from $23.0 million for the year ended September 30, 1995,
primarily attributable to the growth in net premiums earned. As a percentage
of net premiums earned, underwriting expenses increased from 13.5% for the
year ended September 30, 1995 to 14.0% for the year ended September 30, 1996.
This increase was attributable to an increase in the level of fees accrued
pursuant to the Underwriting Services Agreement, which as a percentage of net
premiums earned were 3.7% for the year ended September 30, 1996 and 3.3% for
the year ended September 30, 1995. The Company's brokerage, ceding and profit
commissions were comparable for the years ended September 30, 1996 and 1995 at
10.3% and 10.2%, respectively. See "Certain Transactions--Underwriting
Services Agreement."

Operational expenses increased 78.7% to $11.1 million for the year ended
September 30, 1996 from $6.2 million for the year ended September 30, 1995.
This increase was primarily due to increased staff at the executive level and
increased fees under the Administrative Services Agreement. See "Certain
Transactions-- Administrative Services Agreement."

Interest expense was $0.2 million during the year ended September 30, 1996
compared with no expense in the year ended September 30, 1995. Interest
expense in the year ended September 30, 1996 related to agency fees and
ongoing commitment fees payable on the Company's credit facility. As at
September 30, 1996, there were no borrowings under this credit facility.

Foreign exchange losses in the year ended September 30, 1996 were $1.1
million compared to $0.2 million in the year ended September 30, 1995. The
losses in the year ended September 30, 1996 were due to the weak performance
of the United States dollar against the Yen in conjunction with a
strengthening of Sterling in excess of the average foreign exchange contract
rates. In the year ended September 30, 1995, the Company experienced foreign
currency losses, principally as a result of the weakening of Sterling against
the United States dollar.

Income before minority interest increased 23.9% to $129.5 million for the
year ended September 30, 1996 from $104.4 million for the year ended September
30, 1995. This increase was primarily due to an increase in net premiums
earned and a decrease in losses and loss expenses incurred.

27
<PAGE>

The Company's net income per share increased to $5.40 for the year ended
September 30, 1996 from $4.51 for the year ended September 30, 1995.

Year Ended September 30, 1995 and Period from October 26, 1993 through
September 30, 1994

LaSalle Re was incorporated in October 1993 and commenced operations on
November 22, 1993.

Net premiums written increased 51.4% to $201.9 million for the year ended
September 30, 1995 from $133.3 million for the 1994 period, primarily due to
increased writings of property catastrophe reinsurance. Of the net premiums
written for the 1995 year, $178.5 million was attributable to property
catastrophe excess of loss and pro rata property catastrophe reinsurance. The
total number of contracts bound by the Company increased from 508 for the 1994
period to 893 for the year ended September 30, 1995. Reinstatement premiums
were $5.9 million in the year ended September 30, 1995 and $8.2 million in the
1994 period. Approximately 50% of the reinstatement premiums recorded in 1995
related to hurricanes Luis and Marilyn. Primarily all of the 1994
reinstatement premiums were attributable to the Northridge, California
earthquake.

Net premiums earned increased 121.3% to $170.4 million for the year ended
September 30, 1995 from $77.0 million for the 1994 period. This increase was
primarily a result of the greater volume of premiums written in the year ended
September 30, 1995 together with the earnings of premiums written in the 1994
period that were unearned at September 30, 1994.

Net investment income increased 59.2% to $25.1 million for the year ended
September 30, 1995 from $15.8 million for the 1994 period. This increase was
primarily attributable to a larger investment base and an increase in yields,
particularly in the second quarter of the year ended September 30, 1995.
Investment income as a percentage of the average market value of investments
and cash was 5.4% and 4.7% for the year ended September 30, 1995 and the 1994
period, respectively.

The following table sets forth the Company's combined ratios for the year
ended September 30, 1995 and the period from October 26, 1993 through
September 30, 1994:

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
------------- -------------
<S> <C> <C>
Loss and loss expense ratio................... 35.5% 64.7%
Expense ratio................................. 17.1 16.6
---- ----
Combined ratio................................ 52.6% 81.3%
==== ====
</TABLE>

Losses and loss expenses incurred increased 21.3% to $60.4 million for the
year ended September 30, 1995 from $49.8 million for the 1994 period. The main
component of losses and loss expenses incurred in the year ended September 30,
1995 were losses of $27.3 million related to hurricanes Luis and Marilyn,
which occurred in September 1995. The balance of the losses and loss expenses
related to a variety of worldwide incidents, including property risk excess
losses of $7.9 million, development of the Northridge, California earthquake
of $5.8 million and summer flooding in Norway of $4.4 million. In 1994, the
Northridge, California earthquake resulted in losses of $42.3 million,
representing approximately 85% of total losses incurred in the 1994 period.

Underwriting expenses increased 164.7% from $8.7 million for the 1994 period
to $23.0 million for the year ended September 30, 1995, primarily due to the
growth in net premiums earned. As a percentage of net premiums earned,
underwriting expenses were 13.5% for the year ended September 30, 1995 and
11.3% for the 1994 period. This increase was primarily due to the accrual of a
$2.1 million underwriting profit commission incurred pursuant to the
Underwriting Services Agreement. No underwriting profit commission was accrued
in respect of the 1994 period because the conditions for earning such
commission were not satisfied. See "Certain Transactions--Underwriting
Services Agreement."

Operational expenses increased 52.9% to $6.2 million for the year ended
September 30, 1995 from $4.1 million for the 1994 period. This increase was
primarily due to increased fees of $1.7 million under the Administrative
Services Agreement. See "Certain Transactions--Administrative Services
Agreement."

28
<PAGE>

As a result of a relatively stable U.S. dollar and the placement of foreign
currency contracts, the Company experienced a foreign exchange loss of $0.2
million for the year end September 30, 1995 compared with a $1.6 million gain
for the 1994 period. Due to the Kobe, Japan earthquake and the potential for
loss payments in Yen, the Company did not place foreign currency contracts for
Yen balances during the year ended September 30, 1995 and sustained a loss on
this currency of $0.4 million.

Income before minority interest increased 249.3% to $104.4 million for the
year ended September 30, 1995 from the 1994 period. This increase was due
primarily to increases in net premiums earned and net investment income.

The Company's net income per share increased to $4.51 for the year ended
September 30, 1995 from $1.31 for the 1994 period.

LIQUIDITY AND CAPITAL RESOURCES

As a holding company, Holdings' assets consist primarily of the outstanding
voting stock of LaSalle Re and its cash flows depend primarily on dividends
and other permitted payments from LaSalle Re.

LaSalle Re's sources of funds consist of net premiums written, investment
income and proceeds from sales and redemptions of investments. Cash is used
primarily to pay losses and loss expenses, brokerage commissions, excise
taxes, administrative expenses and dividends. Under the Insurance Act, LaSalle
Re is prohibited from paying dividends of more than 25% of its opening
statutory capital and surplus unless it files an affidavit stating that it
will continue to meet the required solvency margin and minimum liquidity ratio
requirements and from declaring or paying any dividends without the approval
of the Minister of Finance if it failed to meet its required margins in the
previous fiscal year. The Insurance Act also requires LaSalle Re to maintain a
minimum solvency margin and minimum liquidity ratio and prohibits dividends
which would result in a breach of these requirements. In addition, LaSalle Re
is prohibited under the Insurance Act from reducing its total opening
statutory capital by more than 15% without the approval of the Minister of
Finance. See "Business--Regulation." LaSalle Re currently meets these
requirements. In addition, the payment of dividends by LaSalle Re is subject
to the rights of holders of the Exchangeable Non-Voting Shares to receive a
pro rata share of any dividend and to its need to maintain shareholders'
equity adequate to support the level of LaSalle Re's insurance operations.

Operating activities provided net cash of $131.4 million for the year ended
September 30, 1996 and $130.2 million for year ended September 30, 1995. Cash
flows from operations in future years may differ substantially from net
income. Cash flows are affected by loss payments, which, due to the nature of
the reinsurance coverage provided by LaSalle Re, are generally expected to
comprise large loss payments on a limited number of claims and can therefore
fluctuate significantly from year to year. The irregular timing of these large
loss payments can create significant variations in cash flows from operations
between periods. LaSalle Re funds such payments from cash flows from
operations and sales of investments.

As a result of the potential for large loss payments, LaSalle Re maintains a
substantial portion of its assets in cash and marketable securities. As of
September 30, 1996, 84.7% of its total assets were held in cash and marketable
securities. To further mitigate the uncertainty surrounding the amount and
timing of potential liabilities and to minimize interest rate risk, LaSalle Re
maintains a short average duration for its investment portfolio. The modified
average duration of the portfolio was 2.57 years at September 30, 1996. At
September 30, 1996, the fair value of the Company's total investment
portfolio, including cash, was $537.5 million.

The Company has adopted the Statement of Financial Accounting Standard 115
("SFAS 115") to account for its marketable securities. In accordance with SFAS
115, all of the Company's investments are classified as "available for sale."
Under this classification, investments are recorded at fair market value and
any unrealized gains or losses are reported as a separate component of
shareholders' equity. The unrealized loss on the investment portfolio net of
amounts attributable to minority interest was $1.9 million at September 30,
1996 compared to $1.0 million at September 30, 1995.

As of September 30, 1996, all of the securities held in the Company's
investment portfolio were fixed-income securities rated "A" or better by S&P
or Moody's Investors Services Inc. ("Moody's"). No single

29
<PAGE>

investment comprised more than 5% of the overall portfolio. See "Business--
Investments" and Notes 3 and 8 to Consolidated Financial Statements for
additional information regarding the Company's investment portfolio.

In March, October and November 1995, LaSalle Re paid cash dividends on its
capital stock in the aggregate amounts of $30 million, $75 million and $25
million, respectively. In April, July and October 1996, the Company paid
dividends of $0.25, $0.25 and $0.25 per Common Share, respectively, to holders
of its capital stock. In October 1996, the Company adopted a dividend policy
pursuant to which it intends to distribute in each fiscal year 50% to 60% of
the Company's net income from the prior fiscal year, if any, on a quarterly
basis. In 1997, the Company expects to distribute 50% of its fiscal 1996 net
income. Based on the Company's net income for the year ended September 30,
1996, the Company currently expects to declare a quarterly dividend of $0.71
per share payable in January 1997. The actual amount and timing of any future
dividends, including the proposed quarterly dividend payable in January 1997,
is at the discretion of the Board and is dependent upon the profits and
financial requirements of the Company and other factors, including certain
legal, regulatory and other restrictions. There can be no assurance that the
Company's dividend policy will not change or that the Company will declare or
pay any dividends. See "Dividend Policy."

As part of its capital management strategy, the Company currently intends to
repurchase up to $50 million of Common Shares in open market or privately
negotiated transactions from time to time depending on market conditions and
the Company's capital and liquidity requirements. The Company expects that any
share repurchases will be funded by available cash.

In accordance with the terms of certain reinsurance contracts, the Company
has posted letters of credit in the amount of $15.5 million as of September
30, 1996 as compared to $15.7 million as of September 30, 1995. These letters
of credit support outstanding loss reserves and are secured by a lien on the
Company's investment portfolio equal to 115% of the amount of the outstanding
letters of credit.

The Company made loss payments of $68.3 million during the year ended
September 30, 1996 as compared to $31.5 million for the year ended September
30, 1995. The majority of the payments made in the year ended September 30,
1995 related to the Northridge, California earthquake, which increased as
cedent paid losses exceeded Company attachment points and loss payments were
required. As of September 30, 1996, the Company paid a total of $37.6 million,
or 78.3%, of total incurred losses of $48.0 million relating to the
Northridge, California earthquake (as compared to $29.0 million, or 60.4%, of
such total incurred losses as of September 30, 1995). The majority of loss
payments in 1996 related to hurricanes Luis and Marilyn, for which the Company
paid a total of $33.8 million, or 81.4%, of total incurred losses of $41.2
million (as compared to $0.6 million, or 1.5%, of such total incurred losses
as of September 30, 1995).

At September 30, 1996, reserves for unpaid losses and loss expenses were
$49.9 million. The Company has no material commitments for capital
expenditures.

The Company has in place a $100 million committed line of credit from a
syndicate of banks. The proceeds from the credit facility may only be used to
buy preferred shares of LaSalle Re, which in turn may use the proceeds of such
purchase to meet current cash requirements. The facility matures December 1,
2000, and is secured by a pledge ("legal mortgage") of all the capital stock
of LaSalle Re held by the Company, including any preferred shares that may be
issued by LaSalle Re to the Company. The line of credit contains various
covenants, including: limitations on incurring additional indebtedness;
prohibitions of dividend and other restricted payments that would cause the
Company's tangible net worth (total shareholders' equity and minority
interest) to fall below $350 million for calendar year 1996, $375 million for
calendar years 1997 and 1998, and $400 million thereafter; restriction of
dividends per fiscal quarter to 12.5% of consolidated net income of the
Company for the immediately preceding fiscal year; restrictions on the sale or
lease of assets not in the ordinary course of business; maintenance of a ratio
of consolidated total debt to consolidated tangible net worth of no more than
0.40 to 1.00; maintenance of tangible net worth at the end of each fiscal year
of the greater of $250 million or 70% of net premiums written; maintenance of
statutory capital of LaSalle Re at the end of each fiscal year of at least
$250 million; and maintenance of a ratio of net premiums written to statutory
capital at the end of any fiscal quarter for the four fiscal quarters then
ended of no more than 1.00 to 1.00 in each case. In order

30
<PAGE>

for Holdings to pay dividends in excess of 50% of net income, the Company
would have to renegotiate certain terms of its credit facility. See "Risk
Factors--Volatility of Financial Results; Capital Management Strategy." As of
September 30, 1996, the credit facility had not been utilized.

The Company's financial condition and results of operations are influenced
by both internal and external forces. Loss payments, investment returns and
premiums may be impacted by changing rates of inflation and other economic
conditions. Cash flows from operations and the liquidity of its investment
portfolio are, in the Company's opinion, adequate to meet the Company's
expected cash requirements over the next 12 months.

INFLATION

The Company believes that inflation has not had a significant effect on
operations to date. Nonetheless, inflation does increase the value of insured
property, which may increase losses and loss expenses incurred by the Company,
and also affects investment returns.

31
<PAGE>

BUSINESS

OVERVIEW

The Company writes high severity, low frequency reinsurance on a worldwide
basis through its subsidiary, LaSalle Re. The Company primarily writes
property catastrophe reinsurance and also writes selected other lines of
reinsurance when it believes that market conditions are favorable. These lines
currently include property risk excess, property pro rata treaty, casualty
clash, marine, crop hail, aviation and satellite. The Company believes that
these other lines will constitute a growing portion of the Company's total
portfolio of reinsurance business, helping to moderate the volatility of its
property catastrophe reinsurance business.

The Company has been successful in attaining a selective and geographically
diverse portfolio of property catastrophe reinsurance risks. In the year ended
September 30, 1996, 41.7% of the Company's net premiums written represented
U.S.-based risks, 11.6% represented continental Europe-based risks, 8.6%
represented U.K.-based risks and 36.2% represented risks located in a variety
of other geographic zones elsewhere in the world. As a result of long-term
relationships between the Company's management and certain clients and
brokers, the Company has developed a strong base of regional business in the
U.S. This business assists the Company in diversifying its U.S.-based risks
and makes more efficient use of its capital by limiting multi-zone exposures.
In the year ended September 30, 1996, this regional business represented a
significant component of the Company's U.S.-based net premiums written.

At September 30, 1996, the Company had Combined Equity of $486.9 million
compared to $400.8 million at September 30, 1995. It achieved annualized
returns on average Combined Equity of 29.2% and 26.6%, respectively, and
combined ratios of 46.0% and 52.6%, respectively, for the years ended
September 30, 1996 and 1995. In addition, its loss and loss expense ratios
were 26.4% and 35.5% for the same periods. The Company wrote net premiums of
$190.2 million and $201.9 million, respectively, for the years ended September
30, 1996 and 1995. There can be no assurance that the Company will achieve
similar results in the future.

CAPITAL MANAGEMENT STRATEGY

The Company has adopted a capital management strategy focused on balancing
capital levels with aggregate exposures while seeking to achieve average
annualized returns on shareholders' equity of 20% to 25% over time. Consistent
with this strategy, in October 1996, the Company adopted a dividend policy
pursuant to which it intends to distribute in each fiscal year 50% to 60% of
the Company's net income from the prior fiscal year, if any, on a quarterly
basis. In 1997, the Company expects to distribute 50% of its fiscal 1996 net
income. Based on the Company's net income for the year ended September 30,
1996, the Company currently expects to pay a quarterly dividend of $0.71 per
share in January 1997. See "Dividend Policy." In support of its dividend
policy and to protect its capital base, the Company currently is negotiating
the purchase of non-traditional, multi-year reinsurance protection to reduce
earnings volatility resulting from one or more severe catastrophic events over
a period of years. There can be no assurance that the Company will be able to
obtain such reinsurance on terms acceptable to it.

The Company believes that its capital management strategy is attractive to
investors, while its level of capital and surplus offers financial security to
cedents and demonstrates to brokers and clients a commitment to property
catastrophe reinsurance. The Company's ability to implement its capital
management strategy in the future will depend on various factors, some of
which are beyond its control, and is subject to change at the discretion of
the Board. See "Risk Factors" and "Dividend Policy."

32
<PAGE>

OPERATING STRATEGIES

The Company pursues the following operating strategies which, in conjunction
with its capital management strategy, are intended to maximize return on
shareholders' equity:

Focus on Property Catastrophe Reinsurance. The Company concentrates on
writing property catastrophe reinsurance of risks located throughout the
world. For the years ended September 30, 1996 and 1995, the Company derived
86.5% and 88.4%, respectively, of its net premiums written from property
catastrophe reinsurance. The high level of severity and frequency of property
catastrophe losses from 1987 through 1992 precipitated a general increase in
rates and attachment points in this line of reinsurance. Although rates have
declined from their highs in 1993 and 1994, the Company believes that property
catastrophe reinsurance can still be significantly profitable for a reinsurer,
such as the Company, that has the financial strength, flexibility and
responsiveness needed to attract quality business and the high level of
technical underwriting judgment and skill necessary to price risks
appropriately.

Selectively Write Other Lines of Business. While property catastrophe
reinsurance is the Company's primary focus, the Company also seeks to take
advantage of pricing opportunities that may occur in other lines of
reinsurance. These lines generally are characterized by a relatively short
period between the collection of premium and the notification of loss. These
lines currently include property risk excess and pro rata treaty insurance,
which constituted 5.1% and 2.6% of the Company's net premiums written in the
years ended September 30, 1996 and 1995, respectively. The Company also writes
casualty clash, marine, crop hail, aviation and satellite reinsurance. For the
years ended September 30, 1996 and 1995, these coverages represented 6.5% and
6.0%, respectively, of the Company's net premiums written. The Company
believes that writing these types of reinsurance enhances the utilization of
capital because these lines generally do not create additional aggregate
exposure for the Company. In addition, the Company has formed LaSalle Re
Capital to provide capital support to selected Lloyd's syndicates commencing
in January 1997. See "Business--Reinsurance Products."

Maintain and Develop Relationships with Clients and Brokers. The Company
seeks to maintain and develop long-term relationships with its clients by
providing a high level of service. The Company promptly responds to
underwriting submissions, designs customized programs, offers lead terms when
circumstances warrant and pays valid claims within an average of five days.
The Company retains a substantial portion of its clients
from year to year. Retention of clients permits the Company to use its
knowledge of their underwriting practices and risk management systems to
underwrite its own business with greater precision. In addition, the Company's
relationships with brokers permit it to obtain business and monitor
developments in various lines of reinsurance in order to increase its writings
when market conditions in those lines are favorable. See "Business--
Marketing."

INDUSTRY TRENDS

The Company believes that an imbalance between the supply of and demand for
property catastrophe reinsurance existed in 1993 and resulted in an increase
in premiums from pre-1993 levels. The Company believes that the decrease in
supply of property catastrophe capacity was attributable to the withdrawal, in
whole or in part, of certain reinsurers, including syndicates at Lloyd's, from
the property catastrophe market. Such

33
<PAGE>

withdrawals followed a succession of property catastrophe losses by those
reinsurers that began in 1987 and culminated with hurricane Andrew, which
caused insured claims in excess of $16 billion, as estimated by the Property
Claims Service Division of the American Insurance Services Group, Inc. The
Company believes that the losses suffered by many of such reinsurers were
attributable, in part, to their failure to control aggregate and geographic
exposures, to monitor probability of loss and risk of ruin and, in certain
cases, to write treaties with aggregate limits.

The Company believes that the increase in demand for property catastrophe
reinsurance was attributable to several factors. Among those factors, the
significant property catastrophe losses occurring in 1987 and afterwards
caused many insurers and reinsurers to reexamine their assumptions regarding
their need for reinsurance protection from catastrophe exposures. Also, rating
agencies of insurers and reinsurers began to pay closer attention to
catastrophe exposures. For example, A.M. Best now requires completion of a
catastrophe loss analysis questionnaire dealing with expected claims resulting
from potential catastrophic events. Furthermore, the Statement of Financial
Accounting Standard 113--Accounting and Reporting for Reinsurance of Short-
Duration and Long-Duration Contracts and Issue 93-6 of the Emerging Issues
Task Force prompted insurers to reduce the use of certain types of financial
reinsurance, such as funded covers, that were traditionally used by insurers
as a means of managing catastrophe exposure. Some insurers that previously had
purchased financial reinsurance began seeking to purchase catastrophe
reinsurance instead, further increasing the demand for property catastrophe
reinsurance. Finally, a general increase in insured property values in
catastrophe-exposed areas has contributed to increased demand for property
catastrophe insurance and reinsurance.

The Company believes that the supply and demand imbalance led to the entry
into the market of eight Bermuda-based property catastrophe reinsurance
companies, including the Company. The Company estimates that these reinsurers
had aggregate capital and surplus of approximately $5.2 billion at December
31, 1995 and wrote approximately 25% to 30% of the worldwide property
catastrophe net premiums written in 1995. As a result of the increased
property catastrophe reinsurance capacity, the Company believes that supply
and demand in the property catastrophe reinsurance market became more stable
in 1994 and have remained relatively stable in succeeding years. Based on the
Company's marketing efforts, reinsurance contract submissions and publicly
available information, the Company believes that property catastrophe rates
generally remained at the substantially increased 1993 levels in 1994 and
decreased somewhat in 1995 from 1994 levels. On these same bases, the Company
believes that rates in 1996 have decreased from levels in 1995. In particular,
rates have declined significantly in areas, such as Japan and Europe, where
there has been favorable loss experience, while in the U.S. market, where the
level of property catastrophe losses has generally been higher than in
international markets in recent years, rates have decreased to a lesser
degree. Notwithstanding these rate decreases, the Company believes that
current rates substantially exceed 1992 levels. If and while favorable loss
experience continues and reinsurance capacity does not diminish, the Company
expects further downward pressure on rates during 1997. See "Risk Factors--
Business Considerations."

REINSURANCE PRODUCTS

The Company's property catastrophe reinsurance contracts cover unpredictable
events such as hurricanes, windstorms, hailstorms, earthquakes, fires,
industrial explosions, freezes, riots, floods and other man-made or natural
disasters. The Company's predominant exposure under such coverages is to
property damage. However, other risks, including business interruption and
other non-property losses, may also be covered when arising from a covered
peril. In accordance with market practice, the Company's property catastrophe
reinsurance contracts generally exclude certain risks such as war, nuclear
contamination and radiation.

The Company's property catastrophe reinsurance contracts provide for
aggregate limits on exposure to losses and require cedents to incur insured
losses in specified amounts before the Company becomes obligated to pay
claims. Consequently, the Company expects that most claims under its contracts
will be the result of relatively few high loss catastrophic events. The
Company seeks to moderate its exposure by writing various lines of
reinsurance, limiting the amount of its exposure in each geographic zone
worldwide and implementing

34
<PAGE>

exposure limits and attachment points on each program. Historically, the
Company has not used retrocessions to manage its exposures. Currently, the
Company is negotiating the purchase of non-traditional, multi-year reinsurance
protection to reduce earnings volatility resulting from one or more severe
catastrophic events over a period of years. There can be no assurance that the
Company will be able to obtain such reinsurance on terms acceptable to it.

The occurrence of claims from catastrophic events is likely to result in
substantial volatility in the Company's financial results for any fiscal
quarter or year and could have a material adverse effect on the Company's
financial condition and results of operations and its ability to write new
business. Catastrophic events of significant magnitude historically have been
relatively infrequent, although the Company believes that the property
reinsurance market has experienced a high level of worldwide catastrophic
losses in terms of both frequency and severity from 1987 to the present as
compared with prior periods. The Company expects that increases in the values
and concentrations of insured property and the effects of inflation will
increase the severity of such occurrences per year in the future. See "Risk
Factors--Volatility of Financial Results; Capital Management Strategy."

Types of Reinsurance

The following table sets forth the Company's net premiums written and number
of contracts written by type of reinsurance for the periods indicated (dollars
in millions):

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
---------------------- ----------------------
NET PREMIUMS NUMBER OF NET PREMIUMS NUMBER OF
TYPE OF REINSURANCE WRITTEN CONTRACTS WRITTEN CONTRACTS
------------------- ------------ --------- ------------ ---------
<S> <C> <C> <C> <C>
Property catastrophe reinsurance:
Excess of loss................. $122.4 832 $135.7 773
Pro rata....................... 42.2 10 42.8 10
Other lines of business:
Property--risk excess and pro
rata.......................... 9.7 70 5.3 59
Casualty clash................. 3.0 30 2.6 27
Marine......................... 4.6 17 3.1 4
Miscellaneous.................. 4.8 36 6.4 20
Adjustments and reinstatement
premiums...................... 3.5 -- 6.0 --
------ --- ------ ---
Total........................ $190.2 995 $201.9 893
====== === ====== ===
</TABLE>

Property Catastrophe. The largest portion of the Company's business consists
of property catastrophe excess of loss contracts. Property catastrophe excess
of loss reinsurance provides coverage when total losses and loss expenses from
a single occurrence of a covered peril under a portfolio of primary
reinsurance contracts exceed the attachment point specified in the reinsurance
contract with the primary insurer. Some of the Company's property catastrophe
excess of loss policies limit coverage to one occurrence in a policy year, but
most policies provide for coverage of a second occurrence after the payment of
a reinstatement premium. The Company also writes a minimal amount of aggregate
property catastrophe excess of loss contracts, which cover more than one
catastrophe with one attachment point.

The Company writes pro rata of property catastrophe reinsurance treaties
when it believes that rates and volume are attractive. In such programs, the
Company assumes a specified proportion of the exposure under a portfolio of
excess of loss property catastrophe reinsurance contracts written by the
ceding reinsurer and receives an equal proportion of the premium received by
the cedent. The cedent generally receives a ceding commission, based upon the
premiums ceded to the reinsurer, and may also be entitled to receive a profit
commission based on the ratio of losses, loss expenses and the reinsurer's
expenses to premiums ceded. The Company generally requires that its pro rata
of property catastrophe contracts have aggregate exposure limits per
occurrence on a zonal basis. The Company generally obtains detailed
information concerning each underlying contract and the

35
<PAGE>

exposures underlying the risks it assumes and audits the premiums associated
with the cessions. However, the Company is dependent upon the cedent's
underwriting, pricing and claims administration to yield an underwriting
profit.

Other Lines of Business. The Company's property risk excess of loss
contracts cover a cedent's loss on a single "risk" in excess of the cedent's
attachment point, rather than covering multiple risks as does property
catastrophe reinsurance. A "risk" in this context might mean the insurance
coverage on one building or a group of buildings or the insurance coverage
under a single policy, which the reinsured treats as a single risk. In
property pro rata reinsurance treaties, the Company assumes a proportional
part of the original premiums and losses of the reinsured on non-catastrophe
reinsurance contracts. In property pro rata reinsurance, the reinsurer
generally pays the ceding company a ceding commission. The ceding commission
generally is based on the ceding company's cost of acquiring the business
being reinsured (including commissions, premium taxes, assessments and
miscellaneous administrative expense) and also may include a profit factor.

In addition to property risk excess of loss and pro rata, the Company also
writes other lines of reinsurance, which currently include casualty clash,
marine, crop hail, aviation and satellite. Casualty clash reinsurance protects
cedents against an aggregation of casualty losses incurred by multiple
insureds from a single event. In addition to aggregation of losses, casualty
clash coverage protects a reinsured against a single extraordinary loss caused
by a judgment in excess of the original policy limit issued (including
punitive damages) or an action by an original insured against the insurer for
"bad faith" handling of a claim (extra-contractual obligations). Marine and
aviation risks involve property damage, although they may also involve
casualty coverages arising from the same event causing the property claims.
Crop hail reinsurance provides property coverage for hail damage to crops.
Satellite reinsurance protects the reinsured primarily from losses relating to
launches, improper orbits and other losses in the early stages of the
satellite's life.

The Company has formed LaSalle Re Capital to provide capital support to
selected Lloyd's syndicates commencing in January 1997. The Company expects
that such support will be provided through letters of credit or a deposit of
funds at Lloyd's. The Company is currently negotiating with three syndicates.
One of such syndicates writes direct and facultative property insurance, one
writes marine insurance and reinsurance, and one writes professional indemnity
and directors and officers' insurance and bankers blanket bond business. There
can be no assurance that any such negotiations will result in a definitive
agreement. LaSalle Re Capital's provision of capital support to Lloyd's
syndicates is subject to approval by the appropriate regulatory authorities.

Geographic Diversification

The Company seeks to diversify its property catastrophe exposures across
geographic zones in order to optimize its spread of risk. For the year ended
September 30, 1996, 41.7% of the Company's net premiums written represented
U.S.-based risks. Within the United States, the Company's largest exposure on
a zonal basis is the West Coast, including Hawaii and Alaska. The remaining
58.3% of net premiums written was spread in other territories around the
world. This distribution of risk is subject to change and is dependent upon
rates available in various zones. The Company intends to continue its
expansion in international writings to further diversify its exposures. As a
result of long-term relationships between the Company's management and certain
clients and brokers, the Company has developed a strong base of regional
business in the U.S. This business assists the Company in diversifying its
U.S.-based risks and makes more efficient use of its capital by limiting
multi-zone exposures. In the year ended September 30, 1996, this regional
business represented a significant component of the Company's U.S.-based net
premiums written.

36
<PAGE>

The following table sets forth the percentage of the Company's net premiums
written allocated to the zone of exposure at the dates indicated (dollars in
millions):

<TABLE>
<CAPTION>
GEOGRAPHIC AREA SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
--------------- ------------------- -------------------
PERCENTAGE PERCENTAGE
NET OF NET NET OF NET
PREMIUMS PREMIUMS PREMIUMS PREMIUMS
WRITTEN WRITTEN WRITTEN WRITTEN
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
United States........................... $ 79.4 41.7% $ 91.6 45.4%
Europe (excluding the U.K.)............. 22.0 11.6 21.0 10.4
United Kingdom.......................... 16.3 8.6 14.1 7.0
Japan................................... 8.0 4.2 7.6 3.8
Australasia............................. 11.0 5.8 9.8 4.8
Worldwide............................... 22.0 11.6 26.9 13.3
Worldwide (excluding the U.S.)(1)....... 11.5 6.0 8.8 4.4
Other(2)................................ 16.5 8.6 16.1 8.0
Adjustments and reinstatements.......... 3.5 1.9 6.0 2.9
------ ----- ------ -----
Total............................... $190.2 100.0% $201.9 100.0%
====== ===== ====== =====
</TABLE>
- --------
(1) The category "Worldwide (excluding the U.S.)" consists of contracts that
cover more than one zone (none of which is in the U.S.). The exposure in
this category for business written to date is predominantly from Europe
and Japan.
(2) Other relates to other lines of reinsurance, including casualty clash,
marine, crop hail, aviation and satellite.

Program Limits

The following table sets forth the number of the Company's property
catastrophe excess of loss programs written in the year ended September 30,
1996 by aggregate excess of loss program limits:

<TABLE>
<CAPTION>
NUMBER OF
PROGRAMS
---------
<S> <C>
Greater than $15 million but less than $20 million.............. 2
$10-15 million.................................................. 15
$7.5-10 million................................................. 18
$5-7.5 million.................................................. 36
$2.5-5 million.................................................. 70
Less than $2.5 million.......................................... 209
---
Total....................................................... 350
===
</TABLE>

UNDERWRITING

The Company's principal underwriting strategy is to underwrite property
catastrophe exposures within clearly defined parameters that permit thorough
analysis and appropriate pricing of each of the Company's reinsurance
contracts. Underwriting decisions are made following analysis of each
reinsurance contract based on the expected incremental return on equity in
relation to the Company's overall portfolio of reinsurance contracts.

The Underwriting/Actuarial Committee of the Board has set limits on the
Company's aggregate exposure. The Company uses various methods to evaluate and
monitor its exposure to loss. The Company diversifies its property catastrophe
exposures worldwide and within each geographic zone and also maintains
exposure limits within each geographic zone. Aggregate exposures also are
controlled and monitored on a real-time basis using computer-based rating and
control systems. The Company imposes attachment points in its contracts at a
level that is expected to exceed frequency of loss and limits aggregate risk
exposure. In addition, the Company regularly reevaluates its pricing to ensure
that general market conditions remain attractive.

The Company obtains information from brokers, potential cedents and other
sources, as appropriate, in order to make informed underwriting decisions. A
potential cedent generally is not accepted without a thorough examination of
its historical record, management, business strategy, underwriting policies
and risk management

37
<PAGE>

systems. The Company also seeks to select clients with disciplined catastrophe
management programs. The Company seeks to build long-term relationships with
its clients because the Company believes that it can underwrite renewal
business with greater precision.

The Company uses computer-based modeling systems to estimate exposure to
loss and evaluate pricing adequacy of its reinsurance programs. These models
are also used in the analysis of projected return on equity and the monitoring
of aggregate exposures within geographic zones.

For U.S.-based risks, the Company has developed a proprietary model called
L-CAMTM (LaSalle Catastrophe Analysis Model). L-CAMTM incorporates
commercially available catastrophe simulation models and the Company's
internally-generated models. The commercially available models include (i)
CATMAPTM, which uses market share data derived from zip code and/or country
aggregate data to develop individual contract and portfolio loss statistics
and (ii) IRASTM, which derives loss statistics based on hypothetical risk
location determined from the most detailed information provided by the primary
insurer. Models developed by the Company and used in L-CAMTM include (i) the
Modified Historical Event Model, which fits a Pareto loss distribution to over
45 years of catastrophe loss data, adjusted for inflation and demographic
shifts, (ii) the Market Loss Pricing Model, which uses underwriting-zone
market share information to develop attachment and exhaustion probabilities
from which pricing input is determined and (iii) the Industry Peer Model,
which is a portfolio management tool selecting treaties in force with similar
characteristics for pricing considerations.

For non-U.S. based property catastrophe risks, the Company uses modeling
techniques which incorporate Pareto loss distributions with exposure rating
based on aggregate liabilities per geographic zone. The Company also examines
experience ratings of adjusted historical loss events and, for some non-U.S.
territories, uses a commercially available software program produced by
EQUECAT International, which utilizes probabilistic and deterministic loss
calculations.

For the other lines of reinsurance, the Company uses internal rating
techniques that incorporate, among other things, exposure and experience
ratings and thorough analysis of loss ratios and underwriting expenses
associated with the business to be reinsured. The Company carefully structures
the terms and conditions of its contracts to restrict coverage to the specific
perils intended.

The results of these analyses are measured against the Company's current
portfolio and other known treaties in the market and combined with
management's knowledge of the client and the current reinsurance market
environment. Pricing and participation decisions are then made based on the
estimated exposure of losses and the potential impact of each contract on
incremental return on equity.

Underwriting services are provided to the Company by CNA Bermuda pursuant to
the Underwriting Services Agreement. See "Certain Transactions--Underwriting
Services Agreement." A staff of five professionals with extensive experience
in the reinsurance industry currently serve as the Company's underwriting team
in Bermuda. The Company also has access to the reinsurance expertise of CNA in
terms of underwriting databases and technology, a staff of specialized
professionals and a worldwide network of contacts in the reinsurance market.
In addition, the underwriting of all new exposures is reviewed by the Chief
Executive Officer or Chief Underwriting Officer of the Company.

MARKETING

The Company markets its reinsurance products worldwide primarily through
reinsurance brokers. By marketing its products primarily through the broker
network, the Company avoids the expense of establishing and maintaining
worldwide offices and marketing operations. The Company believes that its
broker relationships permit it to obtain business and monitor developments in
various lines of reinsurance in order to increase its writings when market
conditions in those lines are favorable.

38
<PAGE>

The Company maintains an office in London, England through LaSalle Re
Services. LaSalle Re Services introduces prospective customers to the Company
and provides an important liaison with brokers in the London Market, assisting
in the distribution of marketing literature and collecting information for
LaSalle Re on demand and developments in the London reinsurance market
generally. In addition, LaSalle Re Services plays a key role in the Company's
marketing efforts in Europe.

The Company strives to develop strong relationships with its brokers and
clients. Retention of clients permits the Company to use experience regarding
a client's underwriting practices and risk management systems to underwrite
its own business with greater precision. The Company also targets brokers and
clients that it believes will enhance the risk/return composition of its
portfolio, are capable of supplying detailed and accurate underwriting data
and can potentially add diversification to the Company's book of business.
Additionally, the Company believes that its level of capital and surplus
offers financial security and demonstrates to brokers and clients a high level
of commitment to property catastrophe reinsurance.

The Company focuses on providing high quality service by promptly responding
to underwriting submissions, designing customized programs, offering lead
terms when circumstances warrant and paying valid claims within an average of
five days. The Company believes that it has established a reputation with its
brokers and clients for high quality service.

The Company received approximately 3,423 contract submissions in the year
ended September 30, 1996 as compared to 3,667 in the year ended September 30,
1995. The Company is highly selective in accepting risks, extending coverage
on only 995 contracts, or 29.1% of the program submissions received, in the
year ended September 30, 1996. Subsidiaries and affiliates of Aon were brokers
for approximately 12.4% and 10.6% of the Company's net written premiums in the
years ended September 30, 1996 and 1995, respectively. Guy Carpenter &
Company, Inc., together with its affiliates, generated 16.6% of the Company's
net premiums written for the year ended September 30, 1996 and 21.1% of the
Company's net premiums written for the year ended September 30, 1995. No other
broker accounted for more than 10% of the Company's net premiums written for
the years ended September 30, 1996 or 1995.

Consistent with its emphasis on disciplined underwriting practices, the
Company is not obligated to accept any business from any intermediary,
including Aon, CNA or LaSalle Re Services. No intermediary has the authority
to bind the Company on any business.

RESERVES

The Company establishes loss reserves for the ultimate settlement costs of
all losses and loss expenses incurred with respect to business written by it.
As at September 30, 1996, the Company's total incurred losses and loss
expenses from inception was $161.7 million. See "Management's Discussion and
Analysis of Financial Conditions and Results of Operations" and Note 9 to the
Consolidated Financial Statements. GAAP does not permit the Company to
establish reserves with respect to its property catastrophe reinsurance until
an event occurs that may give rise to a claim. As a result, only loss reserves
applicable to losses incurred up to the reporting date may be set aside, with
no allowance for the provision of a contingency reserve to account for
expected future losses.

The derivation of loss reserves involves the actuarial and statistical
projection at any given time of the Company's expectations of the ultimate
settlement of loss and loss expenses. These loss projections become necessary,
in large part, as a result of time lags associated with reinsurance loss
reporting. These lags are principally attributable both to claimant delays in
reporting to the primary carrier as well as primary and reinsurance company
delays in gathering statistics and subsequently reporting cession details to
the Company. As a result, in addition to the loss estimates reported by
primary insurers on known claims, actuarially projected estimates of reserves
applicable to both the development (growth) of known claims as well as the
emergence of new claims reports related to losses events which have been
incurred but not reported ("IBNR losses") prior to the evaluation date must be
developed. In addition to the impact of reporting lags upon the accuracy of
estimated

39
<PAGE>

loss liabilities, other factors have tremendous impact upon the ultimate
settlement of insured losses, including loss cost inflation, trends in the
amount of insurance purchased to the full value of insured properties and
trends in the size and demographics of insured populations. The loss reserve
estimates are not precise in that they necessarily involve an attempt to
predict the ultimate outcome of future loss reporting and settlement
activities.

To establish appropriate loss reserves, the Company uses a combination of
data sources and commercially available catastrophe models. These models are
employed upon the occurrence of an event to arrive at estimates of losses to
the Company. In addition, grouped and individual contract data illustrating
the loss development history for prior similar events, as well as actual loss
emergence experience of the underlying insurers, are analyzed to assist in the
determination of suitable loss reserves. The data derived from the industry
sources, and supplemented with the client specific information, are then used
to arrive at estimates of loss emergence patterns and initial estimates of
ultimate loss rates. These parameters are then applied, on a contract by
contract basis, to arrive at estimates of ultimate losses. These loss
estimates are then supplemented with the results derived from the catastrophe
models, and final loss estimates are selected and reduced for losses reported
to the Company to arrive at IBNR losses as of the date of evaluation.

The reserves are reviewed regularly by the Company's actuaries and executive
officers and the Board of Directors of LaSalle Re, and to the extent they
develop upward or downward, the results are reflected in the net income in the
period in which the reserve deficiency or redundancy is evaluated. There can
be no assurance that the final loss settlements will not exceed the Company's
loss reserve and have a material adverse effect upon the Company's financial
condition and results of operations in a particular period. See "Risk
Factors--Loss Reserves."

The Company determines its reserves with the assistance of actuarial staff
provided by Aon Bermuda pursuant to the Administrative Services Agreement. See
"Certain Transactions--Administrative Services Agreement."

INVESTMENTS

Composition of Portfolio

The Board has implemented a set of investment guidelines designed to meet
the Company's liquidity requirements and return objectives. The guidelines are
intended to be conservative, stressing preservation of principal, yield
enhancement through the identification of value and market inefficiencies,
market liquidity and risk reduction. The primary objective of the investment
portfolio, as set forth in the guidelines, is to maximize investment returns
consistent with these policies. The Company's investment guidelines are
reviewed periodically and are subject to change at the discretion of the
Board.

The following table summarizes the composition of the Company's investment
portfolio as of September 30, 1996 and 1995 (dollars in millions):

<TABLE>
<CAPTION>
TYPE OF INVESTMENT SEPTEMBER 30,
------------------ --------------------------
1996 1995
------------ ------------
FAIR % OF FAIR % OF
VALUE TOTAL VALUE TOTAL
------ ----- ------ -----
<S> <C> <C> <C> <C>
Fixed maturities:
Non-U.S. government bonds and agencies............ $ 75.3 14.0% $ 63.3 12.1%
U.S. government bonds and agencies................ 90.1 16.8 4.9 0.9
Corporate bonds................................... 325.1 60.5 371.8 71.2
------ ----- ------ -----
Subtotal........................................ 490.5 91.3 440.0 84.2
Cash and cash equivalents........................... 47.0 8.7 82.4 15.8
------ ----- ------ -----
Total investments............................... $537.5 100.0% $522.4 100.0%
====== ===== ====== =====
</TABLE>

40
<PAGE>

Quality of Portfolio

The Company has investment guidelines which restrict investments in
securities below an "AA" grade rating to 15% of the total portfolio, and only
10% can be invested in "BBB" grade rating. In addition, the guidelines
restrict investments in a single issuer to no greater than 5% of the market
value of the portfolio (except for U.S. and U.K. Government issues) and, with
respect to country of issue, to no greater than 25% of the market value of the
portfolio, except for U.S. and supernational borrowers.

The following table summarizes the composition of the Company's fixed
maturity portfolio by rating as assigned by S&P or Moody's as of September 30,
1996 and 1995 (dollars in millions):

<TABLE>
<CAPTION>
RATING SEPTEMBER 30,
------ --------------------------
1996 1995
------------ ------------
FAIR % OF FAIR % OF
VALUE TOTAL VALUE TOTAL
------ ----- ------ -----
<S> <C> <C> <C> <C>
AAA................................................. $310.5 63.3% $305.4 69.4%
AA.................................................. 126.1 25.7 134.6 30.6
A................................................... 53.9 11.0 -- --
------ ----- ------ -----
$490.5 100.0% $440.0 100.0%
====== ===== ====== =====
</TABLE>

Maturity and Duration of Portfolio

The Company's investment guidelines specify a one to four year duration for
the Company's investment portfolio, reflecting the need to maintain a liquid,
short duration portfolio to assure the Company's ability to pay claims on a
timely basis. The Company currently has a target duration for the portfolio of
three years and at September 30, 1996, the modified average duration of the
portfolio was 2.57 years. The Company expects to periodically reevaluate the
target duration in light of market conditions, including the level of interest
rates, and estimates of the duration of its liabilities.

The following table summarizes the contractual maturities of the Company's
fixed maturity portfolio as of September 30, 1996 and 1995 (dollars in
millions):

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------------
1996 1995
------------ ------------
<S> <C> <C> <C> <C>
Due in less than one year..................... $ 99.8 20.4% $ 45.1 10.3%
Due in one to five years...................... 331.8 67.6 353.3 80.3
Due in five to ten years...................... 58.9 12.0 41.6 9.4
Greater than 10 years......................... -- -- -- --
------ ----- ------ -----
$490.5 100.0% $440.0 100.0%
====== ===== ====== =====
</TABLE>

Equity Securities/Real Estate

Pursuant to the Company's investment guidelines, the Company's investment
portfolio may not contain any direct investments in real estate, mortgage
loans or equity securities.

Foreign Currency Exposures

At present, the Company's fixed maturity portfolio is composed only of
securities denominated in U.S. dollars. In the future, the Company's
investment managers may be instructed to invest some of the fixed maturity
portfolio in securities denominated in currencies other than U.S. dollars
based upon the business the Company anticipates writing, the exposures and
claims reserves on the Company's books and the local currency outlook compared
to that of the U.S. dollar. The primary risk exposures and premiums receivable
are denominated in U.S. dollars, European currencies, Japanese yen and
Australian dollars.

41
<PAGE>

In an effort to manage its exposure to foreign currency exchange rate
fluctuations, the Company from time to time enters into foreign exchange
contracts. These contracts generally involve the exchange of one currency for
U.S. dollars at some future date. At September 30, 1996, the Company had a
notional principal amount outstanding of approximately $25.2 million in
foreign exchange contracts as compared to $6.1 million at September 30, 1995.
The carrying value of these contracts at September 30, 1996 approximated their
fair value. Realized and unrealized gains or losses on these contracts are
recorded as an income item in the Company's consolidated statement of
operations. Foreign exchange contracts at September 30, 1996 generally had
maturities of six months or less and related to major Western currencies.

Diversification and Liquidity

Pursuant to the investment guidelines of the Company, no more than 25% of
the fair market value of the Company's investment portfolio may be invested in
the securities of any sovereign government or agency issuing in its own
currency (except for the U.S. and supernational entities). Additionally, no
more than 5% of the fair market value of the investment portfolio may be
invested in securities issued by any single issuer.

Investment Manager

LaSalle Re has entered into the Investment Management Agreement with Aon
Advisors (the "Investment Manager"). Pursuant to the terms of the Investment
Management Agreement, the Company pays the Investment Manager a fee equal to
0.35% per annum of the first $100 million of assets under management, 0.25%
per annum of the next $100 million of assets under management in excess of
$100 million and 0.15% per annum of any additional assets under management in
excess of $200 million. The terms of the Investment Management Agreement were
determined in arm's length commercial negotiations. The performance of, and
the fees paid to, the Investment Manager under the Investment Management
Agreement are reviewed periodically by the Board. See "Certain Transactions--
Investment Management Agreement."

COMPETITION

The property catastrophe reinsurance industry is highly competitive. The
Company competes, and will continue to compete, with major U.S. and non-U.S.
insurers and property catastrophe reinsurers, including other Bermuda based
property catastrophe reinsurers and CNA, some of which have greater financial
and organizational resources than the Company. There may be established
companies or new companies of which the Company is not aware which may be
planning to enter the property catastrophe reinsurance market or existing
reinsurers which may be planning to raise additional capital. In addition,
Lloyd's began to allow capital from corporate investors in 1994. Competition
in the types of reinsurance business that the Company underwrites is based on
many factors, including rates and other terms and conditions offered, services
provided, ratings assigned by independent rating agencies, speed of claims
payment and reputation, the perceived financial strength and experience of the
reinsurer in the line of reinsurance to be written.

In April 1996, LaSalle Re received an initial rating from A.M. Best of "A-"
(Excellent). Prior to that time, LaSalle Re was not rated by any rating
agency. The rating received by LaSalle Re represents the fourth highest in the
rating scale used by A.M. Best. In October 1996, LaSalle Re received an
initial rating of its claims paying ability from S&P of "A" (Good). The rating
received by LaSalle Re represents the sixth highest in the rating scale used
by S&P. Such ratings are based on factors of concern to cedents and brokers
and are not directed toward the protection of investors. Such ratings are
neither a rating of securities nor a recommendation to buy, hold or sell such
securities. While the Company believes that its new ratings will not be a
major competitive advantage or disadvantage, some of the Company's principal
competitors have higher ratings than the Company. Insurance ratings are one
factor used by brokers and cedents as a means of assessing the financial
strength and quality of reinsurers. In addition, a cedent's own rating may be
adversely affected by the lack of a rating of its reinsurer. Therefore, a
cedent may elect to reinsure with a competitor of the Company that has a
higher insurance rating. Similarly, the lowering or loss of a rating in the
future could adversely affect the Company's ability to compete.

42
<PAGE>

The Company is not licensed or admitted as an insurer in any jurisdiction
other than Bermuda and has no plans to become so licensed or admitted. Because
jurisdictions in the United States do not permit insurance companies to take
credit for reinsurance obtained from unlicensed or non-admitted insurers on
their statutory financial statements unless security is posted, the Company's
reinsurance contracts generally require it to post a letter of credit or
provide other security for outstanding claims and/or unearned premiums. In
order to post these letters of credit, the Company generally is required to
provide the issuing banks with collateral equal to such amounts. As a result
of the size of the Company's capitalization, the Company does not believe that
its non-admitted status in any jurisdiction has, or should have, a material
adverse effect on its ability to compete or obtain business in the property
catastrophe reinsurance market in which it operates, principally because many
of the Company's competitors are not admitted or licensed in United States
jurisdictions. However, there can be no assurance that increased competitive
pressure from current reinsurers and future market entrants or the Company's
non-admitted status will not adversely affect the Company. See "Risk Factors--
Competition; Ratings; Non-Admitted Status."

EMPLOYEES

The Company has three employees, which are Mr. Blake, Chairman, Chief
Executive Officer and President of Holdings, Mr. Cook, Chief Financial Officer
and Treasurer of Holdings and the Company's Investor Relations Manager. In
addition to their activities, the Company's day-to-day operations are
performed by affiliates of Aon and CNA pursuant to the Service Agreements.
Under the Service Agreements, 31 employees of Aon and CNA are currently
dedicated to the Company. See "Certain Transactions." The Company believes
that its employee relations are satisfactory. None of the Company's employees
are subject to collective bargaining agreements, and the Company knows of no
current efforts to implement such agreements at the Company.

PROPERTIES

The Company is provided office space in Bermuda and London by Aon Bermuda
pursuant to the Administrative Services Agreement. See "Certain Transactions--
Administrative Service Agreement."

LEGAL PROCEEDINGS

The Company is not currently involved in any litigation or arbitration. The
Company expects, however, that it will be subject to litigation and
arbitration from time to time in the ordinary course of its business.

REGULATION

Bermuda

The Insurance Act 1978, as amended, and Related Regulations. As a holding
company, Holdings is not subject to Bermuda insurance regulations. However,
the Insurance Act, which regulates the insurance business of LaSalle Re,
provides that no person shall carry on an insurance business in or from within
Bermuda unless registered as an insurer under the Insurance Act by the
Minister of Finance (the "Minister"). The Minister, in deciding whether to
grant registration, has broad discretion to act as he thinks fit in the public
interest. The Minister is required by the Insurance Act to determine whether
the applicant is a fit and proper body to be engaged in the insurance business
and, in particular, whether it has, or has available to it, adequate knowledge
and expertise. The registration of an applicant as an insurer is subject to
its complying with the terms of its registration and such other conditions as
the Minister may impose at any time.

An Insurance Advisory Committee appointed by the Minister advises him on
matters connected with the discharge of his functions, and sub-committees
thereof supervise and review the law and practice of insurance in Bermuda,
including reviews of accounting and administrative procedures.

The Insurance Act imposes on Bermuda insurance companies solvency and
liquidity standards and auditing and reporting requirements and grants to the
Minister powers to supervise, investigate and intervene in the affairs of
insurance companies. Other significant aspects of the Bermuda insurance
regulatory framework are set forth below.

43
<PAGE>

Cancellation of Insurer's Registration. An insurer's registration may be
cancelled by the Minister on certain grounds specified in the Insurance Act,
including failure of the insurer to comply with its obligations under the
Insurance Act or, if in the opinion of the Minister after consultation with
the Insurance Advisory Committee, the insurer has not been carrying on
business in accordance with sound insurance principles.

Independent Approved Auditor. Every registered insurer must appoint an
independent auditor who will annually audit and report on the Statutory
Financial Statements and the Statutory Financial Return of the insurer, both
of which, in the case of LaSalle Re, are required to be filed annually with
the Registrar of Companies (the "Registrar"), who is the chief administrative
officer under the Insurance Act. The independent auditor of the insurer must
be approved by the Minister and may be the same person or firm which audits
the insurer's financial statements and reports for presentation to its
shareholders.

Loss Reserve Specialist. LaSalle Re is registered as a Class 4 insurer.
Every Class 4 insurer is required to submit an annual loss reserve opinion
when filing the Annual Statutory Financial Return. This opinion must be issued
by a Loss Reserve Specialist. The Loss Reserve Specialist, who will normally
be a qualified casualty actuary, must be approved by the Minister.

Statutory Financial Statements. An insurer must prepare Annual Statutory
Financial Statements. The Insurance Act prescribes rules for the preparation
and substance of such Statutory Financial Statements (which include, in
statutory form, a balance sheet, income statement, statement of capital and
surplus and detailed notes thereto). The insurer is required to give detailed
information and analyses regarding premiums, claims, reinsurance and
investments. The Statutory Financial Statements are not prepared in accordance
with GAAP and are distinct from the financial statements prepared for
presentation to the insurer's shareholders under the Companies Act 1981 of
Bermuda, which financial statements may be prepared in accordance with GAAP.
LaSalle Re is required to submit the Annual Statutory Financial Statements as
part of the Annual Statutory Financial Return.

Minimum Solvency Margin. The Insurance Act provides that the statutory
assets of an insurer must exceed its statutory liabilities by an amount
greater than the prescribed minimum solvency margin which varies with the type
of business and class of registration of the insurer and the insurer's net
premiums written and loss reserve level. As a registered Class 4 insurer,
LaSalle Re is required to maintain a minimum solvency margin equal to the
greatest of $100 million, 50% of its net premiums written and 15% of its loss
and other certain insurance reserves. At September 30, 1996, LaSalle Re's
actual statutory capital and surplus was $476.7 million, compared to its
minimum solvency margin requirement of $100 million.

Minimum Liquidity Ratio. The Insurance Act provides a minimum liquidity
ratio for general business. An insurer engaged in general business is required
to maintain the value of its relevant assets at not less than 75% of the
amount of its relevant liabilities. Relevant assets include cash and time
deposits, quoted investments, unquoted bonds and debentures, first liens on
real estate, investment income due and accrued, accounts and premiums
receivable and reinsurance balances receivable. There are certain categories
of assets which, unless specifically permitted by the Minister, do not
automatically qualify as relevant assets, such as unquoted equity securities,
investments in and advances to affiliates, real estate and collateral loans.
The relevant liabilities are total general business insurance reserves and
total other liabilities less deferred income tax and sundry liabilities (by
interpretation, those not specifically defined).

Annual Statutory Financial Return. LaSalle Re is required to file with the
Registrar an Annual Statutory Financial Return no later than four months after
its financial year end (unless specifically extended). The Annual Statutory
Financial Return includes, among other matters, a report of the approved
independent auditor on the Annual Statutory Financial Statements of the
insurer; a declaration of the statutory ratios; a solvency certificate; the
Annual Statutory Financial Statements themselves; the opinion of the approved
Loss Reserve Specialist and certain details concerning ceded reinsurance. The
solvency certificate and the declaration of the statutory ratios must be
signed by the principal representative and at least two directors of the
insurer who are required to state (among other matters) whether the Minimum
Solvency Margin and, in the case of the solvency certificate, the

44
<PAGE>

Minimum Liquidity Ratio have been met, and the independent approved auditor is
required to state whether in its opinion it was reasonable for them to so
state and whether the declaration of the statutory ratios complies with the
requirements of the Insurance Act. The Statutory Financial Return must include
the opinion of the Loss Reserve Specialist in respect of the loss and loss
expense provisions of LaSalle Re. Where an insurer's accounts have been
audited for any purpose other than compliance with the Insurance Act, a
statement to that effect must be filed with the Statutory Financial Return.

Supervision, Investigation and Intervention. The Minister may appoint an
inspector with extensive powers to investigate the affairs of an insurer if
the Minister believes that an investigation is required in the interest of the
insurer's policyholders or persons who may become policyholders. In order to
verify or supplement information otherwise provided to him, the Minister may
direct an insurer to produce documents or information relating to matters
connected with the insurer's business.

If it appears to the Minister that there is a risk of the insurer becoming
insolvent or that it is in breach of the Insurance Act or any conditions
imposed upon its registration, the Minister may (among other matters) direct
the insurer not to take on any new insurance business; not to vary any
insurance contract if the effect would be to increase the insurer's
liabilities; not to make certain investments; to realize certain investments;
to maintain in Bermuda, or transfer to the custody of a specified bank,
certain assets; not to declare or pay any dividends or other distributions or
to restrict the making of such payments; and/or to limit its premium income.

Principal Representative. An insurer is required to maintain a principal
office in Bermuda and to appoint and maintain a principal representative in
Bermuda. For the purpose of the Insurance Act, the principal office of LaSalle
Re is at the Company's offices at 25 Church Street, Hamilton HM FX Bermuda,
and Andrew Cook is the principal representative of LaSalle Re. Without a
reason acceptable to the Minister, an insurer may not terminate the
appointment of its principal representative, and the principal representative
may not cease to act as such, unless 30 days' notice in writing to the
Minister is given of the intention to do so. It is the duty of the principal
representative, within 30 days of his reaching the view that there is a
likelihood of the insurer for which he acts becoming insolvent or its coming
to his knowledge, or his having reason to believe, that an "event" has
occurred, to make a report in writing to the Minister setting out all the
particulars of the case that are available to him. Examples of such an "event"
include failure by the reinsurer to comply substantially with a condition
imposed upon the reinsurer by the Minister relating to a solvency margin or a
liquidity or other ratio.

Class 4 Insurer. LaSalle Re is registered as a Class 4 insurer and, as such:
(i) is required to maintain a minimum statutory capital and surplus equal to
the greatest of $100 million, 50% of its net premiums written and 15% of its
loss and other insurance reserves; (ii) is required to file annually within
four months following the end of the relevant financial year with the
Registrar a Statutory Financial Return together with a copy of its Annual
Statutory Financial Statements and an opinion of a Loss Reserve Specialist in
respect of its loss and loss expense provisions; (iii) is prohibited from
declaring or paying any dividends during any financial year if it is in breach
of its minimum solvency margin or minimum liquidity ratio or if the
declaration or payment of such dividends would cause it to fail to meet such
margin or ratio (if it has failed to meet its minimum solvency margin or
minimum liquidity ratio on the last day of any financial year, LaSalle Re will
be prohibited, without the approval of the Minister, from declaring or paying
any dividends during the next financial year); (iv) is prohibited from
declaring or paying in any financial year dividends of more than 25% of its
total statutory capital and surplus (as shown on its previous financial year's
statutory balance sheet) unless it files with the Registrar an affidavit
stating that it will continue to meet the required margins; (v) is prohibited,
without the approval of the Minister, from reducing by 15% or more its total
statutory capital, as set out in its previous year's financial statements; and
(vi) is required, at any time it fails to meet its solvency margin, within 30
days (45 days where total statutory capital and surplus falls to $75 million
or less) after becoming aware of that failure or having reason to believe that
such failure has occurred to file with the Minister a written report
containing certain information.

Certain Other Considerations. As "exempted" companies, Holdings and LaSalle
Re may not, without the express authorization of the Bermuda legislature or a
license granted by a Minister, participate in certain business transactions,
including: (i) the acquisition or holding of land in Bermuda (except that
required for its business

45
<PAGE>

and held by way of lease or tenancy agreement for a term not exceeding 21
years); (ii) the taking of mortgages on land in Bermuda in excess of $50,000;
or (iii) the carrying on of business of any kind in Bermuda, except in
furtherance of the business of the Company carried on outside Bermuda.

The Bermuda government actively encourages foreign investment in "exempted"
entities like the Company that are based in Bermuda but do not operate in
competition with local businesses. As well as having no restrictions on the
degree of foreign ownership, Holdings and LaSalle Re are not currently subject
to taxes on their income or dividends or to any foreign exchange controls in
Bermuda. In addition, there currently is no capital gains tax in Bermuda, and
profits can be accumulated by Holdings and LaSalle Re, as required, without
limitation.

UNITED STATES, UNITED KINGDOM AND OTHER

LaSalle Re is registered as an insurer and is subject to regulation and
supervision in Bermuda. LaSalle Re is not admitted or authorized to do
business in any jurisdiction except Bermuda. The insurance laws of each state
of the United States do not directly regulate the sale of reinsurance within
their jurisdictions by alien insurers, such as LaSalle Re. Nevertheless, the
sale of reinsurance by alien reinsurers, such as LaSalle Re, to insurance
companies domiciled or licensed in United States jurisdictions is indirectly
regulated by state "credit for reinsurance" laws that operate to deny
financial statement credit to ceding insurers unless the non-admitted alien
reinsurer posts acceptable security for ceded liabilities and agrees to
certain contract provisions (e.g., insolvency and intermediary clauses).
Although the insurance laws of United States jurisdictions generally exempt
the business of reinsurance from "doing business" laws, the Company conducts
its business at its principal offices in Bermuda and does not maintain an
office in the United States, and its personnel do not solicit, advertise,
settle claims or conduct other insurance activities in the United States. All
policies are issued and delivered and premiums are received outside the United
States. The Company does not believe that it is subject to the insurance laws
of any state in the United States.

LaSalle Re does not intend to maintain an office or to solicit, advertise,
settle claims or conduct other insurance activities in any jurisdiction other
than Bermuda where the conduct of such activities would require that LaSalle
Re be so admitted. Consistent with this policy, LaSalle Re established LaSalle
Re Services as a subsidiary in the United Kingdom to operate a London "contact
office" at the London Underwriting Center. LaSalle Re Services is not
registered as an insurer in England or in any other jurisdiction. The Company
believes that LaSalle Re Services is not required to be registered as an
insurance company in the United Kingdom, and that the activities of LaSalle Re
Services do not cause the Company to be subject to regulation as an insurance
company in the United Kingdom.

46
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth the names, ages and positions of the persons who
are the directors and executive officers of the Company as of September 30,
1996.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Victor H. Blake......... 61 Chairman, Chief Executive Officer and President; Director
William J. Adamson, Jr.. 43 Deputy Chairman; Director
Andrew Africk........... 30 Director
Ivan P. Berk............ 59 Director
Joseph Haviv............ 42 Director
Jonathan H. Kagan....... 40 Director
Donald P. Koziol, Jr.... 48 Director
Lester Pollack.......... 63 Director
Peter J. Rackley........ 58 Director
Scott A. Schoen......... 38 Director
Harvey G. Simons........ 49 Director
David A. Stockman....... 49 Director
Paul J. Zepf............ 31 Director
Guy D. Hengesbaugh...... 37 Executive Vice President and Chief Underwriting Officer
Andrew Cook............. 34 Chief Financial Officer and Treasurer
</TABLE>

Victor H. Blake has been Chairman, Chief Executive Officer and President of
Holdings since its organization in September 1995 and Chairman and Chief
Executive Officer of LaSalle Re since May 1994. Mr. Blake has 37 years
experience in the insurance industry, concentrating primarily in reinsurance.
Mr. Blake served as Chairman and Chief Executive Officer of CNA Re, a leading
property and casualty insurer operating in the London market, from its
formation in 1976 until October 1995. In addition, he acted as the chairman
and chief executive officer of CNA Reinsurance Group, from its formation in
April 1994 until October 1995. CNA Reinsurance Group includes CNA Re and CNA's
United States reinsurance operations. Mr. Blake is the non-executive chairman
of CNA Reinsurance Group. Mr. Blake is also founder Chairman of the LUC
Holdings Ltd, the shareholders of the London Underwriting Centre, a
marketplace housing many of the London market insurers and reinsurers. He also
served as a member of the Council of the London Insurance and Reinsurance
Market Association and its predecessor bodies from 1977 to 1996.

William J. Adamson, Jr. has been Deputy Chairman and a director of Holdings
since its organization in September 1995 and a director of LaSalle Re since
its organization in October 1993. He also served as Chairman of LaSalle Re
from its inception until May 1994. Mr. Adamson has 21 years experience with
CNA in the reinsurance industry in Chicago and London. Mr. Adamson became
Chief Executive Officer of CNA Re in November 1995. Mr. Adamson has been
Senior Vice President of Continental Casualty Company ("CCC") since November
1995 and head of its Chicago-based reinsurance operations and also President
of CNA Re and CNA Bermuda since 1993. Prior to his appointment as Senior Vice
President, he was a Group Vice President and a Vice President of CCC and its
principal insurance subsidiaries. Mr. Adamson has acted as the chief operating
officer of CNA Reinsurance Group since its formation in April 1994 and became
its chief executive officer in November 1995.

Andrew Africk has been a director of Holdings since its organization in
September 1995 and an alternate director of LaSalle Re since its organization
in October 1993. Mr. Africk has been associated since 1992 with Apollo
Advisors, L.P., which acts as managing general partner of certain securities
investment funds, and Lion Advisors, L.P., which acts as financial advisor to
and representative for certain institutional investors with respect to
securities investments. Prior thereto, Mr. Africk was completing graduate
degree programs at the Wharton School of Business and the University of
Pennsylvania Law School. Mr. Africk is also a director of Continental Graphics
Holdings, Inc. and Culligan Water Technologies, Inc.

47
<PAGE>

Ivan P. Berk has been a director of Holdings since its organization in
September 1995 and an alternate director of LaSalle Re since its organization
in October 1993. He has been Executive Director-Manager of Equities of Aon
Advisors, Inc. since March 1993 and was Senior Portfolio Manager of Aon
Advisors, Inc. from December 1990 until March 1993. Mr. Berk has 28 years of
investment experience, including the formation of six insurance related
companies in the last three years.

Joseph Haviv has been a director of Holdings since October 1995. Mr. Haviv
has been Vice President of EXOR America Inc. since April 1994. Prior to his
current position with EXOR America Inc., Mr. Haviv was a Principal of McKinsey
& Company, Inc.

Jonathan H. Kagan has been a director of Holdings since its organization in
September 1995 and a director of LaSalle Re since its organization in October
1993. Mr. Kagan is a Managing Director of Corporate Advisors, L.P., which he
joined in 1988. Mr. Kagan has also been associated with Lazard Freres & Co.
LLC since 1980, has been a Managing Director since 1995 and is a Managing
Director of Centre Partners Management llc. Mr. Kagan is also a director of
Continental Cablevision, Inc., Tyco Toys Inc. and Firearms Training Systems,
Inc.

Donald P. Koziol, Jr. has been a director of Holdings since its organization
in September 1995. Mr. Koziol has been Executive Vice President and Chief
Operating Officer of Aon Risk Services since January 1995. Mr. Koziol was
Chairman and Chief Executive Officer of Carvill America, Inc., a reinsurance
brokerage firm, from 1984 until 1994.

Lester Pollack has been a director of Holdings since its organization in
September 1995 and director of LaSalle Re since its organization in October
1993. Mr. Pollack was a Deputy Chairman of LaSalle Re from October 1993 to May
1996. Mr. Pollack has been a Managing Director of Centre Partners Management
llc since 1995, Senior Managing Director of Corporate Advisors, L.P. since
1988, Managing Director of Lazard Freres & Co. LLC since 1986 and Chief
Executive Officer of Centre Partners, L.P. since 1986. Mr. Pollack is also a
director of Continental Cablevision, Inc., Parlex Corporation, Polaroid
Corporation, Sphere Drake Holdings, Ltd., SunAmerica, Inc. and Tidewater Inc.

Peter J. Rackley has been a director of Holdings since its organization in
September 1995 and a director of LaSalle Re since its organization in October
1993. Mr. Rackley has been Chairman and Group Chief Executive of Western
International Financial Group Ltd., a Bermuda-based insurance business, since
1993. Prior to that, Mr. Rackley held senior management executive positions in
General Accident Fire & Life Assurance Company plc and NZI Insurance Group.
Mr. Rackley is also Chairman of Catlin Westgen Holdings Limited, Westgen High
Ridge Holdings Limited, and CHA Insurance Company Limited and Deputy Chairman
of Commercial Risk Partners Limited.

Scott A. Schoen has been a director of Holdings since its organization in
September 1995 and a director of LaSalle Re since its organization in October
1993. Mr. Schoen is a Managing Director of Thomas H. Lee Company which he
joined in 1986. Mr. Schoen is also a director of Alliance International Group,
Inc., Anchor Advanced Products, Health O Meter Products Inc., Rayovac
Corporation and First Alert, Inc. and a Trustee of Insight Premier Funds.

Harvey G. Simons has been a director of Holdings since its organization in
September 1995 and a director of LaSalle Re since its organization in October
1993. Mr. Simons has served as Executive Vice President and Chief Underwriting
Officer of CNA International Reinsurance Company Limited for more than five
years.

David A. Stockman has been a director of Holdings since its organization in
September 1995 and a director of LaSalle Re since its organization in October
1993. Mr. Stockman was a Deputy Chairman of LaSalle Re from October 1993 to
May 1996. Mr. Stockman has been a General Partner of Blackstone Group Holdings
L.P. ("Blackstone") since 1988. Prior to joining Blackstone, Mr. Stockman was
a Managing Director of Salomon Brothers Inc. Mr. Stockman served as the
Director of the Office of Management and Budget in the Reagan Administration
from 1981 to 1985. Prior to that, Mr. Stockman represented Southern Michigan
in the U.S. House of Representatives. Mr. Stockman is also a director of
Collins & Aikman Corporation.

48
<PAGE>

Paul J. Zepf has been a director of Holdings since May 1996. Previously he
had been an alternate director of LaSalle Re since its organization in
September 1993. He is a Principal of Corporate Advisors, L.P., which he joined
in 1989. Mr. Zepf is also a Principal of Centre Partners Management llc, which
manages Centre Capital Investors II, L.P. and related investment funds. Mr.
Zepf is also a director of Firearms Training Systems, Inc.

Guy D. Hengesbaugh has been Executive Vice President and Chief Underwriting
Officer of Holdings since its organization in September 1995 and Executive
Vice President and Chief Underwriting Officer of LaSalle Re since its
organization in October 1993. Mr. Hengesbaugh has ten years experience in
underwriting management with CNA in Chicago and London. Mr. Hengesbaugh is a
Vice President of CCC and an employee of CNA Bermuda and his services are made
available to the Company pursuant to the Underwriting Services Agreement. See
"Certain Transactions--Underwriting Services Agreement."

Andrew Cook, a Chartered Accountant, has been Chief Financial Officer and
Treasurer of Holdings since its organization in September 1995 and Chief
Financial Officer and Treasurer of LaSalle Re since its organization in
October 1993. Mr. Cook was an employee of Aon from 1993 until October 1995.
Mr. Cook was employed by Becher and Carlson Risk Management Limited, a
subsidiary of American Re, from November 1990 to October 1993, where he was a
Vice President responsible for a portfolio of captive insurance companies.
From December 1987 to October 1990, Mr. Cook was an audit manager with Ernst &
Young in Bermuda specializing in the audit of insurance and reinsurance
companies.

None of the directors or executive officers has any family relationship with
any other director or executive officer.

INFORMATION REGARDING THE BOARD AND ITS COMMITTEES

The Board is divided into three classes of directors. The terms of office of
those directors in the first class (Messrs. Adamson, Berk, Schoen, Stockman
and Zepf) expire in 1999, of those in the second class (Messrs. Blake, Haviv,
Pollack and Simons) expire in 1997 and of those in the third class (Messrs.
Africk, Kagan, Koziol and Rackley) expire in 1998. The directors of the class
elected at each future annual meeting of shareholders hold office for a term
of three years. The Bye-Laws provide for a Board of 13 directors and empower
the Board to appoint persons to fill any vacancies.

Directors of Holdings are currently not paid to serve on the Board. Non-
management directors of Holdings receive reimbursement of their reasonable
costs for attendance at each meeting of the Board and each meeting of a
committee of the Board.

The Board has established five standing committees: Underwriting/Actuarial,
Nominating, Investment, Audit and Compensation. The Underwriting/Actuarial
Committee establishes guidelines for the Company's underwriters and actuaries
and periodically reviews underwriting decisions. The Nominating Committee
reviews candidates for the Board and makes recommendations to shareholders.
The Investment Committee approves guidelines that provide standards to ensure
portfolio liquidity and safety, approves investment managers and custodians
for portfolio assets and recommends asset allocations to the Board. The Audit
Committee reviews the adequacy and effectiveness of the external auditors and
their audit report. The Compensation Committee has responsibility for
determining executive compensation and administers the Company's stock option
and stock purchase plans.

49
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth, in summary form, the compensation earned by
each of the Company's executive officers during the years ended September 30,
1995 and 1996:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ------------
SECURITIES
NAME AND PRINCIPAL FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
------------------ ------ -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Victor H. Blake......... 1995 $262,500(1) $ 90,421 $134,785(2) $ 22,695(3)
Chief Executive Officer 1996 529,038 525,000 118,778(2) 85,218 852,308(4)
and President
Guy D. Hengesbaugh(5)... 1995 $170,000 $ 45,000 $ 71,783(6) $ 5,950(7)
Executive Vice
President and 1996 200,000 100,000 104,756(6) 45,000 7,788(7)
Chief Underwriting
Officer
Andrew Cook(8).......... 1995 $ 97,333 $ 19,000 $ 30,835(9) $ 7,740(10)
Chief Financial Officer 1996 161,231 75,000 76,077(9) 33,000 13,701(11)
and Treasurer
</TABLE>
- --------
(1) The compensation indicated relates to Mr. Blake's part-time service. See
"Management--Employment Agreements."
(2) Includes housing expenses of $123,541 for fiscal 1995 and $116,346 for
fiscal 1996.
(3) Consists of amounts paid for life insurance covering Mr. Blake.
(4) Consists of $489,061 paid in connection with certain pension benefits for
services rendered in fiscal 1996 and prior periods, $249,863 paid in
connection with certain pension benefits for future services, $88,096
paid for monthly pension contributions, $22,032 paid for life insurance
covering Mr. Blake and $3,256 paid for permanent health insurance
covering Mr. Blake.
(5) The compensation indicated was paid by CNA Bermuda pursuant to the
Underwriting Services Agreement. See "Certain Transactions--Underwriting
Services Agreement."
(6) Includes housing expenses and overseas allowances of $66,106 for fiscal
1995 and $97,607 for fiscal 1996.
(7) Consists of contributions to a 401(k) Plan.
(8) The compensation indicated for fiscal 1995 was paid by Aon Bermuda
pursuant to the Administrative Services Agreement. See "Certain
Transactions--Underwriting Services Agreement."
(9) Includes housing expenses of $28,800 for fiscal 1995 and $60,462 for
fiscal 1996.
(10) Consists of $5,740 paid in connection with a noncontributory pension plan
and $2,000 paid in connection with a Company savings plan.
(11) Consists of $13,701 paid in connection with a noncontributory pension
plan.

50
<PAGE>

The following table sets forth information concerning stock options granted
to each of the Company's executive officers during the year ended September
30, 1996:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK PRICE
UNDERLYING OPTIONS GRANTED APPRECIATION FOR OPTION TERM (2)
OPTIONS TO EMPLOYEES IN EXERCISE OR EXPIRATION --------------------------------------
NAME GRANTED (1) FISCAL YEAR BASE PRICE DATE 5% 10%
- ---- ----------- --------------- ----------- ------------ ------------------ -------------------
<S> <C> <C> <C> <C> <C> <C>
Victor H. Blake......... 85,218 52.2% $18.75 November 27, $ 1,507,937 $ 3,115,753
2005
Guy D. Hengesbaugh...... 45,000 27.6% $18.75 November 27, $ 796,277 $ 1,645,297
2005
Andrew Cook............. 33,000 20.2% $18.75 November 27, $ 583,937 $ 1,206,551
2005
</TABLE>
- --------
(1) The options vest ratably in five annual installments over five years from
the date of grant.
(2) The actual value, if any, an executive officer may realize will depend on
the future performance of the Common Shares and the excess of the stock
price over the exercise price on the date the option is exercised, so that
there is no assurance the value realized by an executive officer will be
at or near the value reflected in the above table. These amounts represent
certain assumed rates of appreciation only and may not be realized by the
executive officer.

The following table sets forth information for each of the Company's
executive officers with regard to the number of Common Shares underlying
unexercised stock options and SARs, and the value of such stock options and
SARs, in each case at September 30, 1996. No stock options or SARs have been
exercised by any of the executive officers.

AGGREGATE OPTION/SAR EXERCISES IN FISCAL YEAR 1996 AND 1996 FISCAL YEAR-END
OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SEPTEMBER 30, 1996 AT SEPTEMBER 30, 1996
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------------- -------------------------
<S> <C> <C>
Victor H. Blake(1)... 0/426,090 0/$4,802,034
Guy D. Hengesbaugh... 0/ 45,000 0/$ 208,350
Andrew Cook.......... 0/ 33,000 0/$ 152,790
</TABLE>
- --------
(1) Of the 426,090 securities underlying Mr. Blake's options/SARs, 85,218
pertain to stock options and 340,872 pertain to SARs. These are valued at
$394,559 and $4,407,475, respectively.

EMPLOYMENT AGREEMENTS

The Company has entered into an employment agreement, as amended, with
Victor H. Blake, pursuant to which he serves as Chairman of the Board of
Directors, President and Chief Executive Officer of the Company. The agreement
provides for an annual base salary, which is currently $575,000. In addition,
Mr. Blake is entitled to an annual non-discretionary bonus based on the
amount, if any, by which the Company's return on equity for that year exceeds
15% per annum, subject to a maximum of $855,000 (which he would receive at a
35% rate of return). In addition, Mr. Blake has been awarded 340,872 stock
appreciation rights ("SARs") with respect to Common Shares. A portion of these
SARs may become exercisable on January 1 of each of 1997, 1998 or 1999 based
upon the amount, if any, by which the Company's compound annual rate of return
exceeds 18% per annum for the entire measurement period. Once exercisable,
each SAR may be exercised on or before March 30, 2004 or, if earlier, two
years after Mr. Blake's termination of employment, for an amount equal to the
fair market

51
<PAGE>

value of a Common Share, minus an amount equal to $16.67 minus dividend
adjustments. The current exercise price is $10.45. The Company's dividend
policy will likely result in substantial downward adjustments to this exercise
price. See "Dividend Policy." Alternatively, at the Company's sole discretion,
the SARs will entitle Mr. Blake to either (i) the number of special non-voting
shares, par value U.S. $1.00 per share, which were issued by LaSalle Re in
connection with the formation and capitalization of LaSalle Re (the "Special
Non-Voting Shares") equal to the aggregate value of the SARs divided by the
fair market value of a Special Non-Voting Share at the exercise date, or (ii)
upon payment of the base value for each SAR, the number of Special Non-Voting
Shares equal to the number of SARs exercised. The SARs may also become
exercisable upon the occurrence of an "extraordinary transaction" involving a
change in control of the Company. The agreement also provides Mr. Blake with
certain benefits, including certain disability, pension and life insurance
benefits, use of an automobile, certain club memberships and reimbursement of
expenses incurred on a basis appropriate to an individual holding the position
of chairman of a company such as the Company. In addition, the Company has
loaned $695,000 to Mr. Blake in order to finance the purchase of a condominium
in Bermuda. See "Certain Transactions--Loan to Executive Officer." The
agreement expires on March 31, 2000, but provides for automatic annual one-
year renewals thereafter unless notice of non-renewal is provided by either
party at least 18 months prior to the expiration of the agreement.

Mr. Blake has agreed that, during the Non-Competition Period (as defined
below), he will not directly or indirectly (i) provide goods or perform
services for the benefit of any client, except with respect to goods provided
or services performed for the benefit of the Company or CNA by the Company
during the period in which Mr. Blake is employed by the Company, or (ii)
solicit, attempt to solicit, or endeavor to procure engagement, for himself or
for any business, the opportunity to provide such goods or perform services
for any person (a) to whom the Company has provided such goods or performed
such services for the benefit of the Company or CNA in the 12-month period
prior to Mr. Blake's termination date or (b) to whom, during the six-month
period prior to Mr. Blake's termination date, the Company has devoted material
efforts to obtaining as a purchaser of its goods or services. Mr. Blake has
also agreed that, during the Non-Competition Period, he will not directly or
indirectly, divert or attempt to divert any business from the Company. For
purposes of the agreement, the "Non-Competition Period" means (i) if Mr.
Blake's employment is terminated because of his permanent disability, for
cause or if Mr. Blake resigns, the period commencing on the date Mr. Blake's
employment is terminated and continuing for 24 months following such
termination date and (ii) if Mr. Blake terminates his employment following a
breach of the agreement by the Company or if Mr. Blake's employment is
otherwise terminated by the Company, the period commencing on the date Mr.
Blake's employment is terminated and continuing until the earlier to occur of
the last day of the agreement term or 24 months following the termination
date; provided that, for purposes of clause (ii), the Company may extend the
Non-Competition Period beyond the end of the agreement term to a specified
date not later than 24 months following the termination date upon continuation
of Mr. Blake's then applicable base salary.

The Company has entered into an employment agreement with Andrew Cook
pursuant to which he serves as Chief Financial Officer and Treasurer of both
Holdings and LaSalle Re. The agreement is for a three-year term and provides
for an annual base salary, which is currently $185,000. In addition, Mr. Cook
is entitled to an annual partially discretionary bonus based in part on the
Company's return on equity, subject to a maximum of $185,000. The agreement
provides Mr. Cook with certain benefits, including disability and pension
benefits, use of an automobile, club membership, housing and living allowance
and reimbursement of reasonable business expenses. The agreement also includes
a non-competition clause that is similar to the non-competition clause
contained in Mr. Blake's employment agreement and described above.

LONG-TERM INCENTIVE PLAN

Holdings has adopted a Long-Term Incentive Plan (the "Incentive Plan"). The
Incentive Plan permits the award of stock options, SARs, restricted stock,
performance stock and performance units, and permits the establishment of one
or more stock purchase programs. The number of Common Shares that may be
issued with respect to awards under the Incentive Plan (including share
purchase and all other types of awards) may not

52
<PAGE>

exceed 340,938 shares in the aggregate. The Incentive Plan is administered by
the Compensation Committee of the Board of Holdings. The Compensation
Committee, in its discretion, may make awards to (and establish stock purchase
programs for the benefit of) employees of Holdings and its subsidiaries, and
other persons providing services to those companies. The Incentive Plan
permits the grant of options to purchase Common Shares that are either
incentive stock options that satisfy the requirements of Section 422 of the
Code, or non-qualified options that are not intended to satisfy the
requirements of Section 422 of the Code. SARs may be granted in tandem or
otherwise in connection with options, or may be granted as free-standing
awards. Under the terms of the Incentive Plan, options and SARs will have an
exercise price that is not less than the par value of Common Shares at the
time of grant, and may be exercised for a period of not more than ten years
following the grant date. If the holder of an option or SAR ceases to be an
employee of Holdings and its subsidiaries, and otherwise ceases to provide
services to Holdings and its subsidiaries, the holder (or his estate) will
have not more than three months to exercise any vested options and SARs,
unless the holder's termination was by reason of retirement, death or
disability. In the case of retirement, the holder will have not more than
three years to exercise any options and SARs, and in the case of termination
because of death or disability, the holder will have not more than one year to
exercise any options and SARs. The Incentive Plan permits the grant of
restricted stock, the vesting of which is subject to such conditions as may be
established by the Compensation Committee. The Incentive Plan permits the
grant of performance stock, the distribution of which is subject to
achievement of such performance objectives as may be established by the
Compensation Committee. The Incentive Plan permits the grant of performance
units, which entitle the holder to receive value for the units at the end of a
performance period to the extent provided under the award. The number of units
earned, and value received for them, will be contingent on the degree to which
the performance measures established at the time of the initial award are met.
The Incentive Plan permits the establishment of stock purchase programs by the
Compensation Committee. Such programs may permit discount purchases of Common
Shares, and may provide that Holdings will award Common Shares matching the
Common Shares purchased by the participants (but at a matching rate that is
not greater than one matching share for each share purchased by the
participant, and matching share awards may not be made in conjunction with
discount purchases of stock). Any shares subject to an award under the
Incentive Plan that for any reason expires or is terminated without issuance
of shares shall again be available under the Incentive Plan.

EMPLOYEE STOCK PURCHASE PLAN

Holdings has adopted the LaSalle Re Holdings Limited Employee Stock Purchase
Plan (the "Stock Purchase Plan"). Under the Stock Purchase Plan, Holdings is
authorized to sell up to 150,000 Common Shares at a discount to eligible
employees of Holdings and its subsidiaries, and other persons providing
services to those companies. Offers and sales of Common Shares under the Stock
Purchase Plan will be made only in accordance with the provisions of
Regulation S under the Securities Act. The Stock Purchase Plan is administered
by the Compensation Committee. The Compensation Committee establishes
subscriptions periods during which eligible employees may authorize the
Company to make payroll deductions equal to 2%, 5%, 10%, 15%, or 20% of the
individual's salary otherwise payable during such subscription period up to
$25,000 in any calendar year ($12,500 in the period beginning July 1, 1996 and
ending December 31, 1996). On the third business day following the last
business day of such subscription period, a participant will be deemed to
purchase the number of whole Common Shares as his or her accumulated payroll
deductions for the period will purchase. The purchase price is 85% of the fair
market value of the Common Shares on the last business day of such period. Any
compensation costs resulting from the issuance of shares under the Stock
Purchase Plan will be borne by Aon and CNA. If a participant ceases to be an
eligible employee for any reason during a subscription period, all payroll
deductions accumulated during such period that have not been used to purchase
Common Shares will be paid to such participant without interest. Common Shares
sold to participants may not be sold by a participant for a period of two
years after the date on which such shares were purchased by a participant.
However, if the Compensation Committee determines that a sale by a participant
prior to the end of the two-year period is on account of hardship, as
determined by the Compensation Committee in accordance with the terms of the
Stock Purchase Plan, the participant may sell to the Company and the Company
shall purchase from the participant prior to the end of the two year period,
the Common Shares which have been purchased by the participant. The

53
<PAGE>

sale price of the Common Shares sold to the Company will be the lesser of the
fair market value of such Common Shares determined as of the date of such sale
or the price which the participant paid for such Common Shares when the
participant purchased them. None of the executive officers of the Company are
entitled to participate in the Stock Purchase Plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board consists of Messrs. Pollack,
Rackley, Haviv, Africk and Schoen. No member of the Compensation Committee is
or was an officer or employee of the Company or served as a director or a
member of the compensation committee of any other company, one of whose
executive officers served as a member of the Board or a member of the
Compensation Committee of the Board.

54
<PAGE>

CERTAIN TRANSACTIONS

FORMATION AND RECAPITALIZATION

In connection with the formation and capitalization of LaSalle Re, LaSalle
Re issued options to purchase 2,336,130 Special Non-Voting Shares to Founding
Shareholders who purchased 1,500,000 or more common shares, par value $0.01
per share, of LaSalle Re (the "LaSalle Re Common Shares"), or Special Non-
Voting Shares, including options to purchase 909,000 Special Non-Voting
Shares, 454,500 Special Non-Voting Shares and 454,500 Special Non-Voting
Shares to Aon, CNA and Corporate Partners, respectively. The options are all
currently exercisable. The original exercise price of the options was $16.67,
which was equal to the fair value of LaSalle Re Common Shares at the grant
date, minus dividend adjustments. The current exercise price is $10.45. The
Company's dividend policy will likely result in substantial downward
adjustments to this exercise price. See "Dividend Policy." Because the options
were granted to certain of the Founding Shareholders and their affiliates as
an inducement to purchase stock in LaSalle Re, no compensation expense has
been recorded by LaSalle Re in connection with the options.

In connection with the formation of LaSalle Re, organizational expenses of
$600,000 were paid by LaSalle Re on behalf of Corporate Partners in respect of
legal and other organizational costs, and placement fees of $5,681,250 were
paid to Lazard Freres & Co. LLC. Lester Pollack, a director of Holdings, is
Senior Managing Director of Corporate Advisors, L.P. ("Corporate Advisors")
and a Managing Director of Lazard Freres & Co. LLC. Jonathan H. Kagan, a
director of Holdings and of LaSalle Re, is a Managing Director of Corporate
Advisors and a Managing Director of Lazard Freres & Co. LLC. A wholly owned
subsidiary of Lazard Freres & Co. LLC is the sole general partner of Corporate
Advisors, which in turn is the sole general partner of Corporate Partners,
L.P. and Corporate Offshore Partners, L.P. Corporate Advisors is also an
investment manager for The State Board Administration of Florida, which
purchased 372,198 LaSalle Re Common Shares and Special Non-Voting Shares
pursuant to its investment management agreement with Corporate Advisors.
Certain entities controlled by Lazard Freres & Co. LLC also own limited
partnership interests in Corporate Partners, L.P. and Corporate Advisors.

Immediately prior to the completion of the Company's initial public
offering, an exchange offer (the "Exchange Offer") was consummated, pursuant
to which (i) the Founding Shareholders exchanged all shares of capital stock
of LaSalle Re for Common Shares or, in certain circumstances, Exchangeable
Non-Voting Shares, (ii) those Founding Shareholders who are U.S. Persons and
who held options to purchase Special Non-Voting Shares exchanged their options
for options to purchase Exchangeable Non-Voting Shares and (iii) those
Founding Shareholders who are not U.S. Persons and who held options to
purchase Special Non-Voting Shares exchanged their options for options to
purchase Common Shares. Pursuant to the Exchange Offer, Aon, CNA, Corporate
Partners, affiliates of Blackstone (the "Blackstone Entities"), Hyatt
Minneapolis Corporation ("Hyatt") and affiliates of Thomas H. Lee Company
("Thomas H. Lee Company") exchanged an aggregate of 8,329,290 LaSalle Re
Common Shares and Special Non-Voting Shares for 8,329,290 Exchangeable Non-
Voting Shares of LaSalle Re. The Exchangeable Non-Voting Shares are
exchangeable for Common Shares on a one-for-one basis, unless the Board
determines that such exchange may cause actual or potential adverse tax
consequences to the Company or any shareholder, pursuant to a Conversion
Agreement among Holdings, LaSalle Re, and all holders of Exchangeable Non-
Voting Shares of LaSalle Re or options to acquire such shares (the "Conversion
Agreement"). Immediately following the completion of the Company's initial
public offering, LaSalle Re redeemed an aggregate of 1,392,000 LaSalle Re
Common Shares and Special Non-Voting Shares from Aon, CNA, Corporate Partners,
the Blackstone Entities, Hyatt and Thomas H. Lee Company at a price per share
that was the equivalent of the initial public offering price per Common Share
(less the underwriting discount and commissions).

UNDERWRITING SERVICES AGREEMENT

Pursuant to the Underwriting Services Agreement, CNA Bermuda provides
underwriting services and underwrites all classes of insurance and reinsurance
as agent for LaSalle Re. The Underwriting Services

55
<PAGE>

Agreement expires on December 31, 1998 with a two year extension at the option
of the Company. Until December 31, 1995, the fees for the underwriting
services were as follows: (i) 2% for the first $150 million of gross written
and collected premiums per fiscal year and 1.5% thereafter and (ii) for
periods during which the Company's loss ratio since inception of LaSalle Re
was 57% or less, subject to certain conditions, an underwriting profit
commission of 2.5% of the aggregate net underwriting profits of LaSalle Re.
Effective January 1, 1996, these fees are (i) 1.5% of gross written and
collected premiums per fiscal year and (ii) subject to the same loss ratio
test and conditions, an underwriting profit commission of 4.0% of the
aggregate net underwriting profits of LaSalle Re. The fees for underwriting
services were renegotiated in September 1995 by and approved by a vote of
directors of LaSalle Re who are not affiliated with either CNA or Aon. The
performance of CNA Bermuda and the fees paid are periodically reviewed by the
Board of Directors of LaSalle Re.

LaSalle Re accrued underwriting service fees to CNA Services of $3,081,245,
$3,411,321 and $1,465,283 for the years ended September 30, 1996 and 1995 and
the period from October 26, 1993 to September 30, 1994. In addition, the
Company incurred profit commissions to CNA Bermuda of $4,139,573, $2,186,071
and $nil for the years ended September 30, 1996 and 1995 and the period from
October 26, 1993 to September 30, 1994.

ADMINISTRATIVE SERVICES AGREEMENT

Pursuant to the Administrative Services Agreement, Aon Bermuda provides
LaSalle Re with actuarial and financial reporting, accounting, office space
and other administrative services. The Administrative Services Agreement
expires on December 31, 1998 with a two year extension at the option of the
Company. The fees for administrative services are: (i) $547,945 for 1993 (pro
rata basis), (ii) $3,000,000 for 1994, (iii) $5,000,000 for 1995 and (iv)
$7,000,000 for 1996. For periods beginning January 1, 1997, the fees for
administrative services, and for the claims administrator services currently
performed by IRISC, will be $3,300,000 per year, plus a commission of 2.75% of
the aggregate net underwriting profits of LaSalle Re, for periods during which
the Company's loss ratio is 57% or less, subject to the same conditions
applicable in the Underwriting Services Agreement. The fees for administrative
services were negotiated in September 1995 by and approved by a vote of
directors who are not affiliated with either CNA or Aon. The performance of
Aon Bermuda and the fees paid are periodically reviewed by the Board of
Directors of LaSalle Re.

INVESTMENT MANAGEMENT AGREEMENT

Pursuant to the Investment Management Agreement, Aon Advisors provides
LaSalle Re with investment management services in accordance with the
investment guidelines set by the Board of Directors of LaSalle Re. The
Investment Management Agreement expires on September 30, 1998 with a one year
extension at the option of the Company. The fees for the investment management
services are as follows: (i) 35 basis points for the first $100 million of
funds under management, (ii) 25 basis points for the next $100 million of
funds under management and (iii) 15 basis points for all funds managed in
excess of $200 million. The fees for investment management services were
reviewed in September 1995 by and reapproved by a vote of directors of LaSalle
Re who are not affiliated with either CNA or Aon. The performance of Aon
Advisors and the fees paid are periodically reviewed by the Board of Directors
of LaSalle Re. LaSalle Re paid Aon Advisors investment management fees of
$1,027,685, $986,774 and $752,348 for the years ended September 30, 1996 and
1995 and the period from October 26, 1993 to September 30, 1994.

CLAIMS AGREEMENT

Pursuant to the Claims Agreement, IRISC serves as claims administrator for
LaSalle Re. After a review in September 1995 by directors who are not
affiliated with CNA or Aon, the Company notified IRISC that it would not renew
the Claims Agreement. As a result, the Claims Agreement will terminate on
December 31, 1996. The services provided under the Claims Agreement will be
provided by Aon Bermuda for no additional charge under the Administrative
Services Agreement after December 31, 1996. The minimum fees under the Claims
Agreement are as follows: (i) $nil for 1993, (ii) $50,000 for 1994, (iii)
$52,750 for 1995 and (iv) $55,651 for 1996. The Claims Agreement also provides
for additional fees calculated on an hourly basis if services provided exceed
450 hours in a given year.

SHAREHOLDERS AGREEMENT

Pursuant to the Shareholders Agreement, certain holders of Common Shares
have the right to demand that Holdings register such shares with the
Commission for an underwritten or at the market public offering. Such

56
<PAGE>

shareholders also have the right to have their Common Shares registered in
connection with any registration of securities by Holdings. Such demand right
may be exercised at any time, subject to limitations. In connection with the
first four such registrations, Holdings is required to bear all registration
and selling expenses, other than underwriting fees and commissions. Pursuant
to the Shareholders Agreement, Holdings also is (i) prevented from engaging in
certain activities without the consent of a majority of the holders of
Exchangeable Non-Voting Shares, (ii) prevented from incurring certain
indebtedness without the consent of a majority of the holders of Common Shares
who are parties to the Shareholders Agreement and (iii) prevented from
changing the terms of the Exchangeable Non-Voting Shares (other than as
contemplated by the Conversion Agreement) without the consent of a majority of
both of (A) the outstanding Exchangeable Non-Voting Shares and (B) the Common
Shares held by certain Founding Shareholders. In addition, upon a liquidation
of LaSalle Re, holders of Exchangeable Non-Voting Shares will be contractually
obligated to the parties to the Shareholders Agreement to transfer to holders
of Common Shares such amount so as to ensure that the proceeds of the
liquidation will be shared on a pro rata basis among the holders of Common
Shares and the Exchangeable Non-Voting Shares. Additionally, LaSalle Re may
not knowingly sell reinsurance so as to generate "related person insurance
income" of 20% or more of its gross insurance income without approval of 85%
of the Board of Directors of LaSalle Re. If LaSalle Re knowingly sells
reinsurance so as to generate "related person insurance income" of 20% or more
of its gross insurance income, then any such shareholder may exercise its
registration rights regardless of the number of Common Shares it holds or, at
the option of Holdings, Holdings may repurchase such shareholder's shares for
their fair market value.

EXCESS OWNERSHIP AGREEMENT

Pursuant to an Excess Ownership Agreement dated November 27, 1995 among
LaSalle Re, Holdings and certain Founding Shareholders (the "Excess Ownership
Agreement"), each such shareholder will at the request of Holdings (i) provide
certain information on its ownership to Holdings, (ii) notify the Company of
any change in its ownership and (iii) inquire of each new partner or new 10%
owner of the shareholder if such party owns shares in the Company or any
ownership interest in any shareholder of the Company. Additionally, under
certain circumstances such Founding Shareholders will agree to dispose of all
or part of their respective shares of Holdings or to exchange them for
Exchangeable Non-Voting Shares of LaSalle Re.

REINSURANCE TRANSACTIONS WITH AON AND CNA

In the years ended September 1996 and 1995 and the period from October 26,
1993 to September 30, 1994, the Company assumed premiums totalling
approximately $24,045,470, $28,835,485 and $24,186,000, respectively, from a
ceding company related to CNA. Absent CNA's relationship with the Company,
such premiums may not have been written by the Company. In addition, during
the same periods the Company wrote premiums totalling approximately
$23,577,000, $22,057,000 and $14,163,000, respectively, through brokers
related to Aon. During the same periods, brokerage fees incurred in respect of
this business were approximately $2,357,700, $2,205,700 and $1,416,300,
respectively. The terms of these reinsurance transactions were negotiated
between the parties and the Company believes that such terms were at market
rates.

LOAN TO EXECUTIVE OFFICER

In accordance with Mr. Blake's employment agreement, the Company loaned Mr.
Blake $695,000 to purchase a condominium in Bermuda. See "Management--
Employment Agreements." The loan is secured by a mortgage on the condominium.
The Company has agreed to reimburse Mr. Blake for interest paid on the loan.
The loan is due at the time the condominium is sold or otherwise transferred
by Mr. Blake. Subject to Mr. Blake's right to purchase the condominium upon
termination of his employment, the sale of the condominium is required within
a reasonable time following termination of his employment. If Mr. Blake elects
to purchase the condominium upon termination of his employment, the principal
of, and any unpaid interest on, the loan will be due on the 50th day after the
termination date. If, as of the termination date, the fair market value of the
condominium has increased over the purchase price, Mr. Blake shall also be
required to pay the amount of the increase to the Company. If the fair market
value of the condominium has decreased to below the purchase price, the amount
due from Mr. Blake shall be reduced by the amount of the decrease.

57
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Shares and Exchangeable Non-Voting Shares by (i) each
shareholder who is known by the Company to beneficially own more than 5% of
the outstanding Common Shares, (ii) each director, (iii) each executive
officer of the Company, (iv) all directors and executive officers as a group
and (v) each Selling Shareholder. Amounts set forth under the heading "Common
Shares to be Sold in the Offerings" are based on indications of interest
received by the Company of the number, if any, of Exchangeable Non-Voting
Shares that each Selling Shareholder wishes to convert into Common Shares and
the number of Common Shares that each Selling Shareholder wishes to sell. As a
result, those amounts and other amounts such as those set forth under the
heading "Ownership After Offerings" are subject to change. Unless otherwise
indicated, each such person or individual has sole voting and investment power
with respect to all such Common Shares. Amounts of less than 1% are indicated
by an asterisk.

58
<PAGE>

<TABLE>
<CAPTION>
OWNERSHIP PRIOR TO OFFERINGS OWNERSHIP AFTER OFFERINGS
------------------------------ ------------------------------
PERCENT OF PERCENT OF
TOTAL COMMON COMMON TOTAL COMMON
PERCENT SHARES AND SHARES TO PERCENT SHARES AND
NUMBER OF OF EXCHANGEABLE BE SOLD NUMBER OF OF EXCHANGEABLE
COMMON COMMON NON-VOTING IN THE COMMON COMMON NON-VOTING
NAME OF BENEFICIAL OWNER SHARES SHARES SHARES OFFERINGS SHARES SHARES SHARES
- ------------------------ --------- ------- ------------ --------- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Strome Group(9)......... 1,073,959 7.46% 4.73% 266,064 807,895 4.90% 3.55%
100 Wilshire Boulevard
15th Floor
Santa Monica, CA 90401
Bermuda Investors 96,656 * * 23,945 72,711 * *
Limited................
Brinson Venture Capital. 150,000 1.04 * 34,503 115,497 * *
Engineers Joint Pension 12,888 * * 3,193 9,695 * *
Fund...................
Generali Worldwide
Insurance Company
Limited................ 120,000 * * 27,602 92,398 * *
Lamb Partners........... 42,957 * * 10,641 32,316 * *
Leon Black Trusts....... 42,957 * * 10,641 32,316 * *
Victor H. Blake......... 22,010 * * 0 22,010 * *
William J. Adamson, Jr.. 1,000 * * 0 1,000 -- --
Andrew Africk........... 0 -- -- 0 0 -- --
Ivan P. Berk............ 300 * * 0 300 * *
Joseph Haviv............ 0 -- -- 0 0 -- --
Jonathan H. Kagan(3).... 911,917 6.33 12.84 0 911,917 5.53 10.04
Donald P. Koziol, Jr.... 0 -- -- 0 0 -- --
Lester Pollack(3)....... 911,917 6.33 12.84 0 911,917 5.53 10.04
Peter J. Rackley........ 0 -- -- 0 0 -- --
Scott A. Schoen(8)...... 493,847 3.43 4.59 0 493,847 3.00 3.59
Harvey G. Simons........ 0 -- -- 0 0 -- --
David A. Stockman(5).... 403,569 2.80 9.17 0 403,569 2.45 7.17
Paul J. Zepf(10)........ 912,417 6.34 12.84 0 912,417 5.54 10.05
Guy D. Hengesbaugh...... 1,000 * * 0 1,000 * *
Andrew Cook............. 1,000 * * 0 1,000 * *
All directors and
executive officers as a
group (15 persons)..... 1,835,143 12.75 26.72 0 1,835,143 11.14 20.92
</TABLE>
- --------
* Less than 1%.
(1) Of these shares, 50% are owned by each of Combined Insurance Company of
America and Virginia Surety Company, Inc., which are the registered
shareholders of the Common Shares and wholly owned subsidiaries of Aon.
Excludes options to purchase 909,000 Exchangeable Non-Voting Shares.
(2) All of these shares are owned by Continental Casualty Company, the
registered shareholder of the Common Shares and a wholly owned subsidiary
of CNA Financial Corporation. At December 31, 1995, approximately 84% of
the outstanding voting securities of CNA Financial Corporation were owned
by Loews Corporation. Excludes options to purchase 454,500 Exchangeable
Non-Voting Shares.
(3) Of these shares, 85%, 6% and 9% are owned by Corporate Partners, L.P.,
Corporate Offshore Partners, L.P. and the State Board Administration of
Florida ("SBA"), respectively, which are the registered shareholders of
the Common Shares. Corporate Advisors, as the general partner of Corporate
Partners, L.P. and Corporate Offshore Partners, L.P., has sole voting and
investment power as to the shares held by them. Corporate Advisors serves
as investment manager over a certain investment management account for SBA

59
<PAGE>

and has sole voting and dispositive power with respect to the Common Shares
held by SBA. All shares listed in the table as being beneficially owned by
Messrs. Pollack and Kagan are beneficially owned by Corporate Advisors. Mr.
Pollack may be deemed to share voting and investment power over such shares
as the Chairman and Treasurer and as a Director of LFCP Corp. and Senior
Managing Director of Corporate Advisors. Mr. Kagan may be deemed to share
voting and investment power over such shares as the President of LFCP Corp.
and Managing Director of Corporate Advisors. LFCP Corp. is the sole general
partner of Corporate Advisors and a wholly owned subsidiary of Lazard
Freres & Co. llc. Mr. Pollack and Mr. Kagan are both Managing Directors of
Lazard Freres & Co. llc. Each of Messrs. Pollack and Kagan disclaims
beneficial ownership of such shares. Excludes options to purchase 454,500
Exchangeable Non-Voting Shares.

(4) Apollo LS Holdings LDC is a subsidiary of AIF II, L.P. Apollo Capital
Management, Inc. is the general partner of the managing general partner of
AIF II, L.P. Leon E. Black and John J. Hannan are the directors of Apollo
Capital Management, Inc. Each of Messrs. Black and Hannan disclaims
beneficial ownership of such Common Shares. Excludes options to purchase
68,175 Common Shares.

(5) Of these shares, 71%, 22% and 7% are owned by Blackstone LR Capital
Partners L.P., Blackstone LR Offshore Capital Partners, L.P., and
Blackstone Family Investment Partnership (Cayman) L.P., respectively,
which are the registered shareholders of the Common Shares. Mr. Stockman
has an interest in the general partner of each of the Blackstone Entities
and may be deemed to share voting and investment power with respect to all
of such Common Shares. The general partner of the general partner of the
Blackstone Entities is owned and controlled by Peter G. Peterson and
Stephen A. Schwarzman, each of whom have voting and investment power over
the Common Shares held or controlled by the Blackstone Entities. Each of
Messrs. Peterson, Schwarzman and Stockman disclaims beneficial ownership
of such Common Shares. Excludes options to purchase 136,350 Exchangeable
Non-Voting Shares.

(6) FIMA Finance Management Inc. (BVI) is a wholly-owned subsidiary of EXOR
Group S.A., a publicly traded corporation incorporated in Luxembourg.
Excludes options to purchase 68,175 Common Shares.

(7) Perry Corp. is the general partner of Perry Partners, L.P. Excludes
options to purchase 40,087 Exchangeable Non-Voting Shares.

(8) Of these shares, 82% and 18% are owned by Thomas H. Lee Equity Partners
and THL-CCI Investors Limited Partnership, respectively, which are the
registered shareholders of the Common Shares. Mr. Schoen is an employee of
Thomas H. Lee Company, which is an affiliate of Thomas H. Lee Equity
Partners and THL-CCI Investors Limited Partnership and may be deemed to
share voting and investment power with respect to all of such Common
Shares. Mr. Schoen disclaims beneficial ownership of such Common Shares.
Excludes options to purchase 68,175 Exchangeable Non-Voting Shares.

(9) Of these shares, 60% and 40% are owned by Strome Offshore Limited and
Strome Partners, L.P., respectively. SSCO, Inc. is the general partner of
the general partner of Strome Partners, L.P. and the general partner of
the investment advisor to Strome Offshore Limited. SSCO, Inc. is
controlled by Mark Strome. Mr. Strome disclaims beneficial ownership of
such Common Shares. Excludes options to purchase 68,175 Exchangeable Non-
Voting Shares.

(10) Of these 912,417 shares, 911,917 are owned by Corporate Partners, L.P.,
Corporate Offshore Partners, L.P. and SBA. Corporate Advisors, as the
general partner of Corporate Partners, L.P. and Corporate Offshore
Partners, L.P., has sole voting and investment power as to the shares
held by them. Corporate Advisors serves as investment manager over a
certain investment management account for SBA and has sole voting and
dispositive power with respect to the Common Shares held by SBA. Mr. Zepf
may be deemed to share voting and investment power over such shares as a
Principal of Corporate Advisors. Mr. Zepf disclaims beneficial ownership
of such shares. Excludes options to purchase 454,500 Exchangeable Non-
Voting Shares.

60
<PAGE>

DESCRIPTION OF CAPITAL STOCK

CAPITAL STOCK OF HOLDINGS

The following description of the capital stock of Holdings summarizes
certain provisions of the Memorandum of Association of Holdings and the Bye-
Laws. Such summaries do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Memorandum of Association of Holdings and the Bye-Laws. Copies of the
Memorandum of Association of Holdings and the Bye-Laws are filed as an exhibit
to the Registration Statement of which this Prospectus is a part.

General. The authorized share capital of Holdings consists of: (i)
100,000,000 Common Shares, of which 16,480,344 Common Shares will be
outstanding upon consummation of the Offerings and (ii) preferred shares, par
value $1.00 per share, none of which are outstanding.

Common Shares. Holders of Common Shares are entitled to one vote for each
Common Share held on all matters submitted to a vote on a poll of such holders
and do not have any cumulative voting rights. Most matters to be approved by
holders of Common Shares require approval by a simple majority vote. The
holders of 75% of the Common Shares present in person or by proxy at a meeting
and voting thereon must generally approve a merger or amalgamation with
another company. Holders of Common Shares have no pre-emptive, redemption,
conversion or sinking fund rights. In the event of a liquidation, dissolution
or winding-up of Holdings, the holders of Common Shares are entitled to share
equally and ratably in the assets of Holdings, if any, remaining after the
payment of all debts and liabilities of Holdings and the liquidation
preference of any outstanding Preferred Shares. Upon completion of the
Offerings, all outstanding Common Shares will be fully paid and nonassessable.

Any transfer of Common Shares that results in a shareholder (other than a
mutual fund) beneficially holding Common Shares equaling 5% or more of the
voting power of Holdings or any shareholder holding "Controlled Shares" in
excess of 9.9% of the voting power of Holdings, in each case without the
Board's prior approval, shall not be registered in the share register of
Holdings and shall be void and of no effect. "Controlled Shares" means (i) all
shares of Holdings directly, indirectly or constructively owned by any person
within the meaning of Section 958 of the Code and (ii) all shares of Holdings
directly, indirectly or beneficially owned by such person within the meaning
of Section 13(d) of the Exchange Act (including any shares owned by a group of
persons as so defined and including any shares that would otherwise be
excluded by the provisions of Section 13(d)(6) of the Exchange Act). This
restriction is a limitation on ownership and does not preclude the exercise of
proxies by management or others. In addition, the Board has absolute
discretion to decline to register a transfer of Common Shares unless a
registration statement under the Securities Act is in effect with respect to
such Common Shares or a written opinion from counsel acceptable to the
directors is obtained to the effect that such registration is not required.
See "Risk Factors--Anti-Takeover Considerations."

Preferred Shares. Pursuant to the Bye-Laws and Bermuda law, the Board by
resolution may issue preferred shares having such number of shares,
designations, relative voting rights, dividend rates, liquidation and other
rights, preferences and limitations as may be fixed by the Board without the
approval of the shareholders of Holdings. Such powers, rights, preferences and
limitations as may be established could have the effect of discouraging an
attempt to obtain control of the Company.

Bye-Laws. The Bye-Laws provide for the corporate governance of Holdings,
including the establishment of share rights, modification of such rights,
issuance of share certificates, imposition of a lien over shares in respect of
unpaid amounts on those shares, calls on shares which are not fully paid,
forfeiture of shares, the transfer of shares, alterations to capital, the
calling and conduct of general meetings, proxies, the appointment and removal
of directors, conduct and powers of directors, the payment of dividends, the
appointment of an auditor and the winding-up of Holdings.

The Bye-Laws provide that the Board shall be divided into three classes that
are elected for staggered three-year terms. Shareholders may only remove a
director for cause prior to the expiration of such director's term at a
special meeting of shareholders at which a majority of the holders of shares
present and voting in favor of such action.

61
<PAGE>

The Bye-Laws also provide that if the Board in its absolute discretion
determines that share ownership by any shareholder may result in adverse tax,
regulatory or legal consequences to Holdings, any of its subsidiaries or any
other shareholder, then Holdings will have the option, but not the obligation,
to repurchase all or part of the shares held by such shareholder to the extent
the Board determines it is necessary or advisable to avoid such adverse or
potential adverse consequences. The price to be paid for such shares will be
the fair market value of such shares.

CAPITAL STOCK OF LASALLE RE

The following description of the capital stock of LaSalle Re summarizes
certain provisions of the Memorandum of Association and the Bye-Laws of
LaSalle Re. Such summaries do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all of the provisions of
the Memorandum of Association and the Bye-Laws of LaSalle Re.

General. The authorized share capital of LaSalle Re consists of: (i) LaSalle
Re Common Shares, of which 14,397,720 LaSalle Re Common Shares are currently
outstanding, (ii) Exchangeable Non-Voting Shares, of which 8,329,290 are
currently outstanding and (iii) preferred shares, par value $1.00 per share
(the "LaSalle Re Preferred Shares"), none of which are outstanding.

Common Shares. Holders of LaSalle Re Common Shares are entitled to one vote
per share on all matters submitted to a vote of holders of LaSalle Re Common
Shares and do not have any cumulative voting rights. Most matters to be
approved by holders of LaSalle Re Common Shares require approval by a simple
majority vote. The holders of 75% of the LaSalle Re Common Shares present in
person or by proxy at a meeting and voting thereon must generally approve a
merger or amalgamation with another company. Holders of LaSalle Re Common
Shares have no pre-emptive, redemption, conversion or sinking fund rights. In
the event of a liquidation, dissolution or winding-up of LaSalle Re, the
holders of LaSalle Re Common Shares are entitled to share equally and ratably
in the assets of LaSalle Re, if any, remaining after the payment of all debts
and liabilities of LaSalle Re and the liquidation preference of any
outstanding preferred shares of LaSalle Re. There is no restriction on the
transfer or voting power of LaSalle Re Common Shares other than (i) the
discretion of the Board of Directors of LaSalle Re to decline to register a
transfer of LaSalle Re Common Shares unless a registration statement under the
Securities Act is in effect with respect to such LaSalle Re Common Shares or a
written opinion from counsel acceptable to the directors is obtained to the
effect that such registration is not required and (ii) as otherwise restricted
under Bermuda law.

Exchangeable Non-Voting Shares. The Exchangeable Non-Voting Shares shall at
all times rank, as to the assets, dividends and in all other respects, on a
parity with LaSalle Re Common Shares, except that Exchangeable Non-Voting
Shares shall not have the right to vote on any matters except as required by
Bermuda law and except as provided in the Shareholders Agreement. The
Exchangeable Non-Voting Shares are exchangeable for Common Shares of Holdings
on a one-for-one basis, unless the Board determines that such exchange may
cause actual or potential adverse tax consequences to the Company or any
shareholder, pursuant to the Conversion Agreement. Upon a liquidation of
LaSalle Re, holders of Exchangeable Non-Voting Shares will be contractually
obligated to the parties to the Shareholders Agreement to transfer to holders
of Common Shares such amount so as to ensure that the proceeds of the
liquidation will be shared on a pro rata basis among the holders of Common
Shares and the Exchangeable Non-Voting Shares.

Preferred Shares. Pursuant to the Bye-Laws of LaSalle Re and Bermuda law,
the Board of Directors of LaSalle Re by resolution may issue preferred shares
having such number of shares, designations, relative voting rights, dividend
rates, liquidation and other rights, preferences and limitations as may be
fixed by the Board of Directors of LaSalle Re without the approval of the
shareholders of LaSalle Re. In connection with the Company's credit facility,
LaSalle Re has authorized the issuance of up to $100 million of LaSalle Re
Preferred Shares and concurrently entered into a subscription agreement dated
as of December 1, 1995 with Holdings, pursuant to which Holdings agreed to
subscribe from time to time for LaSalle Re Preferred Shares at a price of $25
per share, for a period of five years ending on December 1, 2000. Holders of
the LaSalle Re Preferred Shares are, among other things, entitled to
preferential dividend rates and distribution rights upon liquidation or
dissolution of LaSalle Re and to notice of shareholder meetings.

62
<PAGE>

TRANSFER AGENT

The Company's registrar and transfer agent for the Common Shares is First
Chicago Trust Company of New York.

DIFFERENCES IN CORPORATE LAW

The Companies Act 1981 of Bermuda (the "Act") differs in certain material
respects from laws generally applicable to United States corporations and
their shareholders. Set forth below is a summary of certain significant
provisions of the Act (including modifications adopted pursuant to the Bye-
Laws) applicable to the Company, which differ in certain respects from
provisions of Delaware corporate law. The following statements are summaries,
and do not purport to deal with all aspects of Bermuda law that may be
relevant to the Company and its shareholders.

Interested Directors. The Bye-Laws provide that any transaction entered into
by the Company in which a director has an interest is not voidable by the
Company nor can such director be liable to the Company for any profit realized
pursuant to such transaction provided the nature of the interest is disclosed
at the first opportunity at a meeting of directors, or in writing to the
directors. Under Delaware law, such transaction would not be voidable if (i)
the material facts as to such interested director's relationship or interests
are disclosed or are known to the board of directors and the board in good
faith authorizes the transaction by the affirmative vote of a majority of the
disinterested directors, (ii) such material facts are disclosed or are known
to the stockholders entitled to vote on such transaction and the transaction
is specifically approved in good faith by vote of the stockholders or (iii)
the transaction is fair as to the corporation as of the time it is authorized,
approved or ratified. Under Delaware law, such interested director could be
held liable for any transaction for which such director derived an improper
personal benefit.

Mergers and Similar Arrangements. The Company may acquire the business of
another Bermuda exempted company or a company incorporated outside Bermuda and
carry on such business when it is within the objects of its Memorandum of
Association. The Company may also amalgamate with another Bermuda company or
with a body incorporated outside Bermuda. In the case of an amalgamation, a
shareholder may apply to a Bermuda court for a proper valuation of such
shareholder's shares if such shareholder is not satisfied that fair value has
been paid for such shares. The court ordinarily would not set aside the
transaction on that ground absent evidence of fraud or bad faith. Under
Delaware law, with certain exceptions, any merger, consolidation or sale of
all or substantially all the assets of a corporation must be approved by the
board of directors and a majority of the outstanding shares entitled to vote.
Under Delaware law, a stockholder of a corporation participating in certain
major corporate transactions may, under varying circumstances, be entitled to
appraisal rights pursuant to which such stockholder may receive cash in the
amount of the fair market value of the shares held by such stockholder (as
determined by a court or by agreement of the corporation and the stockholder)
in lieu of the consideration such stockholder would otherwise receive in the
transaction. Delaware law does not provide stockholders of a corporation with
voting or appraisal rights when the corporation acquires another business
through the issuance of its stock or other consideration (i) in exchange for
the assets of the business to be acquired, (ii) in exchange for the
outstanding stock of the corporation to be acquired or (iii) in a merger of
the corporation to be acquired with a subsidiary of the acquiring corporation.

Takeovers. Bermuda law provides that where an offer is made for shares of
another company and, within four months of the offer, the holders of not less
than 90% of the shares which are the subject of the offer accept, the offeror
may by notice require the nontendering shareholders to transfer their shares
on the terms of the offer. Dissenting shareholders may apply to the court
within one month of the notice objecting to the transfer. The burden is on the
dissenting shareholders to show that the court should exercise its discretion
to enjoin the required transfer, which the court will be unlikely to do unless
there is evidence of fraud or bad faith or collusion between the offeror and
the holders of the shares who have accepted the offer as a means of unfairly
forcing out minority shareholders. Delaware law provides that a parent
corporation, by resolution of its board of directors and without any
shareholder vote, may merge with any 90% or more owned subsidiary. Upon any
such merger, dissenting stockholders of the subsidiary would have appraisal
rights.

63
<PAGE>

Shareholder's Suit. The rights of shareholders under Bermuda law are not as
extensive as the rights of shareholders under legislation or judicial
precedent in many United States jurisdictions. Class actions and derivative
actions are generally not available to shareholders under the laws of Bermuda.
However, the Bermuda courts ordinarily would be expected to follow English
case law precedent, which would permit a shareholder to commence an action in
the name of the Company to remedy a wrong done to the Company where the act
complained of is alleged to be beyond the corporate power of the Company or is
illegal or would result in the violation of its Memorandum of Association or
the Bye-Laws. Furthermore, consideration would be given by the court to acts
that are alleged to constitute a fraud against the minority shareholders or
where an act requires the approval of a greater percentage of the Company's
shareholders than actually approved it. The winning party in such an action
generally would be able to recover a portion of attorneys' fees incurred in
connection with such action. Class actions and derivative actions generally
are available to stockholders under Delaware law for, among other things,
breach of fiduciary duty, corporate waste and actions not taken in accordance
with applicable law. In such actions, the court has discretion to permit the
winning party to recover attorneys' fees incurred in connection with such
action.

Indemnification of Directors. The Company may indemnify its directors or
officers in their capacity as such in respect of any loss arising or liability
attaching to them by virtue of any rule of law in respect of any negligence,
default, breach of duty or breach of trust of which a director or officer may
be guilty in relation to the Company other than in respect of his own fraud or
dishonesty. Under Delaware law, a corporation may adopt a provision
eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for breaches of the director's duty of loyalty, for
acts or omissions not in good faith or which involve intentional misconduct or
knowing violations of law, for improper payment of dividends or for any
transaction from which the director derived an improper personal benefit.
Delaware law has provisions and limitations similar to Bermuda regarding
indemnification by a corporation of its directors or officers, except that
under Delaware law the statutory rights to indemnification may not be as
limited.

Inspection of Corporate Records. Members of the general public have the
right to inspect the public documents of the Company available at the office
of the Registrar of Companies in Bermuda, which will include the Memorandum of
Association (including its objects and powers) and any alteration to the
Memorandum of Association and documents relating to any increase or reduction
of authorized capital. The shareholders have the additional right to inspect
the Bye-Laws, minutes of general meetings and audited financial statements of
the Company, which must be presented to the annual general meeting of
shareholders. The register of shareholders of the Company is also open to
inspection by shareholders without charge, and to members of the public for a
fee. The Company is required to maintain its share register in Bermuda but may
establish a branch register outside Bermuda. The Company is required to keep
at its registered office a register of its directors and officers which is
open for inspection by members of the public without charge. Bermuda law does
not, however, provide a general right for shareholders to inspect or obtain
copies of any other corporate records. Delaware law permits any shareholder to
inspect or obtain copies of a corporation's shareholder list and its other
books and records for any purpose reasonably related to such person's interest
as a shareholder. Delaware law does not permit inspection by the public of the
register of shareholders.

SHARES ELIGIBLE FOR FUTURE SALE

No predictions can be made as to the effect, if any, that future sales of
Common Shares, or the availability of such Common Shares for future sale, will
have on the market price of the Common Shares prevailing from time to time.
Sales of substantial amounts of Common Shares in the public markets following
the Offerings, or the perception that such sales could occur, could adversely
affect prevailing market prices and the Company's ability to raise additional
equity capital at a desirable time and price.

64
<PAGE>

The Common Shares sold in the Offerings and 4,312,500 currently outstanding
Common Shares will be freely tradeable without restriction or further
registration under the Securities Act by persons other than "affiliates" of
the Company within the meaning of Rule 144 promulgated under the Securities
Act. The remaining outstanding Common Shares will be "restricted" securities
within the meaning of Rule 144 promulgated under the Securities Act and may
not be resold in the absence of registration under the Securities Act or
pursuant to an exemption from such registration.

Rule 144 promulgated under the Securities Act provides such an exemption for
resales of securities under certain circumstances. Under Rule 144, as
currently in effect, a person (or persons whose shares are aggregated) who
beneficially owns "restricted" shares that have been issued and not held by an
affiliate of the Company for at least two years from the time the shares were
fully paid for will be entitled to sell in "brokers' transactions" or to
market makers, within any three-month period, a number of shares that does not
exceed the greater of (i) 1% of the shares then outstanding or (ii) the
average weekly trading volume of the shares on all national securities
exchanges and/or the Nasdaq National Market during the four calendar weeks
preceding such sale. Sales under Rule 144 are also subject to certain notice
requirements and the availability of current public information about the
Company. Restricted shares held for three years by a person who is not, at the
time of sale and has not been at any time within three months prior thereto,
an affiliate of the Company may be sold without regard to the volume
limitations or manner of sale restrictions under Rule 144. The foregoing
summary of Rule 144 is not intended to be a complete description thereof. The
Company is seeking a no-action letter from the Commission permitting (a) the
Founding Shareholders to tack their pre-Exchange Offer holding period for
LaSalle Re Common Shares, and options therefor, to their holding period for
Common Shares or Exchangeable Non-Voting Shares, and options therefor,
received in, or in connection with, the Exchange Offer and (b) holders of
Exchangeable Non-Voting Shares received in the Exchange Offer, or upon the
exercise of options, to tack their holding period for such shares or options
to Common Shares that they may subsequently receive in an exchange permitted
by the Board. If the Commission provides a favorable no-action response with
respect to Common Shares and options therefor issued in, or in connection
with, the Exchange Offer, (w) all such Common Shares owned by the Founding
Shareholders immediately following the completion of the Company's initial
public offering will be available for resale under Rule 144 upon the
expiration of the lock-up period described below and (x) all Common Shares
directly issuable upon exercise of options will be available for immediate
resale upon issuance thereof upon expiration of the lock-up period described
below. If the Commission provides a favorable response both with respect to
(y) Exchangeable Non-Voting Shares issued in the Exchange Offer, or upon the
exercise of options, and (z) Common Shares issued in the future upon a
permitted exchange of Exchangeable Non-Voting Shares issued in the Exchange
Offer, or upon exercise of options, all Common Shares which may be issued upon
an exchange of Exchangeable Non-Voting Shares (including such shares issuable
upon the exercise of options) will be eligible for immediate resale under Rule
144 at such time they are exchanged (although a new holding period might
subsequently be commenced by a transfer of the underlying Exchangeable Non-
Voting Shares or options to an unaffiliated third party by a Founding
Shareholder who is an affiliate of the Company). If the Commission does not
permit such tacking, Common Shares issued to the Founding Shareholders
pursuant to the Exchange Offer and Common Shares issued to the Founding
Shareholders in exchange for Exchangeable Non-Voting shares that were issued
in the Exchange Offer or upon exercise of options will have to be held for the
applicable holding period before being eligible for resale under Rule 144.

The Founding Shareholders and Mr. Blake have been granted certain rights
pursuant to the Shareholders Agreement to cause the Company to register Common
Shares held by them under the Securities Act. See "Certain Transactions--
Shareholders Agreement."

65
<PAGE>

stock purchase plans and grant options pursuant to stock option plans and (ii)
the Selling Shareholders may sell shares subject to the U.S. Underwriters'
over-allotment option and shares repurchased by the Company pursuant to the
Company's capital management strategy and may transfer shares as bona fide
gifts and pledge shares so long as the donees or pledgees, as the case may be,
agree in writing with the Underwriters to be bound by the terms of such
agreement. See "Business--Capital Management Strategy," "Management--Long-Term
Incentive Plan" and "--Employee Stock Purchase Plan."

CERTAIN TAX CONSIDERATIONS

The following summary of taxation of Holdings, LaSalle Re, LaSalle Re
Services and LaSalle Re Capital and the taxation of shareholders of the
Company is based upon current law. The following discussion is a summary of
the principal Bermuda, United Kingdom and U.S. federal income tax consequences
of the ownership and disposition of Holdings' Common Shares. The summary does
not purport to be a complete analysis of all of the tax considerations that
may be applicable to a decision to acquire Common Shares of Holdings and,
unless explicitly noted to the contrary, deals only with investors who are
U.S. Persons (as defined below) who will hold the Common Shares as "capital
assets" within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code"); provided, however, that except as explicitly
provided below, the summary does not apply to a U.S. 10% shareholder (as
defined below) of Holdings or LaSalle Re. The tax treatment of any particular
shareholder may vary depending on such shareholder's particular tax situation
or status. Consequently, each prospective shareholder is urged to consult his
or its own tax advisors as to the particular tax consequences of the Offerings
to such shareholder, including the effect and applicability of federal, state,
local and foreign income and other tax laws. Legislative, judicial or
administrative changes may be forthcoming that could affect this summary.

As used herein, the term "U.S. Person" means a citizen or resident of the
United States; a corporation, partnership, or other entity created or
organized in the United States or under the laws of the United States or of
any political subdivision thereof; an estate whose income is includible in
gross income for United States Federal income tax purposes regardless of its
source; or a "United States Trust." A United States Trust is (a) for taxable
years beginning after December 31, 1996, or if the trustee of a trust elects
to apply the following definition to an earlier taxable year, any trust if,
and only if, (i) a court within the United States is able to exercise primary
supervision over the administration of the trust and (ii) one or more U.S.
trustees have the authority to control all substantial decisions of the trust,
and (b) for all other taxable years, any trust whose income is includible in
gross income for United States Federal income tax purposes regardless of its
source. A U.S. Person who holds Common Shares or shares of LaSalle Re as
"capital assets" within the meaning of section 1221 of the Code will be
referred to herein as a "U.S. Holder."

Statements made below as to Bermuda tax law are based on the opinion of
Conyers, Dill & Pearman, Bermuda counsel to the Company as to such tax laws
(subject to the qualifications and assumptions set forth in such opinion).
Statements below as to the United Kingdom tax law are based on the opinion of
Clyde & Co., U.K. counsel to the Company as to such tax laws (subject to the
qualifications and assumptions set forth in such opinion). Statements made
below as to United States federal income tax law are based upon the opinion of
Mayer, Brown & Platt, United States counsel to the Company as to such tax laws
(subject to the qualifications and assumptions set forth in such statements).
The statements as to the Company's beliefs and conclusions as to the
application of such tax laws to the Company represent the views of the
Company's management as to the application of such laws and do not represent
legal opinions of the Company or its counsel.

TAXATION OF THE COMPANY AND ITS SUBSIDIARIES

Bermuda

Under current Bermuda law, there is no income tax or capital gains tax
payable by Holdings, LaSalle Re or LaSalle Re Capital. Holdings, LaSalle Re
and LaSalle Re Capital have received from the Bermuda Minister of Finance an
assurance under The Exempted Undertakings Tax Protection Act, 1966 of Bermuda,
to the effect that

66
<PAGE>

in the event of there being enacted in Bermuda any legislation imposing tax
computed on profits or income, or computed on any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, then
the imposition of any such tax shall not be applicable to Holdings, to LaSalle
Re, to LaSalle Re Capital, or to any of their operations or their shares,
debentures or other obligations, until March 28, 2016. This assurance is
subject to the proviso that it is not construed so as to prevent the
application of any tax or duty to such persons as are ordinarily resident in
Bermuda (Holdings, LaSalle Re and LaSalle Re Capital are not so currently
affected) or to prevent the application of any tax payable in accordance with
the provisions of The Land Tax Act 1967 of Bermuda or otherwise payable in
relation to any property leased to Holdings or LaSalle Re. Holdings and
LaSalle Re, under current rates, each pay annual Bermuda government fees of
$1,380 and $15,000, respectively, and LaSalle Re currently pays annual
insurance fees of $1,100. In addition, all entities employing individuals in
Bermuda are required to pay a payroll tax to the Bermuda government.

United Kingdom

LaSalle Re Services and LaSalle Re Capital are subject to tax in the United
Kingdom on their income. However, the Company believes that the taxable income
of LaSalle Re Services and LaSalle Re Capital will be modest, and that their
tax liability is and will continue to be small. LaSalle Re Capital may become
a corporate member of a Lloyd's syndicate. If it does become such a member, it
will be subject to the U.K. corporation tax and value added tax. The Company
believes that the activities of LaSalle Re Services and LaSalle Re Capital
will not cause LaSalle Re or Holdings to be subject to United Kingdom tax on
any portion of their net income.

United States

In general, under current U.S. tax rules and regulations, a foreign
corporation is subject to U.S. federal income tax on its taxable income that
is treated as effectively connected to its conduct of a trade or business
within the U.S. and to the U.S. branch profits tax on its effectively
connected earnings and profits (with certain adjustments) deemed repatriated
out of the United States. However, pursuant to most U.S. income tax treaties,
a foreign corporation is subject to the U.S. federal income tax on its
business profits only if it is engaged in the conduct of a trade or business
in the U.S. through a permanent establishment located therein. The U.S. has
entered into a treaty with Bermuda (the "Bermuda Treaty"). Pursuant to the
Bermuda Treaty business profits earned by residents of Bermuda may be taxed in
the United States only if such profits are attributable to the conduct of a
trade or business carried on through a permanent establishment in the United
States; however, the permanent establishment provision of the Bermuda Treaty
applies only to the business profits of an enterprise of insurance and a
Bermuda resident will be entitled to the benefits of the Bermuda Treaty only
if (i) 50% or more of its equity is beneficially owned, directly or
indirectly, by Bermuda residents or U.S. citizens or residents and (ii) its
income is not used in substantial part, directly or indirectly, to make
disproportionate distributions to, or to meet certain liabilities to, persons
who are not Bermuda residents or U.S. citizens or residents (the "Bermuda
Treaty Benefits Test"). For purposes of the Bermuda Treaty, a permanent
establishment generally is defined to include a branch, office or other fixed
place of business through which the business of the enterprise is carried on,
or an agent (other than an agent of independent status acting in the ordinary
course of its business) that has, and habitually exercises in the U.S.,
authority to conclude contracts in the name of the corporation.

It is the opinion of the Company's United States counsel that, based on
representations made by Holdings and LaSalle Re regarding their activities
with respect to the United States, Holdings and LaSalle Re should not be
subject to U.S. federal net income tax imposed on their business income. It is
anticipated that Holdings and LaSalle Re will operate in the future so as not
to be engaged in the conduct of a trade or business in the U.S. However, as
there are no definitive standards provided by the Code, regulations or court
decisions as to those activities that constitute being engaged in the conduct
of a trade or business within the United States, and as the determination is
essentially factual in nature, there can be no assurance that the IRS will not
contend successfully that Holdings and/or LaSalle Re is engaged in a trade or
business in the United States. If Holdings and/or LaSalle Re were deemed to be
so engaged, that entity would be subject to U.S. income tax, as well as the
branch profits tax, on its income which is treated as effectively connected
with the conduct of that trade or business unless the entity is entitled to
relief under the permanent establishment provision of the Bermuda Treaty, as
discussed below.

67
<PAGE>

It is uncertain whether LaSalle Re will be entitled to relief under the
permanent establishment provisions of the Bermuda Treaty upon completion of
this offering or at any time thereafter as it cannot be predicted whether
LaSalle Re would satisfy the Bermuda Treaty Benefits Test. No regulations
interpreting the Bermuda Treaty have been issued. However, as stated above,
while there can be no assurances, the Company believes that LaSalle Re will
not be engaged in the conduct of a U.S. trade or business and, in any event,
the Company does not believe that LaSalle Re will have a permanent
establishment in the United States.

If the Company or LaSalle Re is subject to U.S. federal income tax, that
entity would be taxed at regular corporate rates on all of its income that is
effectively connected with the conduct of its U.S. business (or, in the case
of LaSalle Re, all of its income attributable to its U.S. permanent
establishment if LaSalle Re is entitled to the benefits of the Bermuda
Treaty). In addition, the Company or LaSalle Re would be subject to the branch
profits tax. Such income tax, if imposed, would be based on effectively
connected income computed in a manner generally analogous to that applied to
the income of a domestic corporation, except that a foreign corporation can
anticipate an allowance of deductions and credits only if it files a United
States income tax return. Penalties may be assessed for failure to file tax
returns. Holdings and LaSalle Re intend to file protective U.S. income tax
returns on a timely basis in order to preserve their right to claim tax
deductions and credits if either company subsequently is determined to be
subject to U.S. tax on a net basis. The highest marginal federal income tax
rates currently are 35% for a corporation's effectively connected income and
30% for the "branch profits" tax. If LaSalle Re were deemed to be engaged in
business in the United States but did not have a permanent establishment in
the United States within the meaning of the Bermuda Treaty and LaSalle Re
qualified for Bermuda Treaty benefits, there is an argument that premium
income of LaSalle Re would be exempt from U.S. tax but that its investment
income effectively connected with its U.S. business would be subject to U.S.
tax on a net basis, and that the branch profits tax may be applicable to that
investment income.

LaSalle Re Capital may become a corporate member of a Lloyd's syndicate. If
it does become such a member, it will become subject to a Closing Agreement
between Lloyd's and the IRS and will be treated as engaged in business in the
U.S. and will become subject to U.S. corporate income tax on its net income
from U.S. sources.

Foreign corporations not engaged in a trade or business in the United
States, as well as foreign corporations engaged in the conduct of a U.S. trade
or business but only with respect to their income that is not effectively
connected with such trade or business, are nonetheless subject to U.S. income
tax on certain "fixed or determinable annual or periodical gains, profits and
income" (such as dividends and certain interest on investments) derived from
sources within the United States. Such tax generally is imposed at a rate of
30% on the gross income subject to the tax, but the rate may be reduced by
applicable treaties, and the tax is eliminated with respect to certain types
of U.S. source income, such as portfolio interest.

The United States also imposes an excise tax on insurance and reinsurance
premiums paid to foreign insurers or reinsurers with respect to risks located
in the United States. The rates of tax applicable to premiums paid to LaSalle
Re are 4% for casualty insurance premiums and 1% for reinsurance premiums.

The Treasury Department has recently announced proposals that would
significantly affect the taxation of companies that enter into insurance or
reinsurance contracts with certain affiliated companies. These proposals, if
enacted into law, might significantly affect the taxation of the Company.
However, these proposals have not been introduced in Congress as legislation
and it is impossible to predict whether, or in what form, such legislation
will be enacted and the effect, if any, of legislation that might be enacted
on the taxation of the Company.

TAXATION OF SHAREHOLDERS

Bermuda Taxation

Currently, there is no Bermuda withholding tax on dividends paid by the
Company.

68
<PAGE>

United States Taxation of U.S. and Non-U.S. Shareholders

Taxation of Dividends. Subject to the discussion below relating to the
potential application of the "controlled foreign corporation" and "passive
foreign investment company" rules, cash distributions made with respect to
Common Shares will constitute dividends for U.S. federal income tax purposes
to the extent paid out of current or accumulated earnings and profits of
Holdings. U.S. Holders generally will be subject to U.S. federal income tax on
the receipt of such dividends. Generally, such dividends will not be eligible
for the dividends received deduction. To the extent that a distribution
exceeds earnings and profits, it will be treated first as a return of the U.S.
Holder's basis to the extent thereof, and then as gain from the sale of a
capital asset.

Possible Classification of the Company as a Controlled Foreign Corporation.
Under section 951(a) of the Code, each "U.S. 10% shareholder" (as defined
below) that, on the last day of the foreign corporation's taxable year, owns,
directly or indirectly through a foreign entity, shares of a foreign
corporation that is a "controlled foreign corporation" ("CFC") for an
uninterrupted period of 30 days or more during any taxable year must include
in its gross income for United States federal income tax purposes its pro rata
share of the CFC's "subpart F income" for such year, even if the subpart F
income is not distributed. In addition, the U.S. 10% shareholders of a CFC may
be deemed to receive taxable distributions to the extent the CFC increases the
amount of its earnings that are invested in certain specified types of U.S.
property. All of Holdings', LaSalle Re's, and LaSalle Re Capital's income is
expected to be subpart F income, except to the extent that LaSalle Re
Capital's income qualifies for an exception from the subpart F rules as
described below. "Subpart F income" includes, inter alia, (i) "foreign
personal holding company income," such as interest, dividends, and other types
of passive investment income and (ii) "insurance income," which is defined to
include any income (including underwriting and investment income) that is
attributable to the issuing (or reinsuring) of any insurance or annuity
contract in connection with property in, liability arising out of activity in,
or in connection with the lives or health of residents of, a country other
than the country under the laws of which the CFC is created or organized, and
which (subject to certain modifications) would be taxed under the insurance
company provisions of the Code if such income were the income of a domestic
insurance company ("Subpart F Insurance Income"). However, Subpart F income
does not include (i) any income from sources within the U.S. which is
effectively connected with the conduct of a trade or business within the U.S.
and not exempted or subject to a reduced rate of tax by applicable treaty and
(ii) certain income subject to high foreign taxes.

Under Code section 951(b), any U.S. Person who owns, directly or indirectly
through foreign entities, or is considered to own (by application of the rules
of constructive ownership set forth in Code section 958(b), generally applying
to family members, partnerships, estates, trusts or 10% controlled
corporations) 10% or more of the total combined voting power of all classes of
stock of a foreign corporation will be considered to be a "U.S. 10%
shareholder." In general, a foreign corporation is treated as a CFC only if
its U.S. 10% shareholders collectively own more than 50% of the total combined
voting power or total value of the corporation's stock on any day (the "50%
Test"). However, for purposes only of taking into account Subpart F Insurance
Income, a foreign corporation will be treated as a CFC if (i) more than 25% of
the total combined voting power or total value of its stock is owned by U.S.
10% shareholders and (ii) the gross amount of premiums or other consideration
in respect of risks outside its country of incorporation exceeds 75% of the
gross amount of all premiums or other consideration in respect of all risks
(the "25% Test"). It is anticipated for both LaSalle Re and LaSalle Re Capital
that the gross premiums of each corporation in respect of Subpart F Insurance
Income will exceed 75% of each such corporation's gross premiums in respect of
all risks so that the 25% Test, rather than the 50% Test, will be applicable
with respect to the Subpart F Insurance Income of both LaSalle Re and LaSalle
Re Capital.

In determining the U.S. 10% shareholders of LaSalle Re and LaSalle Re
Capital, capital stock of LaSalle Re and LaSalle Re Capital held indirectly by
U.S. persons through Holdings or any other non-U.S. entity is treated as held
by United States persons. The Company believes that because of the dispersion
of its share ownership and because Holdings' Bye-Laws require prior Board
approval for any transfer of Common Shares that results in any shareholder
(other than a mutual fund) beneficially owning Common Shares equal to 5% or
more of the voting power of Holdings or any shareholder holding actually,
indirectly through foreign entities or

69
<PAGE>

constructively more than 9.9% of the voting power of Holdings, neither
Holdings, LaSalle Re nor LaSalle Re Capital is a CFC under the foregoing
general rules. However, there can be no assurance that Holdings, LaSalle Re or
LaSalle Re Capital will not at some time become a CFC. Each prospective
investor should consult its own tax advisor to determine whether its ownership
interest in Holdings would cause it to become a U.S. 10% shareholder of
Holdings, LaSalle Re, LaSalle Re Capital or of any subsidiary which may be
created by Holdings or LaSalle Re and to determine the impact of such a
classification of such investor.

RPII Companies. A different definition of "controlled foreign corporation"
is applicable in the case of a foreign corporation which earns related person
insurance income ("RPII"). RPII is defined in Code section 953(c)(2) as any
"insurance income" (as defined above) attributable to policies of insurance or
reinsurance with respect to which the person (directly or indirectly) insured
is a "RPII shareholder" (as defined below) of the foreign corporation or a
"related person" to such a shareholder. For purposes only of taking into
account RPII, and subject to the exceptions described below, LaSalle Re or
LaSalle Re Capital will be treated as a CFC if its "RPII shareholders"
collectively own, directly, indirectly, or by attribution under Code Section
958(b), 25% or more of the total combined voting power or value of such
corporation's stock on any day during a taxable year. If LaSalle Re or LaSalle
Re Capital is a CFC for an uninterrupted period of at least 30 days during any
taxable year under the special RPII rules, a U.S. Person who owns, directly or
indirectly through foreign entities, shares of LaSalle Re or LaSalle Re
Capital on the last day of any such taxable year must include in its gross
income for United States Federal income tax purposes its allocable share of
RPII income of such corporation for the entire taxable year, subject to
certain modifications. For purposes of inclusion of LaSalle Re's or LaSalle Re
Capital's RPII in the income of U.S. Persons who own Common Shares or shares
of LaSalle Re, unless an exception applies, the term "RPII shareholder"
includes all U.S. Persons who own, directly or indirectly through foreign
entities, any amount (rather than 10% or more) of the Common Shares or shares
of LaSalle Re or LaSalle Re Capital. Generally, the term "related person" for
purposes of the RPII rules means someone who controls or is controlled by the
RPII shareholder or someone who is controlled by the same person or persons
which control the RPII shareholder. Control is measured by either more than
50% in value or more than 50% in voting power of stock applying constructive
ownership principles similar to the rules of section 958 of the Code.

RPII Exceptions. The special RPII rules do not apply if direct and indirect
insureds and persons related to such insureds, whether or not U.S. Persons,
are treated at all times during the taxable year as owning, directly or
indirectly through entities, less than 20% of the voting power and less than
20% of the value of the stock of LaSalle Re and LaSalle Re Capital, or the
RPII of LaSalle Re and LaSalle Re Capital, determined on a gross basis, is
less than 20% of such corporation's gross insurance income for such taxable
year, or if certain other exceptions apply. Where no exception applies, each
RPII shareholder of LaSalle Re and LaSalle Re Capital on the last day of such
corporation's fiscal year will be required to include in its gross income for
United States federal income tax purposes its share of the RPII for the entire
taxable year, determined as if all such RPII were distributed proportionately
only to such RPII shareholders at that date, but limited by such corporation's
current-year earnings and profits and reduced by the RPII shareholder's share,
if any, of prior-year deficits in earnings and profits.

LaSalle Re reinsures, and expects to continue reinsuring, the risks of an
insurance company that is related to CNA, a RPII shareholder of LaSalle Re,
and thus expects to generate RPII. In addition, LaSalle Re may be considered
to reinsure directly or indirectly the risks of other RPII shareholders of
LaSalle Re or parties related thereto, thus generating RPII. LaSalle Re has in
the past and intends in the future to monitor the reinsurance of related
persons to limit the gross RPII from such reinsurance to less than 20% of
LaSalle Re's gross insurance income. For LaSalle Re's most recent taxable year
ended September 30, 1996, the Company believes gross RPII of LaSalle Re was
less than 20% of LaSalle Re's gross insurance income for the year and,
although no assurances can be given, the Company will endeavor to take such
steps as it determines to be reasonable to cause LaSalle Re's gross RPII to
remain below such level. The Company believes gross RPII of LaSalle Re Capital
will be less than 20% of LaSalle Re Capital's gross insurance income for each
taxable year and will endeavor to take such steps as it determines to be
reasonable to cause LaSalle Re Capital's gross RPII to remain below such
level.

70
<PAGE>

Computation of RPII. In order to determine how much RPII LaSalle Re and
LaSalle Re Capital have earned in each fiscal year, the Company intends to
obtain and rely upon information from its insureds to determine whether any of
the insureds or persons related to such insureds own shares of Holdings or
LaSalle Re and are U.S. Persons. The Company may not be able to determine
whether any of the underlying insureds of the insurance companies to which
LaSalle Re and LaSalle Re Capital provide reinsurance are RPII shareholders or
related persons to such shareholders. Consequently, Holdings may not be able
to determine accurately the gross amount of RPII earned by LaSalle Re and
LaSalle Re Capital in a given taxable year. LaSalle Re and LaSalle Re Capital
will take reasonable steps to secure such additional information relevant to
determine the amount of each corporation's insurance income that is RPII as
they believe advisable, but there can be no assurance that such information
will be sufficient to enable LaSalle Re and LaSalle Re Capital to establish
clearly such amount. For any year in which the Company has determined that
gross RPII is 20% or more of LaSalle Re's or LaSalle Re Capital's gross
insurance income, the Company may also seek information from its shareholders
as to whether direct or indirect owners of Common Shares or shares of LaSalle
Re at the end of the year are U.S. Persons so that the RPII may be determined
and apportioned among such persons. In any such year, the Company will inform
all shareholders of RPII per share and RPII shareholders are obligated to file
a return reporting such amounts. To the extent the Company is unable to
determine whether a direct or indirect owner of shares is a U.S. Person the
Company may assume that such owner is not a U.S. Person for the purpose of
allocating RPII, thereby increasing the per share RPII amount for all RPII
shareholders.

Apportionment of RPII to RPII Shareholders. The amount of RPII includible in
the income of a RPII shareholder is based upon the net RPII income for the
year after deducting related expenses such as losses, loss reserves and
operating expenses. Every U.S. Person who owns, directly or indirectly through
foreign entities, Common Shares or shares of LaSalle Re on the last day of any
taxable year of LaSalle Re or LaSalle Re Capital in which LaSalle Re's or
LaSalle Re Capital's gross insurance income constituting RPII for that year
equals or exceeds 20% of such corporation's gross insurance income should
expect that for such year it will be required to include in gross income its
share of such corporation's RPII for the entire year, whether or not
distributed, even though it may not have owned the shares for the entire year.
A U.S. Person who owns Common Shares or shares of LaSalle Re during such
taxable year but not on the last day of the taxable year, which would normally
be September 30, is not required to include in gross income any part of
LaSalle Re's or LaSalle Re Capital's RPII.

Basis Adjustments. A RPII shareholder's tax basis in its Common Shares or
shares of LaSalle Re will be increased by the amount of any RPII that the
shareholder includes in income. The shareholder may exclude from income the
amount of any distributions by Holdings or LaSalle Re to the extent of the
RPII included in income for the year in which the distribution was paid or for
any prior year. The RPII shareholder's tax basis in its Common Shares or
shares of Lasalle Re will be reduced by the amount of such distributions that
are excluded from income. In general, a RPII shareholder will not be able to
exclude from income distributions with respect to RPII that a prior
shareholder included in income.

Information Reporting. Every U.S. Person who "controls" a foreign
corporation by owning directly or by attribution more than 50% of the total
combined voting power of all classes of stock entitled to vote, or more than
50% of the total value of shares of all classes of stock, of such corporation,
for an uninterrupted period of 30 days or more during a fiscal year of that
foreign corporation, must file a Form 5471 with its U.S. income tax return.
However, the IRS has the authority to, and does require, any U.S. Person
treated as a U.S. 10% shareholder or RPII shareholder of a CFC that owns
shares directly or indirectly through a foreign entity to file a Form 5471.
Thus, if LaSalle Re's or LaSalle Re Capital's gross RPII for a taxable year
constitutes 20% or more of such corporation's gross insurance income for such
period, any U.S. Person treated as owning shares of LaSalle Re or LaSalle Re
Capital directly or indirectly on the last day of such taxable year is
considered a RPII shareholder for purposes of the RPII rules and will be
required to file a Form 5471. In addition, U.S. Persons who own more than 5%
in value of the outstanding stock of Holdings or LaSalle Re at any time during
a taxable year are required in certain circumstances to file Form 5471 even if
neither corporation is a CFC. For any taxable year in which the Company
determines that LaSalle Re's or LaSalle Re Capital's gross RPII constitutes
20% or more of such corporation's gross insurance income, the Company intends
to mail to all shareholders of record,

71
<PAGE>

and will make available at the transfer agent with respect to the Common
Shares and shares of LaSalle Re, Form 5471 (completed with Company
information) for attachment to the returns of shareholders. However, the
Company's determination of the amount of LaSalle Re's or LaSalle Re Capital's
gross RPII for a given fiscal year may not be accurate because of the
Company's inability to gather the information necessary to make such
determination. See "Certain Tax Considerations--Taxation of Shareholders--
United States Taxation of U.S. and Non-U.S. Shareholders--Computation of
RPII." A tax-exempt organization that is treated as a U.S. 10% shareholder or
a RPII shareholder for any purpose under subpart F will be required to file a
Form 5471 in the circumstances described above. Failure to file Form 5471 may
result in penalties.

Tax-Exempt Shareholders. Code section 512(b)(17), which was added to the
Code on August 20, 1996, by the Small Business Job Protection Act of 1996
(P.L. 104-188), requires a tax-exempt entity owning, directly or indirectly
through a foreign entity or constructively under Code section 958(b) shares of
Holdings or LaSalle Re, to treat as unrelated business taxable income ("UBTI")
within the meaning of Code section 512 the portion of any deemed distribution
to such shareholder of Subpart F income under Code section 951(a) that is
attributable to insurance income which, if derived directly by such
shareholder, would be treated as UBTI. Exceptions are provided for income
attributable to a policy of insurance or reinsurance with respect to which the
person (directly or indirectly) insured is--(i) the tax-exempt shareholder,
(ii) an affiliate of the tax-exempt shareholder which itself is exempt from
tax under Code section 501(a), or (iii) a director or officer of, or an
individual who (directly or indirectly) performs services for, the tax-exempt
shareholder or an exempt affiliate but only if the insurance covers primarily
risks associated with the performance of services in connection with the tax-
exempt shareholder or exempt affiliate.

Code section 512(b)(17) applies to amounts included in gross income in any
taxable year beginning after December 31, 1995. If LaSalle Re's or LaSalle Re
Capital's gross RPII were to equal or exceed 20% of such corporation's gross
insurance income, or Holdings, LaSalle Re or LaSalle Re Capital were otherwise
treated as a CFC, for a taxable year beginning after December 31, 1995, tax-
exempt entities owning stock in the Company might be required to treat a
portion of the Company's Subpart F income as UBTI. Prospective investors that
are tax-exempt entities are urged to consult their tax advisors as to the
potential impact of Code section 512(b)(17) and the UBTI provisions of the
Code.

Dispositions of Common Shares. Subject to the discussion elsewhere relating
to the potential application of the "controlled foreign corporation" and
"passive foreign investment company" rules, capital gain or loss realized by a
U.S. Holder on the sale, exchange or other disposition of Common Shares will
be includible in gross income as capital gain or loss in an amount equal to
the difference between such holder's basis in Common Shares and the amount
realized on the sale, exchange or other disposition. If a U.S. Holder's
holding period for the Common Shares is more than one year, any gain will be
subject to the U.S. federal income tax at a current maximum marginal rate of
28% for individuals and 35% for corporations.

Code section 1248 provides that if a U.S. Person owns directly, indirectly
through foreign entities or constructively under Code section 958(b), 10% or
more of the voting shares of a corporation that is a CFC, any gain from the
sale or exchange of the shares may be treated as ordinary income to the extent
of the CFC's earnings and profits during the period that the shareholder held
the shares (with certain adjustments). Code section 953(c)(7) generally
provides that section 1248 also will apply to the sale or exchange of shares
by a RPII shareholder in a foreign corporation that earns RPII and is
characterized as a CFC under the RPII rules if the foreign corporation would
be taxed as an insurance company if it were a domestic corporation, regardless
of whether the shareholder is a U.S. 10% shareholder or whether RPII
constitutes 20% or more of the corporation's gross insurance income. Existing
Treasury Department regulations do not address whether Code section 1248 would
apply when a foreign corporation (such as Holdings) is not a CFC but the
foreign corporation has an insurance company subsidiary that is a CFC (such as
LaSalle Re or LaSalle Re Capital) for purposes of requiring U.S. shareholders
to take into account RPII.

It is the opinion of the Company's United States counsel that Code section
1248 should not apply to dispositions of Common Shares because Holdings will
not have any U.S. 10% shareholders and Holdings is not

72
<PAGE>

directly engaged in the insurance business. There can be no assurance,
however, that the IRS will interpret proposed regulations under Code section
953 in this manner or that the Treasury Department will not amend the proposed
regulations under Code section 953 or other regulations to provide that Code
section 1248 will apply to dispositions of shares in a corporation such as
Holdings which is engaged in the insurance business indirectly through its
subsidiaries. If the IRS or Treasury Department were to take such action, the
Company would notify shareholders that Code section 1248 will apply to
dispositions of Common Shares.

Uncertainty as to Application of RPII. The RPII provisions of the Code have
never been interpreted by the courts. Regulations interpreting the RPII
provisions of the Code exist only in proposed form, having been proposed on
April 16, 1991. It is not certain whether these regulations will be adopted in
their proposed form or what changes or clarifications might ultimately be made
thereto or whether any such changes, as well as any interpretation or
application of RPII by the IRS, the courts or otherwise, might have
retroactive effect. Accordingly, the meaning of the RPII provisions and the
application thereof to Holdings, LaSalle Re and LaSalle Re Capital is
uncertain. These provisions include the grant of authority to the U.S.
Treasury Department to prescribe "such regulations as may be necessary to
carry out the purpose of this subsection including . . . regulations
preventing the avoidance of this subsection through cross insurance
arrangements or otherwise." In addition, there can be no assurance that any
amounts of RPII inclusions reported by the Company to RPII shareholders will
not be subject to adjustment based upon subsequent IRS examination. Each U.S.
person who is considering an investment in Common Shares should consult his
tax advisor as to the effects of these uncertainties.

Foreign Tax Credit. Because it is anticipated that U.S. Persons will own a
majority of Holdings' shares after the Offering and because a substantial part
of LaSalle Re's business includes the insurance of U.S. risks, only a portion
of the RPII and dividends paid by Holdings (including any gain from the sale
of Common Shares that is treated as a dividend under Code section 1248) will
be treated as foreign source income for purposes of computing a shareholder's
U.S. foreign tax credit limitation. It is likely that substantially all of the
RPII and dividends that are foreign source income will constitute either
"passive" or "financial services" income for foreign tax credit limitation
purposes. Thus, it may not be possible for certain U.S. Holders to utilize
excess foreign tax credits to reduce U.S. tax on such income.

Passive Foreign Investment Companies. Code sections 1291 through 1297
contain special rules applicable with respect to foreign corporations that are
"passive foreign investment companies" ("PFICs"). In general, a foreign
corporation will be a PFIC if 75% or more of its gross income constitutes
"passive income" (the "75% Income Test") or 50% or more of its assets produce,
or are held for the production of, passive income (the "50% Asset Test"). If
the Company were to be characterized as a PFIC, its United States shareholders
would have to make an election (a "QEF Election") to be currently taxable on
their pro-rata share of earnings of the Company whether or not such earnings
were distributed or they would be subject to a special tax and an interest
charge at the time of the sale of, or receipt of an "excess distribution" with
respect to, their shares, and a portion of any gain may be recharacterized as
ordinary income. In general, a shareholder receives an "excess distribution"
if the amount of the distribution is more than 125% of the average
distribution with respect to the stock during the three preceding taxable
years (or shorter period during which the taxpayer held the stock). In
general, the special tax and interest charges are based on the value of the
tax deferral of the taxes that are deemed due during the period the United
States shareholder owned the shares, computed by assuming that the excess
distribution or gain (in the case of a sale) with respect to the shares was
taxed in equal portions throughout the holder's period of ownership at the
highest marginal tax rate. The interest charge is computed using the
applicable rate imposed on underpayments of U.S. Federal income tax for such
period. In general, if a U.S. Person owns stock in a foreign corporation
during any taxable year in which such corporation is a PFIC and such
shareholder does not make a QEF Election, the stock will be treated as stock
in a PFIC for all subsequent years.

For the above purposes, "passive income" is defined to include income of a
kind that would be characterized as foreign personal holding company income
under Code section 954(c), and generally includes interest, dividends,
annuities and other investment income. The PFIC statutory provisions contain
an express

73
<PAGE>

exception for income "derived in the active conduct of an insurance business
by a corporation which is predominantly engaged in an insurance business . .
." (the "Insurance Company Exception"). This exception is intended to ensure
that income derived by a bona fide insurance company is not treated as passive
income. Thus, to the extent such income is attributable to financial reserves
in excess of the reasonable needs of the insurance business, it may be treated
as passive income for purposes of the PFIC rules. The PFIC statutory
provisions also contain a look-through rule that states that, for purposes of
determining whether a foreign corporation is a PFIC, such foreign corporation
shall be treated as if it "received directly its proportionate share of the
income . . ." and as if it "held its proportionate share of the assets . . ."
of any other corporation in which it owns at least 25% of the value of the
stock. It is anticipated that both LaSalle Re and LaSalle Re Capital should be
entitled to the Insurance Company Exception and that neither corporation will
have financial reserves in excess of the reasonable needs of its insurance
business, and therefore that none of LaSalle Re's or LaSalle Re Capital's
income or assets will be considered to be passive. Under the look-through rule
Holdings would be deemed to own its proportionate share of the assets and to
have received its proportionate share of the income of LaSalle Re and LaSalle
Re Capital for purposes of the 75% Income and 50% Asset Tests, and therefore
Holdings should not be considered a PFIC.

However, no final regulations interpreting the substantive PFIC provisions
have yet been issued. Therefore, substantial uncertainty exists with respect
to their application or their possible retroactivity. Each U.S. person who is
considering an investment in Common Shares should consult his tax advisor as
to the effects of these rules.

Other. Dividends paid by Holdings to U.S. corporate shareholders will not be
eligible for the dividends received deduction provided by Code section 243.

Except as discussed below with respect to backup withholding, dividends paid
by Holdings will not be subject to a U.S. withholding tax.

Information reporting to the IRS by paying agents and custodians located in
the U.S. will be required with respect to payments of dividends (if any) on
the Common Shares to holders of Common Shares or to paying agents or
custodians located in the United States. In addition, a holder of Common
Shares may be subject to backup withholding at the rate of 31% with respect to
dividends paid by such persons, unless such holder (a) is a corporation or
comes within certain other exempt categories and, when required, demonstrates
this fact; or (b) provides a taxpayer identification number, certifies as to
no loss of exemption from backup withholding and otherwise complies with
applicable requirements of the backup withholding rules. The backup
withholding tax is not an additional tax and may be credited against a
holder's regular Federal income tax liability.

Sales of Common Shares through brokers by certain U.S. Persons also may be
subject to back-up withholding. Sales by corporations, certain tax-exempt
entities, individual retirement plans, REITs, certain financial institutions,
and other "exempt recipients" as defined in applicable Treasury regulations
currently are not subject to back-up withholding. Holders of Common Shares
should consult their own tax advisors regarding the possible applicability of
the back-up withholding provisions to sales of their Common Shares.

If a non-U.S. holder sells Common Shares through a U.S. office of a U.S. or
foreign broker, the broker is required to file an information return and is
required to withhold 31% of the sale proceeds unless the non-U.S. holder is an
exempt recipient or has provided the broker with the information and
statements, under penalties of perjury, necessary to establish an exemption
from backup withholding. If payment of the proceeds of the sale of a share by
a non-U.S. holder is made to or through the foreign office of a broker, that
broker will not be required to backup withhold or, except as provided in the
next sentence, to file information returns. In the case of proceeds from a
sale of a share by a non-U.S. holder paid to or through the foreign office of
a U.S. broker or a foreign office of a foreign broker that is (i) a controlled
foreign corporation for U.S. tax purposes or (ii) a person 50% or more of
whose gross income for the three-year period ending with the close of the
taxable year preceding the year of payment (or for the part of that period
that the broker has been in existence) is effectively connected with the
conduct of a trade or business within the United States (a "Foreign U.S.
Connected Broker"),

74
<PAGE>

information reporting is required unless the broker has documentary evidence
in its files that the payee is not a U.S. person and certain other conditions
are met, or the payee otherwise establishes an exemption. In addition, the
Treasury Department has indicated that it is studying the possible application
of backup withholding in the case of such foreign offices of U.S. and Foreign
U.S. Connected Brokers.

The foregoing discussion (including and subject to the matters and
qualifications set forth in such summary) is based upon current law and is for
general information only. The tax treatment of a holder of Common Shares, or
of a person treated as a holder of Common Shares for United States Federal
income, state, local or non-U.S. tax purposes, may vary depending on the
holder's particular tax situation. Legislative, judicial or administrative
changes or interpretations may be forthcoming that could be retroactive and
could affect the tax consequences to holders of Common Shares. PROSPECTIVE
INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL,
STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES TO THEM OF OWNING THE COMMON
SHARES.

75
<PAGE>

UNDERWRITING

Under the terms and subject to the conditions in the U.S. Underwriting
Agreement dated the date hereof, each of the underwriters of the United States
and Canadian offering of Common Shares named below (the "U.S. Underwriters"),
for whom Smith Barney Inc., Lazard Freres & Co. LLC and Morgan Stanley & Co.
Incorporated are acting as the Representatives (the "Representatives"), has
severally agreed to purchase, and the Selling Shareholders have agreed to sell
to each U.S. Underwriter, Common Shares which equal the number of shares set
forth opposite the name of such U.S. Underwriter below:

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Smith Barney Inc. ..............................................
Lazard Freres & Co. LLC.........................................
Morgan Stanley & Co. Incorporated...............................
---------
Total......................................................... 2,520,000
=========
</TABLE>

Under the terms and subject to the conditions contained in the International
Underwriting Agreement dated the date hereof, each of the managers of the
concurrent international offering of Common Shares named below (the
"Managers"), for whom Smith Barney Inc., Lazard Capital Markets and Morgan
Stanley & Co. International Limited are acting as lead managers (the "Lead
Managers"), has severally agreed to purchase, and the Selling Shareholders
have agreed to sell to each Manager, Common Shares which equal the number of
shares set forth opposite the name of such Manager below:

<TABLE>
<CAPTION>
NUMBER
OF
MANAGERS SHARES
-------- -------
<S> <C>
Smith Barney Inc. ................................................
Lazard Capital Markets............................................
Morgan Stanley & Co. International Limited........................
-------
Total........................................................... 630,000
=======
</TABLE>

The U.S. Underwriters and the Managers (collectively, the "Underwriters")
initially propose to offer part of the Common Shares directly to the public at
the public offering price set forth on the cover page of this Prospectus and
part to certain dealers at a price that represents a concession not in excess
of $ per share below the public offering price. The U.S. Underwriters and
the Managers may allow, and such dealers may reallow, a concession not in
excess of $ per share to the other U.S. Underwriters or Managers,
respectively, or to certain other dealers. After the initial offering of the
Common Shares to the public, the public offering price and such concessions
may be changed by the U.S. Underwriters and the Managers.

The Underwriting Agreements provide that the obligations of the several
Underwriters to pay for and accept delivery of the Common Shares are subject
to approval of certain legal matters by counsel and to certain other
conditions. The Underwriters are obligated to take and pay for all Common
Shares offered hereby (other than those covered by the over-allotment option
described below) if any such Common Shares are taken.

The Selling Shareholders have granted to the U.S. Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to an
aggregate of 472,500 additional Common Shares at the public offering price set
forth on the cover page of this Prospectus less underwriting discounts and
commissions. The U.S. Underwriters may exercise such option to purchase
additional Common Shares solely for the purpose of covering over-allotments,
if any, incurred in connection with the sale of the Common Shares offered
hereby. To the extent such option is exercised, each U.S. Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares as the number of shares set forth
opposite such U.S. Underwriter's name in the preceding table bears to the
total number of shares in such table.

76
<PAGE>

The Company, the U.S. Underwriters and the Managers have agreed to indemnify
each other against certain liabilities, including liabilities under the
Securities Act.

The Company, each of its officers and directors set forth under the heading
"Management" in this Prospectus and the Selling Shareholders have agreed that,
for a period of 180 days after the date of this Prospectus, they will not,
without the prior written consent of Smith Barney Inc., sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option or right to
purchase or acquire, or otherwise transfer or dispose of, any common shares of
the Company or any of its subsidiaries (or any securities convertible into or
exercisable or exchangeable for such common shares), except that (i) the
Company may issue Common Shares pursuant to stock purchase plans and grant
options pursuant to stock option plans and (ii) the Selling Shareholders may
sell shares subject to the U.S. Underwriters' over-allotment option and shares
repurchased by the Company pursuant to the Company's capital management
strategy and may transfer shares as bona fide gifts and pledge shares so long
as donees or the pledgees, as the case may be, agree in writing with the
Underwriters to be bound by the terms of such agreement. See "Business--
Capital Management Strategy," "Management--Long-Term Incentive Plan" and "--
Employee Stock Purchase Plan."

The U.S. Underwriters and the Managers have entered into an Agreement
Between U.S. Underwriters and Managers pursuant to which each U.S. Underwriter
has agreed that, as part of the distribution of the shares offered in the
United States and Canadian offering (i) it is not purchasing any such shares
for the account of anyone other than a U.S. or Canadian Person and (ii) it has
not offered or sold, and will not, offer, sell, resell or deliver, directly or
indirectly, any of such shares or distribute any prospectus relating to the
United States and Canadian offering outside the United States or Canada or to
anyone other than a U.S. or Canadian Person. In addition, each Manager has
agreed that as part of the distribution of the 630,000 Common Shares offered
in the international offering: (i) it is not purchasing any such shares for
the account of any U.S. or Canadian Person and (ii) it has not offered or
sold, and will not offer, sell, resell or deliver, directly or indirectly, any
of such shares or distribute any prospectus relating to the international
offering in the United States or Canada or to any U.S. or Canadian Person.
Each Manager has also agreed that it will offer to sell Common Shares only in
compliance with all relevant requirements of any applicable laws.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the U.S. Underwriting Agreement, the
International Underwriting Agreement and the Agreement Between U.S.
Underwriters and Managers, including: (i) certain purchases and sales between
the U.S. Underwriters and the Managers, (ii) certain offers, sales, resales,
deliveries or distributions to or through investment advisors or other persons
exercising investment discretion, (iii) purchases, offers or sales by a U.S.
Underwriter who is also acting as Manager or by a Manager who is also acting
as a U.S. Underwriter and (iv) other transactions specifically approved by the
Representatives and the Lead Managers. As used herein, "U.S. or Canadian
Person" means any resident or national of the United States or Canada, any
corporation, partnership or other entity created or organized in or under the
laws of the United States or Canada or any estate or trust the income of which
is subject to United States or Canadian income taxation regardless of the
source of its income (other than the foreign branch of any U.S. or Canadian
Person), and includes any United States or Canadian branch of a person other
than a U.S. or Canadian Person.

Any offer of Common Shares in Canada will be made only pursuant to an
exemption from the requirement to file a prospectus in the relevant province
of Canada in which such offer is made.

Each Manager has agreed that (i) it will not offer or sell any shares to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which will not involve an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
("the Regulations"); (ii) it will comply with all applicable provisions of the
Financial Services Act 1986 and the Regulations with respect to anything done
by it in relation to the shares in, from, or otherwise involving

77
<PAGE>

the United Kingdom; and (iii) it will only issue or pass on to any person in
the United Kingdom any document received by it in connection with the offer of
the Common Shares if that person is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom such document may otherwise lawfully be issued or
passed on.

No action has been or will be taken in any jurisdiction by the Company, the
Selling Shareholders or the Managers that would permit an offering to the
general public of the Common Shares offered hereby in any jurisdiction other
than the United States.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

Pursuant to the Agreement Between U.S. Underwriters and Managers, sales may
be made between the U.S. Underwriters and the Managers of such number of
shares as may be mutually agreed. The price of any shares so sold shall be the
public offering price as then in effect for shares being sold by the U.S.
Underwriters and the Managers, less all or any part of the selling concession,
unless otherwise determined by mutual agreement. To the extent that there are
sales between the U.S. Underwriters and the Managers pursuant to the Agreement
Between U.S. Underwriters and Managers, the number of Common Shares initially
available for sale by the U.S. Underwriters and by the Managers may be more or
less than the number of Common Shares appearing on the front cover of this
Prospectus.

The rules of the Commission generally prohibit the Underwriters from making
a market in the Common Shares during the two business days prior to
commencement of sales in the Offerings (the "Cooling Off Period"). The
Commission has, however, adopted Rule 10b-6A under the Exchange Act ("Rule
10b-6A"), which provides an exemption from such prohibition for certain
passive market making transactions. Such passive market making transactions
must comply with applicable price and volume limits and must be identified as
passive market making transactions. In general, pursuant to Rule 10b-6A, a
passive market maker must display its bid for a security at a price not in
excess of the highest independent bid for the security. If all independent
bids are lowered below the passive maker's bid, however, such bid must then be
lowered when certain purchase limits are exceeded. Further, net purchases by a
passive market maker on each day are generally limited to a specified
percentage of the passive market maker's average daily trading volume in a
security during a specified prior period and must be discontinued when such
limit is reached. Pursuant to the exemption provided by Rule 10b-6A, certain
of the Underwriters and selling group members may engage in passive market
making in the Common Shares during the Cooling Off Period. Passive market
making may stabilize the market price of the Common Shares at a level above
that which might otherwise prevail, and, if commenced, may be discontinued at
any time.

Smith Barney Inc., Lazard Freres & Co. LLC and Morgan Stanley & Co.
Incorporated have provided investment banking and financial advisory services
to the Company and certain of the Founding Shareholders.

LEGAL MATTERS

The validity of the Common Shares under Bermuda law will be passed upon for
the Company by Conyers, Dill & Pearman, Hamilton, Bermuda. Certain legal
matters in connection with the Offerings will be passed upon for the Company
by Mayer, Brown & Platt, Chicago, Illinois, and for the Underwriters by
LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited liability partnership
including professional corporations, New York, New York, in each case in
reliance on the opinion of Conyers, Dill & Pearman with respect to Bermuda
law.

EXPERTS

The consolidated financial statements and schedules of Holdings as of
September 30, 1996 and 1995 and for the years ended September 30, 1996 and
1995 and the period October 26, 1993 (date of incorporation) to September 30,
1994 have been included herein and in the Registration Statement in reliance
upon the reports of KPMG Peat Marwick, independent auditors, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.

78
<PAGE>

GLOSSARY OF SELECTED INSURANCE AND REINSURANCE TERMS

Acquisition costs. Brokerage, commissions, the portion of administrative,
general and other expenses attributable to underwriting operations and excise
taxes.

Alien reinsurer. A reinsurance company that is organized under the laws of a
non-U.S. jurisdiction.

Attachment point. The amount of losses above which excess of loss
reinsurance becomes operative.

Broker. A person or firm that negotiates contracts of reinsurance between a
ceding company and a reinsurer on behalf of the ceding company and receives a
brokerage commission for placement of the reinsurance contract as well as
other services rendered.

Casualty insurance and/or reinsurance. Insurance and/or reinsurance that is
concerned primarily with the legal liability of the insured for injuries or
damage to the person or property of third persons (persons other than the
policyholder).

Cede; ceding company; cedent; cession. When an insurance or reinsurance
company transfers all or a portion of a risk it has underwritten to a
reinsurance company, it "cedes" such risk and is referred to as the "ceding
company" or the "cedent." Such transfer of risk is referred to as a "cession."

Clash exposure. The exposure of an insurer or reinsurer to losses arising
from a single set of circumstances but covered by more than one insurance or
reinsurance contract underwritten by such insurer or reinsurer.

Combined ratio. The sum of the loss and loss expense ratio and the expense
ratio. A combined ratio below 100% generally indicates profitable underwriting
prior to the consideration of investment income. A combined ratio over 100%
generally indicated unprofitable underwriting prior to the consideration of
investment income.

Excess of loss reinsurance. The generic term describing reinsurance that
indemnifies the ceding company against all or a specified portion, the
"limit," of losses on underlying insurance policies or reinsurance contracts
in excess of a specified dollar amount, called "attachment point" or
"retention." The combination of a limit and an attachment point constitutes a
layer.

Expense ratio. The ratio of (i) acquisition costs and operational expenses
minus net gains on foreign exchange to (ii) earned premiums, determined in
accordance with GAAP.

Facultative Reinsurance--The reinsurance of part or all of (the insurance
provided by) a single policy, with separate negotiation for each cession. The
word "facultative" connotes that both the primary insurer and the reinsurer
have the faculty or option of accepting or rejecting the individual submission
(as distinguished from the obligation to cede and accept, to which the parties
agree in treaty reinsurance).

Generally accepted accounting principles ("GAAP"). Accounting principles as
set forth in opinions of the Accounting Principle Board of the American
Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
that are applicable to the circumstances as of the date in question.

Gross premiums written. Total premiums for insurance and reinsurance assumed
during a given period.

Incurred but not reported ("IBNR") loss reserves. Reserves for losses that
have been incurred but not yet reported to the insurer or reinsurer and which
are often estimated using actuarial analysis.

Incurred losses. The total losses sustained by an insurer or reinsurer under
its policies or contracts, whether paid or unpaid. Incurred losses include a
provision for claims that have occurred but have not yet been reported to the
insurer or reinsurer ("IBNR").

Layer. See "Excess of loss reinsurance."

79
<PAGE>

Lloyd's. Lloyd's of London, the formal name of which is "Underwriters at
Lloyd's, London", is an organization for underwriting insurance and
reinsurance in which collections of individuals (referred to as "Names") and
certain corporations assume policy liabilities as the individual obligations
of each.

Loss expenses. The expenses of adjusting, defending and settling claims,
including legal and other fees and the portion of general expenses allocated
to claim settlement costs.

Loss and loss expense ratio. The ratio of (i) incurred losses and loss
expenses to (ii) earned premiums, determined in accordance with GAAP.

Loss reserves. Liabilities established by insurers and reinsurers to reflect
the estimated cost of claims payments that the insurer or reinsurer ultimately
will be required to pay in respect of insurance or reinsurance it has written.
Reserves are established for losses and loss expenses, and consist of case
reserves and IBNR reserves.

Net premiums earned. The portion of net premiums written that is recognized
for accounting purposes as income during a period.

Net premiums written. Gross premiums written for a given period less
premiums ceded to reinsurers during such period.

Program. A treaty or a combination of treaties that provide the cedent with
one or more layers of reinsurance protection.

Property catastrophe reinsurance. A form of excess of loss reinsurance that,
subject to a specified limit, indemnifies the ceding company for the amount of
loss in excess of a specified retention with respect to an accumulation of
losses resulting from a catastrophic event. The reinsurance contract is called
a "catastrophe cover."

Property insurance and/or reinsurance. Insurance and/or reinsurance that
indemnifies a person with an insurable interest in tangible property for its
loss, damage or loss of use.

Pro rata of reinsurance. A generic term describing forms of reinsurance in
which the reinsurer shares a proportional part of the original premiums and
losses of the ceding company. Pro rata reinsurance is also known as
proportional or quota share reinsurance.

Reinstatement. The restoration of the reinsurance limit, under an excess of
loss treaty, for any portion of the original limit depleted by losses incurred
on that treaty by the reinsurer. The reinstatement applies for the remainder
of the duration of the treaty, or until depleted by further losses.

Reinstatement premium. Premium paid by a primary insurer to a reinsurer to
reinstate coverage under an excess of loss treaty.

Reinsurance. The practice whereby one party, called the reinsurer, in
consideration of a premium paid to it, agrees to indemnify another party,
called the reinsured, for part or all of the liability assumed by the
reinsured under a policy or policies of insurance that it has issued or
contract(s) of reinsurance it has written. The reinsured may be referred to as
the ceding company. The purchase of reinsurance does not legally discharge the
ceding company from its liability to its insureds or reinsureds.

Retention; retention layer. The amount or portion of risk that an insurer or
reinsurer retains for its own account. Losses in excess of the retention are
paid by that company's reinsurer or retrocessionaire. The retention can be
expressed as a dollar amount or a percentage of the amount at risk.

80
<PAGE>

Retrocession; retrocessionaire. A transaction whereby a reinsurer cedes to
another reinsurer (the "retrocessionaire") all or part of the reinsurance it
has assumed. Retrocessions (as is the case with any reinsurance) do not
legally discharge the ceding reinsurer from its liability to its reinsured.

Treaty reinsurance; treaty. Reinsurance of a specified type or category of
risk defined in a reinsurance agreement (a "treaty") between a ceding company
and a reinsurer. Typically, in treaty reinsurance the ceding company is
obligated to offer and the reinsurer is obligated to accept a specified
portion of all such type or category of risks originally insured or reinsured
by the ceding company.

Underwriting. The process of reviewing applications submitted for insurance
or reinsurance coverage, deciding whether to accept all or part of the
coverage requested and determining the applicable premiums and coverage
conditions.

Unearned premiums. Premiums written but not yet earned, as they are
attributable to the unexpired portion of the related contract term.

Unearned premium reserve. Liabilities established in respect of unearned
premiums.

Zonal exposure. The calculation of an insurer's or reinsurer's exposure to
insured losses arising from a single event or series of events (i.e., storms,
earthquakes, etc.) occurring within a specified geographic area. The insurer
or reinsurer establishes its own definition of zones and determines the amount
of insured risk it is willing to assume in each such zone and from all such
zones combined.

81
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Auditors.............................................. F-2
Consolidated Balance Sheets................................................. F-3
Consolidated Statements of Operations....................................... F-4
Consolidated Statements of Changes in Shareholders' Equity.................. F-5
Consolidated Statements of Cash Flows....................................... F-6
Notes to Consolidated Financial Statements.................................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders of
LaSalle Re Holdings Limited.

We have audited the accompanying consolidated balance sheets of LaSalle Re
Holdings Limited as at September 30, 1996 and 1995 and the related
consolidated statements of operations, changes in shareholders' equity and
cash flows for the years ended September 30, 1996 and 1995 and the period from
October 26, 1993 (date of incorporation) to September 30, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of LaSalle Re
Holdings Limited and its subsidiaries as at September 30, 1996 and 1995 and
the results of their operations, and their cash flows for the years ended
September 30, 1996 and 1995 and the period from October 26, 1993 (date of
incorporation) to September 30, 1994 in conformity with United States
generally accepted accounting principles.

KPMG Peat Marwick
Chartered Accountants

Hamilton, Bermuda
October 19, 1996

F-2
<PAGE>

LASALLE RE HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE
DATA)

<TABLE>
<CAPTION>
ASSETS 1996 1995
------ -------- --------
<S> <C> <C>
Cash and cash equivalents.................................. $ 46,990 $ 82,360
Investments held as available for sale at fair value (Note
3 (a))
(amortized cost 1996: $493,450; 1995: $441,705)........... 490,514 440,065
Accrued investment income.................................. 14,211 15,803
Reinsurance balances receivable (Note 7) (related party
1996: $11,700; 1995: $25,206)............................. 70,625 86,146
Deferred acquisition costs................................. 10,464 10,708
Other assets (Note 4)...................................... 1,570 1,465
-------- --------
Total assets........................................... $634,374 $636,547
======== ========
<CAPTION>
LIABILITIES
-----------
<S> <C> <C>
Reserve for losses and loss expenses (Note 9).............. $ 49,875 $ 66,654
Unearned premium reserve................................... 82,894 87,885
Other liabilities (Notes 6 & 7) (related party 1996:
$6,080; 1995: $6,076)..................................... 11,087 6,197
Dividend payable .......................................... 3,600 75,000
-------- --------
Total liabilities...................................... 147,456 235,736
-------- --------
Minority interest (Note 1)................................. $179,470 $147,389
-------- --------
Shareholders' equity
Share capital (Note 5)................................... $ 14,398 $ 14,398
Additional paid in capital (Note 5)...................... 221,968 221,968
Unrealized loss on investments (Note 3 (a)).............. (1,861) (1,039)
Retained earnings........................................ 72,943 18,095
-------- --------
Total shareholders' equity............................. 307,448 253,422
-------- --------
Total liabilities, minority interest and shareholders'
equity................................................ $634,374 $636,547
======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-3
<PAGE>

LASALLE RE HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND THE PERIOD FROM OCTOBER 26, 1993 TO
SEPTEMBER 30, 1994
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE
DATA)

<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES
Premiums written (Notes 7, 8 & 13) (related $ 190,151 $ 201,916 $ 133,327
party 1996: $24,045; 1995: $28,836; 1994:
$24,186) .................................
Change in unearned premiums................ 4,990 (31,546) (56,338)
---------- ---------- ----------
Net premiums earned........................ 195,141 170,370 76,989
Net investment income (Note 3(b)).......... 26,846 25,091 15,758
Net realized losses on investments (Note
3(b))..................................... (418) (25) (19)
---------- ---------- ----------
Total revenues......................... 221,569 195,436 92,728
---------- ---------- ----------
EXPENSES
Losses and loss expenses incurred (Note 9). 51,477 60,397 49,801
Underwriting expenses (Note 7) (related
party 1996: $10,419; 1995: $8,524; 1994:
$3,183)................................... 27,268 22,988 8,686
Operational expenses (Note 7) (related
party 1996: $6,500; 1995: $4,500; 1994:
$2,798) .................................. 11,114 6,218 4,066
Corporate expenses......................... 911 1,145 1,866
Interest expense........................... 222 0 0
Exchange loss/(gain)....................... 1,126 240 (1,590)
---------- ---------- ----------
Total expenses......................... 92,118 90,988 62,829
---------- ---------- ----------
Income before minority interest............ 129,451 104,448 29,899
Minority interest (Note 1)................. 47,966 38,774 10,958
---------- ---------- ----------
Net income................................. $ 81,485 $ 65,674 $ 18,941
========== ========== ==========
Net income per share....................... $ 5.40 $ 4.51 $ 1.31
========== ========== ==========
Weighted average number of Common Share and
common share equivalents outstanding...... 23,967,870 23,170,680 22,852,910
========== ========== ==========
</TABLE>

See accompanying notes to consolidated financial statements

F-4
<PAGE>

LASALLE RE HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND THE PERIOD FROM OCTOBER 26, 1993 TO
SEPTEMBER 30, 1994
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE
DATA)

<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
COMMON SHARES PAR VALUE $1
Balance at beginning of period................... $ 14,398 $ 14,396 $ 0
Issuance of shares............................... 0 2 14,396
-------- -------- --------
Balance at end of period......................... $ 14,398 $ 14,398 $ 14,396
======== ======== ========
ADDITIONAL PAID IN CAPITAL
Balance at beginning of period................... $221,968 $221,945 $ 0
Proceeds on issue of shares in excess of par
value........................................... 0 23 221,945
-------- -------- --------
Balance at end of period......................... $221,968 $221,968 $221,945
======== ======== ========
UNREALIZED LOSS ON INVESTMENTS
Balance at beginning of period................... $ (1,039) $(11,836) $ 0
Unrealized (loss)/gain in period................. (822) 10,797 (11,836)
-------- -------- --------
Balance at end of period......................... $ (1,861) $ (1,039) $(11,836)
======== ======== ========
RETAINED EARNINGS
Balance at beginning of period................... $ 18,095 $ 18,941 $ 0
Net income....................................... 81,485 65,674 18,941
Dividends........................................ (26,637) (66,520) 0
-------- -------- --------
Balance at end of period......................... $ 72,943 $ 18,095 $ 18,941
======== ======== ========
TOTAL SHAREHOLDERS' EQUITY....................... $307,448 $253,422 $243,446
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-5
<PAGE>

LASALLE RE HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND THE PERIOD FROM OCTOBER 26, 1993 TO
SEPTEMBER 30, 1994
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE
DATA)

<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................... $ 81,485 $ 65,674 $ 18,941
Adjustments to reconcile net income to cash
provided by operating activities:
Minority interest in net income............ 47,966 38,774 10,958
Amortization of investment premium......... 3,280 4,535 3,438
Net loss on sale of investments............ 418 25 19
Unrealized loss/(gain) on foreign exchange. 590 (153) (1,319)
Changes in:
Accrued investment income.................. 1,592 (2,294) (13,509)
Reinsurance balances receivable............ 15,412 (35,745) (48,987)
Deferred acquisition costs................. 244 (3,898) (6,809)
Other assets............................... (105) (404) (1,061)
Reserve for losses and loss expenses....... (16,748) 28,923 37,789
Unearned premium reserve................... (4,991) 31,546 56,338
Other liabilities.......................... 2,294 3,187 3,012
--------- --------- ---------
Cash provided by operating activities........ 131,437 130,170 58,810
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments...................... (270,287) (108,796) (381,826)
Net sales/(purchases) of short term
investments................................. 47 2,654 (42,247)
Proceeds on the sale of marketable
securities.................................. 170,296 50,198 5,293
Proceeds on the maturity of marketable
securities.................................. 44,500 25,000 0
--------- --------- ---------
Cash applied to investing activities......... (55,444) (30,944) (418,780)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of dividends......................... (111,363) (30,003) 0
Subscription to share capital................ 0 39 373,068
--------- --------- ---------
Cash (applied to) provided by financing
activities.................................. (111,363) (29,964) 373,068
--------- --------- ---------
Net (decrease)/increase in cash and cash
equivalents................................. (35,370) 69,262 13,098
Cash and cash equivalents at beginning of
period...................................... 82,360 13,098 0
--------- --------- ---------
Cash and cash equivalents at end of period... $ 46,990 $ 82,360 $ 13,098
========= ========= =========
</TABLE>

See accompanying notes to consolidated financial statements

F-6
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 1996, 1995 AND THE PERIOD FROM OCTOBER 26, 1993 TO
SEPTEMBER 30, 1994
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE
DATA)

1. GENERAL

The Company was incorporated on September 20, 1995 under the laws of Bermuda
to act as an investment holding company.

LaSalle Re Limited ("LaSalle Re") was incorporated on October 26, 1993 under
the laws of Bermuda and commenced operations on November 22, 1993. The Company
is licensed under the Insurance Act, 1978 as amended by the Insurance
Amendment Act, 1995 of Bermuda to write insurance business and operates as a
multi-line reinsurance company, with emphasis on property catastrophe
business.

Property catastrophe reinsurance covers unpredictable events such as
hurricanes, windstorms, hailstorms, earthquakes, fires, industrial explosions,
freezes, riots, floods and other man-made or natural disasters. Because the
Company has large aggregate exposures to these risks, the Company expects that
its claims experience will be characterized by relatively low frequency and
high severity claims. The occurrence of claims from catastrophic events is
likely to result in substantial volatility in the Company's financial results
for any particular period. The Company endeavors to manage its exposures to
catastrophic events by limiting the amount of its exposure in each geographic
zone worldwide and requiring that its property catastrophe contracts provide
for aggregate limits and attachment points.

On August 26, 1994, LaSalle Re incorporated a subsidiary company in the
United Kingdom, LaSalle Re (Services) Limited, to act as a representative
office for the Company. In addition, on June 11, 1996, LaSalle Re incorporated
a subsidiary company in Bermuda, LaSalle Re Corporate Capital Ltd., to act as
an investment holding company.

In November 1995, the Company and LaSalle Re consummated an offer (the
"Exchange Offer") pursuant to which, among other things, the founding
shareholders of the Company (the "Founding Shareholders") exchanged their
capital stock of LaSalle Re for common shares of the Company (the "Common
Shares") and, in certain circumstances, exchangeable non-voting shares of
LaSalle Re (the "Exchangeable Non-Voting Shares"). The Exchangeable Non-Voting
Shares are held by certain Founding Shareholders who would otherwise hold, or
cause another shareholder to hold, directly, indirectly or constructively, in
excess of 9.9% of the voting power of the Company or LaSalle Re. The
Exchangeable Non-Voting Shares are exchangeable, at the option of the holder,
for Common Shares on a one-for-one basis, unless the board of directors of the
Company determines such exchange may cause actual or potential adverse tax
consequences to the Company or any shareholder. The Exchangeable Non-Voting
Shares will at all times rank as to assets, dividends and in all other
respects on a parity with the common shares of LaSalle Re except that they do
not have the right to vote on any matters except as required by Bermuda law
and in connection with certain actions by the Company.

On November 27, 1995, the Company and certain Founding Shareholders also
consummated an initial public offering of 4,312,500 Common Shares (the
"Offerings"). Of these shares, 2,920,500 were sold by founding shareholders
and 1,392,000 by the Company. The proceeds from the sale of 1,392,000 shares
sold by the Company were used to enable LaSalle Re to redeem shares of its
capital stock (the "Redemption").

Since the consummation of the Exchange Offer, the Offerings and the
Redemption, the Company has owned 100% of the outstanding voting stock which
constitutes approximately 63% of the outstanding capital stock of LaSalle Re.
The minority interest represents approximately the 37% interest in LaSalle Re
not owned by the Company.

The Exchange Offer was accounted for as if it were a pooling of interests of
combining enterprises under common control. The consolidated financial
statements include the results of the Company and the Company's share of
LaSalle Re and its subsidiaries for all periods presented.

F-7
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements are prepared in
accordance with United States generally accepted accounting principles
("GAAP"). The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
and disclosed amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates. The estimates most susceptible to
significant change are those used in determining the reserve for unpaid losses
and loss expenses and ultimate premium written.

The following are the significant accounting policies adopted by the
Company:

(a) Principles of consolidation

The consolidated financial statements include the financial statements of
LaSalle Re Holdings Limited, LaSalle Re Limited and its subsidiaries, LaSalle
Re (Services) Limited and LaSalle Re Corporate Capital Ltd. All significant
intercompany balances and transactions have been eliminated in consolidation.

(b) Premiums earned and deferred acquisition expenses

Premiums written are estimated by management based upon reports received
from ceding companies. These estimates are subject to review with adjustments
recorded in the period in which the actual amounts are determined. Premiums on
property catastrophe excess of loss contracts are earned on a pro rata basis
over the period the coverage is provided, which is generally 12 months. Under
pro rata property catastrophe contracts, the risks underlying the contracts
incept throughout the policy period and premiums generally are earned over an
18 month period. Unearned premiums represent the portion of premiums written
which is applicable to the unexpired terms of the policies in force.

Acquisition costs, mainly brokerage, commissions, underwriting fees and
excise taxes related to unearned premiums are deferred and amortized to income
over the period in which the premiums are earned. Future earned premiums and
anticipated losses and loss adjustment expenses related to those premiums are
considered in determining the recoverability of deferred acquisition costs.
The Company does not consider anticipated future investment income in
determining if a premium deficiency exists.

The reserve for losses and loss expenses is based on reports and individual
case estimates received from ceding companies. An amount is included for
losses and loss expenses incurred but not reported on the basis of reports
received from ceding companies and an internally produced actuarial analysis.

Given the inherent nature of major catastrophic events, considerable
uncertainty underlies the assumptions and associated estimated reserves for
losses and loss expenses. These estimates are reviewed regularly and, as
experience develops and new information becomes known, the reserves are
adjusted as necessary. Such adjustments if any, are reflected in results of
operations in the period in which they are determined and are accounted for as
changes in estimates. Due to the inherent uncertainty in estimating reserves
for losses and loss expenses there can be no assurance that the ultimate
liability will not exceed recorded amounts, with a resulting material effect
on the Company. Based on the current assumptions used in calculating reserves,
management believes that the Company's reserve levels are adequate to meet its
future obligations.

Reserves are recorded without consideration of potential salvage or
subrogation recoveries which are estimated to be immaterial. Such recoveries,
when realized, are reflected as a reduction of losses incurred.

F-8
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(d) Investments

The Company's investments comprise fixed interest securities and short term
investments, such as certificates of deposit or commercial paper. All
investments are considered to be available for sale under the definition
included in Statement of Financial Accounting Standards No. 115. As such, they
are reported at fair value with unrealized gains and losses reported as a
separate component of shareholders' equity, net of amounts attributable to
minority interests.

Purchases and sales of investments are accounted for on the trade date of
the transaction.

(e) Investment income

Investment income, net of investment expenses, is accrued to the balance
sheet date and includes amortization of premiums and discounts relative to
fixed interest securities purchased at prices different to par value.

Realized gains or losses on sales of investments are determined on the basis
of specific identification and are included as part of net investment income
in the statements of operations.

(f) Translation of foreign currencies

The U.S. dollar is the Company's functional currency. Foreign currency
monetary assets and liabilities are translated at exchange rates in effect at
the balance sheet date. Unearned premiums and deferred acquisition costs are
translated at historic exchange rates. Foreign currency revenues and expenses
are translated at the exchange rates in effect at the date of the transaction.
Exchange gains and losses are included in the determination of net income.

The Company enters into foreign exchange contracts to manage the currency
risks associated with the receipt of non-U.S. dollar insurance premiums.
Realized and unrealized gains and losses on these contracts are included in
the determination of net income.

(g) Fair value of financial statements

Fair value disclosures with respect to certain financial instruments are
separately included herein, where appropriate.

The carrying values of other financial instruments, including cash and cash
equivalents, reinsurance balances receivable, accrued investment income,
promissory note receivable and other liabilities approximate their fair value
due to the short term nature of the balances.

(h) Corporate expenses

Corporate expenses are expensed as they are incurred on an accruals basis.

(i) Cash and cash equivalents

For the purposes of the statements of cash flows, the Company considers all
time deposits and certificates of deposit with an original maturity of 90 days
or less as equivalent to cash.

F-9
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(j) Stock incentive compensation plans

The Company accounts for stock option grants in accordance with APB opinion
No. 25, Accounting for Stock Issued to Employees, and, accordingly, recognizes
compensation expense for stock option grants to the extent that the fair value
of the stock exceeds the exercise price of the option at the measurement date.
Any resulting compensation expense is recorded over the shorter of the vesting
or service period.

(k) Income per common share

Net income per common share is calculated by dividing net income by the
weighted average number of common shares and common share equivalents
outstanding during the period. The Exchangeable Non-Voting Shares in LaSalle
Re are considered common share equivalents as are stock options and stock
appreciation rights which are included in the computation of weighted average
number of common shares outstanding using the treasury stock method. There is
no material difference between primary and fully diluted net income per common
share.

3. INVESTMENTS

(a) All fixed interest securities and short term investments are considered
available for sale. The fair values are based on quoted market prices at the
reporting date for those, or similar, investments. As of September 30, 1996
and 1995, the fair values and amortized costs of investments are as follows:

<TABLE>
<CAPTION>
AMORTIZED UNREALIZED UNREALIZED FAIR
1996 COST GAINS LOSSES VALUE
- ---- --------- ---------- ---------- --------
<S> <C> <C> <C> <C>
U.S. government and agencies........... $ 90,596 $ 221 $ (693) $ 90,124
Non U.S. government and agencies....... 75,863 258 (828) 75,293
Corporate.............................. 326,991 1,077 (2,971) 325,097
-------- ------ ------- --------
$493,450 $1,556 $(4,492) $490,514
======== ====== ======= ========
<CAPTION>
AMORTIZED UNREALIZED UNREALIZED FAIR
1995 COST GAINS LOSSES VALUE
- ---- --------- ---------- ---------- --------
<S> <C> <C> <C> <C>
U.S. government and agencies........... $ 4,988 $ 0 $ (57) $ 4,931
Non U.S. government and agencies....... 63,208 672 (589) 63,291
Corporate.............................. 373,509 2,950 (4,616) 371,843
-------- ------ ------- --------
$441,705 $3,622 $(5,262) $440,065
======== ====== ======= ========
</TABLE>

The unrealized loss on investments as shown on the consolidated balance
sheet of $1,861 (1995: $1,039) is net of the minority's interest of $1,075
(1995: $601).

Investments held at September 30, 1996 mature as follows:

<TABLE>
<CAPTION>
AMORTIZED
COST FAIR VALUE
--------- ----------
<S> <C> <C>
Less than 1 year..................................... $100,034 $ 99,819
1-5 years............................................ 334,252 331,808
5-10 years........................................... 59,164 58,887
-------- --------
$493,450 $490,514
======== ========
</TABLE>

The following table summarized the composition of the fair value of
available for sale securities by ratings assigned or, with respect to non-
rated issues, as estimated by the Company's investment managers.

F-10
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

In the normal course of reinsurance operations, the Company's bankers have
issued letters of credit totalling $15,511 (1995: $15,704) in favor of ceding
insurance companies to secure the Company's obligations under various
reinsurance contracts. At September 30, 1996, $17,837 (1995: $18,059) of fixed
interest securities have been pledged as collateral for these letters of
credit.

(b) Net investment income

Net investment income for the years ended September 30, 1996, 1995 and the
period ended September 30, 1994 is derived from the following sources:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Cash and short term investments..................... $ 1,443 $ 2,558 $ 2,379
U.S. government and agencies fixed interest
securities......................................... 1,631 107 0
Non U.S. government and agencies fixed interest
securities......................................... 4,702 3,224 1,877
Corporate fixed interest securities................. 20,197 20,288 12,315
Gross realized losses............................... (418) (25) (19)
------- ------- -------
Gross investment income............................. 27,555 26,152 16,552
Investment expenses (Note 7)........................ (1,127) (1,086) (813)
------- ------- -------
Net investment income............................... $26,428 $25,066 $15,739
======= ======= =======
</TABLE>

Included in gross investment income for the year ended September 30, 1996
was a charge of $3,280 (1995: $4,535; 1994: $3,438) relating to the
accretion/amortization of investment premium.

The change in net unrealized losses, net of the minority's interest, that
has been included as a separate component of shareholders' equity for the year
ended September 30, 1996 was an increase of $822 (decrease 1995: $10,797;
increase 1994: $11,836).

Proceeds received from the sale of available for sale securities in the
period ended September 30, 1996 were $170,296 (1995: $50,198; 1994: $5,293).

4. OTHER ASSETS

Included in other assets is a promissory note receivable. In connection with
the terms of the Chief Executive Officer's five year employment contract,
LaSalle Re advanced $695 to him for the purpose of purchasing a property in
Bermuda. The advance is evidenced by a promissory note which is secured upon
the title deeds of the property. The promissory note bears interest at the
rate of 8% per annum and is repayable in full at the earlier of the
termination date of the Chief Executive Officer's employment contract or the
date of sale of the property. Under the employment contract LaSalle Re will
assume any gain or loss on the disposition of the property.

F-11
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. SHARE CAPITAL AND ADDITIONAL PAID-IN CAPITAL

The authorized share capital of the Company is 100,000,000 Common Shares of
par value $1 each. As of September 30, 1996 and 1995, the following shares
have been issued and fully paid.

<TABLE>
<CAPTION>
1996 & 1995
----------------------------------
NUMBER OF
SHARES SHARE ADDITIONAL
ISSUED CAPITAL PAID IN CAPITAL
---------- ------- ---------------
<S> <C> <C> <C>
Common Shares................................ 14,397,720 $14,398 $221,968
========== ======= ========
</TABLE>
During the year, the Company established an Employee Stock Purchase Plan
(the "Plan"). Under the Plan, the Company is authorized to sell up to 150,000
Common Shares at a discount equivalent to 15% of the market price, to eligible
employees of the Company and its subsidiaries, and other persons providing
services to those companies. The maximum investment by an employee is $25 per
calendar year. As at September 30, 1996, no shares had been issued in respect
of the Plan.

6. SHARE PURCHASE OPTIONS AND STOCK APPRECIATION RIGHTS

(a) Non-compensatory

The Company has issued options to purchase 136,350 common shares to certain
shareholders and their affiliates. In addition, LaSalle Re has issued options
to purchase 2,199,780 Exchangeable Non-Voting shares. The options became
exercisable on October 1, 1996 and may be exercised until November 22, 2003.

The original exercise price of the options was $16.67 per share, which was
equal to the fair value of the Company's shares at the grant date, minus
dividend adjustments. The current exercise price is $10.45. As the options
were granted to certain of the Founding Shareholders and their affiliates as
an inducement to purchase stock in LaSalle Re, no compensation expense has
been recorded in connection with the options.

(b)(i) Compensatory--Stock Appreciation Rights

In consideration for entering into an employment agreement with LaSalle Re,
the Company's Chief Executive Officer was granted a total of 340,872 Stock
Appreciation Rights (SARs) during 1994. Upon exercise, the SAR's entitle the
Executive to a cash payment equal to the SARs value as of the exercise date.
Alternatively, at the Company's sole discretion, the SARs will entitle the
Executive to either (i) the number of common shares in LaSalle Re Holdings
Limited equal to the aggregate value of the SAR's divided by the fair value of
a common share at the exercise date, or (ii) upon payment of the base value
for each SAR, the number of common shares equal to the number of SARs
exercised. Any common shares taken up through the exercise of the SARs shall
rank equally with the other common shares.

The value of each SAR equals the fair market value of a common share of
LaSalle Re Holdings less the base value on the exercise date, subject to anti-
dilution adjustments. The fair market value shall be determined by the board
of directors of the Company, but shall be based on the market price of the
common shares. The base value of each SAR was $16.67, minus dividend
adjustments. The current exercise price is $10.45.

F-12
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

A percentage of these SARs may become exercisable on January 1 of each of
1997, 1998 or 1999. These percentages vary depending on the internal rate of
return achieved during the period from November 22, 1993 through to the date
of exercise and ending on March 30, 2004 or, if earlier, two years after the
Chief Executive Officer's termination of employment. SARs will not be
exercisable unless a targeted internal rate of return of at least 18% per
annum is achieved during the entire measurement period. This is based upon the
financial performance of LaSalle Re from inception to November 27, 1995 and
LaSalle Re Holdings' consolidated performance from that date forward. At
September 30, 1996, the Company's internal rate of return has exceeded 18% and
therefore the Company has charged an expense of $909 (1995: $240; 1994: $Nil).

(b)(ii) Compensatory--Options

In November 1995, the Company adopted a Long Term Incentive Plan (the
"Incentive Plan") which permits the award of various incentives to employees
of the Company, its subsidiaries and other persons providing services to those
companies.

Under the Incentive Plan, the Company granted options for 163,218 common
shares during the year ended September 30, 1996. The options vest rateably in
five annual instalments over 5 years from the grant date. The options can be
exercised over a 10 year period, commencing on the vesting date. As of
September 30, 1996, no options were exercisable. The original exercise price
was $19.25 per share. The current exercise price is $18.75 as adjusted for
dividends. The options were granted at the fair value of the Company's shares
at the grant date.

The Company applies APB Opinion 25 and Related Interpretations in accounting
for the Incentive Plan. Accordingly, no compensation cost has been recognized.
Had compensation cost been determined based on the fair value at the grant
date of the options consistent with the method of SFAS 123, the net income and
earnings per share would have been reduced to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>
1996
-------
<S> <C> <C>
Net Income........................................... As reported $81,485
Pro forma $81,465
Primary earnings per share........................... As reported $ 5.40
Pro forma $ 5.40
</TABLE>

The fair value of the option grants are estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions:
dividend yield of 10% per annum; expected volatility of 9%; and a risk free
interest rate of 5.2%.

7. RELATED PARTY TRANSACTIONS

In addition to the share purchase options discussed in Note 6, LaSalle Re
has entered into the following transactions and agreements with companies
related to the Founding Shareholders:

(a) Premiums written

During the year ended September 30, 1996, LaSalle Re assumed premiums
written of approximately $24,045 (1995: $28,836; 1994: $24,186) from a ceding
company related to a shareholder of LaSalle Re. In addition, LaSalle Re
assumed premiums totalling $23,577 (1995: $22,057; 1994: $14,163) through
brokers related to a shareholder of LaSalle Re. Brokerage fees incurred in
respect of this business were approximately $2,357 (1995: $2,206; 1994:
$1,416). All such transactions were undertaken on normal commercial terms.
Reinsurance balances receivable at the balance sheet date include $11,700
(1995: $25,206) due from such related parties.

F-13
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(b) Underwriting services

LaSalle Re is party to an underwriting services agreement with CNA (Bermuda)
Services Limited ("CNA Bermuda"). Under this agreement, LaSalle Re has granted
CNA Bermuda the authority to provide underwriting services and to underwrite
all classes of insurance and reinsurance as agents for LaSalle Re. LaSalle Re
has agreed to pay fees to CNA Bermuda as follows:

With effect from January 1, 1996:

(i) 1.5% of the gross written and collected premium per fiscal year; and

(ii) An underwriting profit commission equal to 4.0% of the aggregate net
underwriting profits of LaSalle Re, where certain conditions are met.

Prior to January 1, 1996:

(i) 2.0% of the gross written and collected premium per fiscal year, up
to premium of $150,000 plus 1.5% of the gross written and collected premium
in excess of $150,000; and

(ii) An underwriting profit commission equal to 2.5% of the aggregate net
underwriting profits of LaSalle Re, where certain conditions are met.

The Company has incurred $3,081 (1995: $3,411; 1994: $1,465) for
underwriting services provided for the year ended September 30, 1996, of which
$2,482 (1995: $3,629) was payable at September 30, 1996.

The Company has incurred $4,140 (1995: $2,186; 1994: $Nil) for underwriting
profit commission for the year ended September 30, 1996, of which $3,350 was
payable at September 30, 1996 (1995: $2,186).

LaSalle Re is party to an agreement with Aon Risk Consultants (Bermuda)
Limited ("ARC Bermuda"). Under this agreement ARC Bermuda performs certain
actuarial and administrative services on behalf of the Company. LaSalle Re has
agreed to pay management fees to ARC Bermuda as follows:
<TABLE>
<CAPTION>
CALENDAR YEAR
-------------
<S> <C>
1993............................................. $ 548 (pro rata basis)
1994............................................. $3,000
1995............................................. $5,000
1996............................................. $7,000
</TABLE>

Beginning on January 1, 1997, the management fees payable to ARC Bermuda
will be:

(i) $3,300 per annum; and

(ii) an underwriting profit commission equal to 2.75% of the aggregate
net underwriting profit of LaSalle Re, where certain conditions are met.

(d) Investment management services

LaSalle Re is party to an agreement with Aon Advisors (UK) Limited ("Aon
UK") to provide investment management services. LaSalle Re has agreed to pay
fees to Aon UK based on the average daily balance of the investment portfolio
of the preceding quarter, as follows:

<TABLE>
<CAPTION>
PORTFOLIO BALANCE ANNUAL FEE IN BASIS POINTS
----------------- --------------------------
<S> <C>
$0 through $100,000............................ 35
Excess of $100,000 through $200,000............ 25
Excess of $200,000............................. 15
</TABLE>

F-14
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company has incurred $1,028 (1995: $987; 1994: $752) for services
provided for the year ended September 30, 1996, of which $272 (1995: $261) was
payable at September 30, 1996.

(e) Claims handling services

LaSalle Re is party to an agreement with Integrated Runoff Insurance
Services Corporation ("IRISC") whereby IRISC performs certain claims handling
services for LaSalle Re. LaSalle Re has agreed to pay the following minimum
fees to IRISC:

<TABLE>
<CAPTION>
CALENDAR YEAR
-------------
<S> <C>
1994................................................................ $50
1995................................................................ $53
1996................................................................ $56
</TABLE>

The agreement provides for additional fees to be payable if services
provided exceed a certain "base level". Fees in excess of this "base level"
are calculated on an hourly rate.

The Company has incurred $92 (1995: $78; 1994: $47) for services provided
for the year ended September 30, 1996, of which $Nil (1995: $Nil) was payable
at the balance sheet date.

8. CONCENTRATION OF CREDIT RISK

A broker who is unrelated to the Company, arranged more than 16% of the
Company's premiums written for the year ended September 30, 1996 (1995: 21%;
1994: 20%). Another broker who is related to the Company arranged more than
12% (1995: 10%; 1994; 11%). Approximately 13% (1995: 15%; 1994: 18%) of the
gross premiums written for the year ended September 30, 1996 were ceded by
related companies.

9. RESERVE FOR LOSSES AND LOSS EXPENSES

Activity in the reserve for losses and loss expenses during the periods
ended September 30, 1996, 1995 and 1994 is summarized as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Balance as of October 1.............................. $66,654 $37,789 $ 0
------- ------- -------
Incurred related to:
Current year....................................... 31,910 52,587 49,801
Prior year events.................................. 19,567 7,810 0
------- ------- -------
51,477 60,397 49,801
------- ------- -------
Paid related to:
Current year....................................... (10,222) (7,572) (12,012)
Prior year......................................... (58,034) (23,960) 0
------- ------- -------
(68,256) (31,532) (12,012)
------- ------- -------
Balance as of September 30........................... $49,875 $66,654 $37,789
======= ======= =======
</TABLE>

F-15
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The amounts incurred in respect of prior year losses in 1996 relate
primarily to hurricanes Luis and Marilyn which occurred in September 1995.
Additional information reported by ceding companies in the months following
the losses necessitated additional reserving. This impact has been mitigated
by the collection of additional reinstatement premiums. In respect of 1995,
additional losses of $5.7 million (gross of reinstatements of approximately
$1.1 million) related to development of the Northridge earthquake, reflecting
an increase in the market estimates of anticipated total insured loss.

10. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company's functional currency is the U.S. dollar, however, as the
Company operates internationally, it has exposure to changes in foreign
currency exchange rates. These exposures include net cash inflows on non-U.S.
dollar denominated insurance premiums.

To manage the Company's exposure to these risks, the Company enters into
foreign exchange contracts in the major currencies to which the Company is
exposed. These contracts generally involve the exchange of one currency for
another at some future date. At September 30, 1996, the Company had a notional
principal amount outstanding of approximately $25,192 (1995: $6,129) in
contracts to sell foreign currencies in the future. The fair value of these
contracts, based on quoted forward rates available for the maturity of the
contracts, as at September 30, 1996 was $(571) (1995: $(136)). A loss of $294
(1995: $756; 1994: $nil) is included in the Statements of Operations in
respect of these contracts.

Foreign exchange contracts at September 30, 1996 generally have maturities
of six months or less and relate to major Western currencies. Counterparties
to the transactions are large financial institutions. Although the Company is
exposed to credit loss in the event of non-performance by other parties in the
contracts, such non-performance is not anticipated.

The Company may also enter into foreign exchange contracts to manage the
exposures relating to known reinsurance losses denominated in foreign
currencies. However, no such contracts had been entered into at the balance
sheet date.

11. CREDIT FACILITY

On December 1, 1995, the Company obtained a five year, $100 million
committed line of credit from a syndicate of banks, maturing on December 1,
2000. The facility may only be used to buy preferred shares of LaSalle Re,
which in turn may use the proceeds of such purchase to meet current cash
requirements. The preferred stock of LaSalle Re, when issued would be pledged
by the Company as security for the borrowings under the facility. As at
September 30, 1996, the facility had not been utilized.

The credit facility contains various covenants, including: limitations on
incurring additional indebtedness; prohibition of dividend payments that would
cause the Company's tangible net worth, defined as total shareholders' equity
and minority interest, to fall below $350 million in calendar 1996, $375
million in calendar years 1997 and 1998 and thereafter $400 million;
restriction of dividends to a maximum of 50% of the consolidated net income
for the immediately preceding fiscal year; restrictions on the sale or lease
of assets not in the ordinary course of business; maintenance of a ratio of
consolidated total debt to consolidated tangible net worth of no more than
0.40 to 1.00; maintenance of tangible net worth at the end of each fiscal year
of the greater of $250 million or 70% of net premiums written; maintenance of
statutory capital at the end of each fiscal year of at least $250 million; and
maintenance of a ratio of net premiums written to statutory capital at the end
of any fiscal quarter of no more than 1.00 to 1.00 in each case. At September
30, 1996, the Company was in compliance with all covenants under the facility.

F-16
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. STATUTORY DATA

The Company's ability to pay dividends is subject to certain regulatory
restrictions on the payment of dividends by LaSalle Re. Under The Insurance
Act 1978, amendments thereto and related regulations of Bermuda, LaSalle Re is
required to prepare statutory financial statements and to file in Bermuda a
statutory financial return. LaSalle Re is required to maintain certain
measures of solvency and liquidity.

The statutory capital and surplus of LaSalle Re at September 30, 1996 was
approximately $477,000 (1995: $391,000) and the minimum required statutory
capital and surplus required by its license as a Class 4 insurer, was
approximately $100,000 (1995: $100,000).

In this regard, the declaration of dividends from retained earnings and
distributions from additional paid in capital is limited to the extent that
the above requirements are met. At September 30, 1996, there were no
restrictions on distribution of retained earnings.

13. SEGMENTAL INFORMATION

The following table sets forth the Company's net premiums written and the
percentage thereof allocated to the zone of exposure for the years ended
September 30, 1996 and 1995 and the period ended September 30, 1994:

<TABLE>
<CAPTION>
1996 1995 1994
------------------- ------------------- -------------------
PREMIUMS PREMIUMS PREMIUMS
WRITTEN PERCENTAGE WRITTEN PERCENTAGE WRITTEN PERCENTAGE
-------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
United States........... $ 79,357 41.7% $ 91,561 45.4% $ 67,176 50.4%
Europe
(excluding the U.K.)... 21,959 11.6 21,041 10.4 18,147 13.6
United Kingdom.......... 16,310 8.6 14,089 7.0 8,724 6.5
Japan................... 7,998 4.2 7,642 3.8 4,896 3.7
Australasia............. 11,038 5.8 9,756 4.8 4,510 3.4
Worldwide............... 22,049 11.6 26,893 13.3 7,920 5.9
Worldwide
(excluding U.S.)....... 11,451 6.0 8,789 4.4 6,441 4.8
Other................... 16,433 8.6 16,128 8.0 7,241 5.5
Reinstatement and
adjustment premiums.... 3,556 1.9 6,017 2.9 8,272 6.2
-------- ----- -------- ----- -------- -----
$190,151 100.0% $201,916 100.0% $133,327 100.0%
======== ===== ======== ===== ======== =====
</TABLE>

14. TAXATION

Under current Bermuda law the Company is not required to pay any taxes in
Bermuda on either income or capital gains. The Company has received an
undertaking from the Minister of Finance in Bermuda that will exempt the
Company from taxation until the year 2016 in the event of any such taxes being
imposed.

The Company does not consider itself to be engaged in a trade or business in
the United States and accordingly does not expect to be subject to United
States income taxes.

F-17
<PAGE>

LASALLE RE HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

15. UNAUDITED QUARTERLY FINANCIAL DATA

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
Year ended September 30, 1996
Net premiums earned.......................... $49,445 $53,647 $55,294 $36,755
Net investment income (net of realized
losses)..................................... 6,204 6,399 6,789 7,036
Losses and loss expenses incurred............ 15,882 18,354 9,954 7,287
Net income................................... 29,400 31,332 40,818 27,901
Net income per share......................... $ 1.23 $ 1.31 $ 1.70 $ 1.16
Year ended September 30, 1995
Net premiums earned.......................... $28,683 $45,344 $48,758 $47,585
Net investment income (net of realized
losses)..................................... 5,585 6,126 6,349 7,006
Losses and loss expenses incurred............ 591 13,462 10,488 35,856
Net income................................... 28,264 31,154 35,320 9,710
Net income per share......................... $ 1.22 $ 1.34 $ 1.49 $ 0.41
</TABLE>

F-18
<PAGE>

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

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPEC-
TUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RE-
LIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITY OTHER THAN THE COMMON SHARES OFFERED HEREBY, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UN-
LAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PRO-
SPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Enforcement of Civil Liabilities.......................................... 3
Available Information..................................................... 3
Forward-Looking Statements................................................ 4
Prospectus Summary........................................................ 5
Risk Factors.............................................................. 11
Use of Proceeds........................................................... 20
Price Range of Common Shares.............................................. 20
Dividend Policy........................................................... 21
Capitalization............................................................ 22
Selected Consolidated Financial Data...................................... 23
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 25
Business.................................................................. 32
Management................................................................ 47
Certain Transactions...................................................... 55
Principal and Selling Shareholders........................................ 58
Description of Capital Stock.............................................. 61
Shares Eligible for Future Sale........................................... 64
Certain Tax Considerations................................................ 66
Underwriting.............................................................. 76
Legal Matters............................................................. 78
Experts................................................................... 78
Glossary of Selected Insurance and Reinsurance Terms...................... 79
Index to Consolidated Financial Statements................................ F-1
</TABLE>

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

3,150,000 SHARES

LASALLE RE
HOLDINGS LIMITED

COMMON SHARES

--------

PROSPECTUS

, 1996

--------

SMITH BARNEY INC.

LAZARD FRERES & CO. LLC

MORGAN STANLEY & CO.
INCORPORATED

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

[ALTERNATE PAGE]
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED NOVEMBER 1, 1996

PROSPECTUS

3,150,000 SHARES

LASALLE RE HOLDINGS LIMITED

COMMON SHARES

--------

Of the 3,150,000 common shares, par value $1.00 per share (the "Common
Shares"), of LaSalle Re Holdings Limited (the "Company") offered hereby,
630,000 Common Shares are being offered outside the United States and Canada
and 2,520,000 Common Shares are being offered in a concurrent offering inside
the United States and Canada (collectively, the "Offerings"). The public
offering price and the aggregate underwriting discount per Common Share will be
identical for each of the Offerings. See "Underwriting."

The Common Shares are quoted on the Nasdaq National Market under the symbol
"LSREF." On October 30, 1996, the last reported sale price of the Common Shares
on the Nasdaq National Market was $27.125 per share. See "Price Range of Common
Shares."
SEE "RISK FACTORS" ON PAGE 11 FOR A DESCRIPTION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS
OF THE COMMON SHARES.

--------

<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS (1) SHAREHOLDERS (2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Common Share.................... $ $ $
- --------------------------------------------------------------------------------
Total (3)........................... $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) The Company has agreed to indemnify the U.S. Underwriters and the Managers
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offerings estimated at $550,000 payable by
the Company.

--------

The Common Shares are being offered by the several Managers named herein,
subject to prior sale, when, as and if accepted by them and subject to certain
conditions. It is expected that certificates for the Common Shares offered
hereby will be available for delivery on or about , 1996 at the
offices of Smith Barney Inc., 388 Greenwich Street, New York, New York 10013.

--------
SMITH BARNEY INC.
LAZARD CAPITAL MARKETS
MORGAN STANLEY & CO.
INTERNATIONAL
, 1996
<PAGE>

[ALTERNATE PAGE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPEC-
TUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE COMMON SHARES OFFERED HEREBY, NOR DOES IT CON-
STITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECU-
RITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE HEREOF.

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

TABLE OF CONTENTS

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

3,150,000 SHARES

LASALLE RE
HOLDINGS LIMITED

COMMON SHARES

-------

PROSPECTUS

, 1996

-------

SMITH BARNEY INC.

LAZARD CAPITAL MARKETS

MORGAN STANLEY & CO.
INTERNATIONAL

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a statement of the expenses payable by the Company in
connection with issuance and distribution of the securities being registered
hereby. None of the expenses are payable by the Selling Shareholders. All
amounts shown are estimates, except the Commission registration fee, the NASD
filing fee and the Nasdaq quotation fee.

<TABLE>
<S> <C>
SEC registration fee............................................ $ 29,622
NASD filing fee................................................. 10,275
Printing and engraving.......................................... 150,000
Legal fees and expenses......................................... 260,000
Accounting fees and expenses.................................... 40,000
Custodian fees and expenses..................................... 5,000
Blue sky fees and expenses...................................... 6,000
Miscellaneous................................................... 49,103
--------
Total....................................................... $550,000
========
</TABLE>
- --------
*To be filed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Pursuant to the provisions of the Act, Holdings has adopted provisions in
its Bye-Laws which require it to indemnify its directors and officers in
certain circumstances and specifically to indemnify its directors and officers
against all amounts actually and reasonably incurred to Holdings or its
stockholders by reason of a breach of duty to the Company, provided that such
director or officer acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action, suit or proceeding, had no reasonable cause to believe
that the conduct was unlawful, and except for any claim, issue or matter as to
which such person shall have been finally adjudged to be liable for wilful
negligence, wilful default, fraud or dishonesty in the performance of the duty
to Holdings.

The Company also maintains insurance on its directors and officers, which
covers liabilities under the federal securities laws.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On November 20, 1995, 13,005,720 Common Shares were issued to existing
shareholders of LaSalle Re in exchange for capital stock of LaSalle Re. This
exchange was exempt from registration pursuant to Section 4(2) of the
Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS.

The following documents are filed with this Registration Statement.

II-1
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S> <C>
1.1* Form of U.S. Underwriting Agreement.
1.2* Form of International Underwriting Agreement.
3.1 Memorandum of Association (Incorporated by reference to
Exhibit 3.1 to Registration Statement on Form S-1 (No.
33-97304)).
3.2 Bye-Laws (Incorporated by reference to Exhibit 3.1 to Form
10-Q for the quarterly period ended December 31, 1995
(File No. 0-27216)).
5.1* Opinion of Conyers Dill & Pearman regarding the validity
of the Common Shares.
8.1* Opinion of Conyers Dill & Pearman regarding certain Ber-
muda tax matters.
8.2* Opinion of Mayer, Brown & Platt regarding certain U.S. tax
matters.
8.3* Opinion of Clyde & Co. regarding certain U.K. tax matters.
10.1 Excess Ownership Agreement dated November 27, 1995 among
Holdings, LaSalle Re and the Founding Shareholders (In-
corporated by reference to Exhibit 10.3 to Form 10-Q for
the quarterly period ended December 31, 1995 (File No. 0-
27216)).
10.2 Amended and Restated Shareholders Agreement dated November
27, 1995 among Holdings, LaSalle Re and the Founding
Shareholders (Incorporated by reference to Exhibit 10.1
to Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
10.3 Amended and Restated Option Agreement dated November 27,
1995 among Holdings, LaSalle Re and certain of the Found-
ing Shareholders (Incorporated by reference to Exhibit
10.2 to Form 10-Q for the quarterly period ended December
31, 1995 (File
No. 0-27216)).
10.4 Conversion Agreement dated November 27, 1995 among Hold-
ings, LaSalle Re and holders of Exchangeable Non-Voting
Shares (Incorporated by reference to Exhibit 10.4 to
Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
10.5 Amended and Restated Employment Agreement dated October 1,
1993 between Victor H. Blake and LaSalle Re (Incorporated
by reference to Exhibit 10.5 to Form 10-Q for the quar-
terly period ended December 31, 1995 (File No. 0-27216)).
10.6 Amended and Restated Underwriting Services Agreement dated
September 21, 1995 among Holdings, LaSalle Re and CNA
Services (Incorporated by reference to Exhibit 10.6 to
Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
10.7 Amended and Restated Administrative Services Agreement
dated September 21, 1995 among Holdings, LaSalle Re and
Aon Bermuda (Incorporated by reference to Exhibit 10.7 to
Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
10.8** Amended and Restated Investment Management Agreement dated
September 21, 1995 among Holdings, LaSalle Re and Aon Ad-
visors.
10.9** Claims Agreement dated December 16, 1993 between LaSalle
Re and IRISC.
10.10 Employment Agreement dated October 1, 1995, between Andrew
Cook and LaSalle Re (Incorporated by reference to Exhibit
10.10 to Form 10-Q for the quarterly period ended Decem-
ber 31, 1995 (File No. 0-27216)).
10.11 Credit Agreement dated as of December 1, 1995 among Hold-
ings, several banks and Chemical Bank, as administrative
agent (Incorporated by reference to Exhibit 10.9 to
Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S> <C>
10.12** First Amendment, dated September 25, 1996 among Holdings,
several banks and Chase Manhattan Bank as administrative
agent, to Credit Agreement dated as of December 1, 1995
among Holdings, several banks and Chemical Bank as admin-
istrative agent.
10.13** Long-Term Incentive Plan.
10.14** Employee Stock Purchase Plan.
10.15 First Amendment dated July 1, 1996 to Amended and Restated
Underwriting Services Agreement dated as of September 21,
1995 between CNA (Bermuda) Services Limited and LaSalle
Re.
10.16** First Amendment dated July 1, 1996 to Amended and Restated
Administrative Services Agreement dated as of September
21, 1995 between Aon Risk Consultants (Bermuda) Limited
and LaSalle Re.
10.17 Quota Share Treaty between CNA International Reinsurance
Company Limited and LaSalle Re in respect of 1994 under-
writing year of account (London office).
10.18 Quota Share Treaty between CNA International Reinsurance
Company Limited and LaSalle Re in respect of 1995 under-
writing year of account (London office).
10.19 Quota Share Treaty between CNA International Reinsurance
Company Limited and LaSalle Re in respect of 1996 under-
writing year of account (London office).
10.20 Quota Share Treaty between CNA International Reinsurance
Company Limited and LaSalle Re in respect of 1994 under-
writing year of account (Amsterdam office).
10.21 Quota Share Treaty between CNA International Reinsurance
Company Limited and LaSalle Re in respect of 1995 under-
writing year of account (Amsterdam office).
10.22 Quota Share Treaty between CNA International Reinsurance
Company Limited and LaSalle Re in respect of 1996 under-
writing year of account (Amsterdam office).
10.23 LMX Quota Share Retrocessional Agreement between Continen-
tal Casualty Company and LaSalle Re for the 1995 under-
writing year of account.
10.24 LMX Quota Share Retrocessional Agreement between Continen-
tal Casualty Company and LaSalle Re for the 1996 under-
writing year of account.
12.1** Statement Re: Computation of Per Share Earnings.
21.1** Subsidiaries of the Registrant.
23.1* Consent of Conyers, Dill & Pearman (included in Exhibit
8.1).
23.2* Consent of Mayer, Brown & Platt (included in Exhibit 8.2).
23.3* Consent of Clyde & Co. (included in Exhibit 8.3).
23.4 Consent of KPMG Peat Marwick.
24.1 Powers of Attorney (included in signature pages)
</TABLE>
- --------
*To be filed by amendment.

**Previously filed.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under

II-3
<PAGE>

the Securities Act of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(3) At the closing specified in the underwriting agreement, it will
provide to the underwriter certificates in such denominations and
registered in such names as required by the underwriter to permit prompt
delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN NEW YORK, NEW YORK,
ON THE 1ST DAY OF NOVEMBER, 1996.

LaSalle Re Holdings Limited

/s/ Andrew Cook
By: _________________________________
Name: Andrew Cook
Title: Chief Financial Officer and
Treasurer

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE 1ST DAY OF NOVEMBER, 1996.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----

<S> <C>
/s/ Victor H. Blake* Chairman, President and Chief Executive
___________________________________________ Officer (Principal Executive Officer)
Victor H. Blake

/s/ Andrew Cook Chief Financial Officer and Treasurer
___________________________________________ (Principal Financial Officer)
Andrew Cook

/s/ Steven Given* Controller (Principal Accounting Officer)
___________________________________________
Steven Given

/s/ William J. Adamson, Jr. Director
___________________________________________
William J. Adamson, Jr.

/s/ Andrew Africk* Director
___________________________________________
Andrew Africk
/s/ Ivan P. Berk* Director
___________________________________________
Ivan P. Berk

/s/ Joseph Haviv* Director
___________________________________________
Joseph Haviv

</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----

<S> <C>
/s/ Jonathan H. Kagan* Director
___________________________________________
Jonathan H. Kagan

/s/ Donald P. Koziol, Jr.* Director
___________________________________________
Donald P. Koziol, Jr.

/s/ Lester Pollack* Director
___________________________________________
Lester Pollack

/s/ Peter J. Rackley* Director
___________________________________________
Peter J. Rackley

/s/ Scott A. Schoen* Director
___________________________________________
Scott A. Schoen

/s/ Harvey G. Simons* Director
___________________________________________
Harvey G. Simons

/s/ David A. Stockman* Director
___________________________________________
David A. Stockman

/s/ Paul J. Zepf* Director
___________________________________________
Paul J. Zepf
</TABLE>

/s/ Andrew Cook

*By: ___________________________

Andrew Cook

Attorney-in-fact

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Victor H.
Blake, Andrew Cook and Steven Given, or any of them, such person's true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission.

/s/ William J. Adamson, Jr.

_________________________________

William J. Adamson, Jr.

II-6
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1.1* Form of U.S. Underwriting Agreement.
1.2* Form of International Underwriting Agreement.
3.1 Memorandum of Association (Incorporated by reference to Exhibit 3.1 to
Registration Statement on Form S-1 (No. 33-97304)).
3.2 Bye-Laws (Incorporated by reference to Exhibit 3.1 to Form 10-Q for
the quarterly period ended December 31, 1995 (File No. 0-27216)).
5.1* Opinion of Conyers Dill & Pearman regarding the validity of the Common
Shares.
8.1* Opinion of Conyers Dill & Pearman regarding certain Bermuda tax
matters.
8.2* Opinion of Mayer, Brown & Platt regarding certain U.S. tax matters.
8.3* Opinion of Clyde & Co. regarding certain U.K. tax matters.
10.1 Excess Ownership Agreement dated November 27, 1995 among Holdings,
LaSalle Re and the Founding Shareholders (Incorporated by reference to
Exhibit 10.3 to Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
10.2 Amended and Restated Shareholders Agreement dated November 27, 1995
among Holdings, LaSalle Re and the Founding Shareholders (Incorporated
by reference to Exhibit 10.1 to Form 10-Q for the quarterly period
ended December 31, 1995 (File No. 0-27216)).
10.3 Amended and Restated Option Agreement dated November 27, 1995 among
Holdings, LaSalle Re and certain of the Founding Shareholders
(Incorporated by reference to Exhibit 10.2 to Form 10-Q for the
quarterly period ended December 31, 1995 (File No. 0-27216)).
10.4 Conversion Agreement dated November 27, 1995 among Holdings, LaSalle
Re and holders of Exchangeable Non-Voting Shares (Incorporated by
reference to Exhibit 10.4 to Form 10-Q for the quarterly period ended
December 31, 1995 (File No. 0-27216)).
10.5 Amended and Restated Employment Agreement dated October 1, 1995
between Victor H. Blake and LaSalle Re (Incorporated by reference to
Exhibit 10.5 to Form 10-Q for the quarterly period ended December 31,
1995 (File No. 0-27216)).
10.6 Amended and Restated Underwriting Services Agreement dated September
21, 1995 among Holdings, LaSalle Re and CNA Services (Incorporated by
reference to Exhibit 10.6 to Form 10-Q for the quarterly period ended
December 31, 1995 (File No. 0-27216)).
10.7 Amended and Restated Administrative Services Agreement dated September
21, 1995 among Holdings, LaSalle Re and Aon Bermuda (Incorporated by
reference to Exhibit 10.7 to Form 10-Q for the quarterly period ended
December 31, 1995 (File No. 0-27216)).
10.8** Amended and Restated Investment Management Agreement dated September
21, 1995 among Holdings, LaSalle Re and Aon Advisors.
10.9** Claims Agreement dated December 16, 1993 between LaSalle Re and IRISC.
10.10 Employment Agreement dated October 1, 1995 between Andrew Cook and
LaSalle Re (Incorporated by reference to Exhibit 10.10 to Form 10-Q
for the quarterly period ended December 31, 1995 (File No. 0-27216)).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
10.11 Credit Agreement dated as of December 1, 1995 among Holdings, several
banks and Chemical Bank, as administrative agent (Incorporated by
reference to Exhibit 10.9 to Form 10-Q for the quarterly period ended
December 31, 1995 (File No. 0-27216)).
10.12** First Amendment, dated September 25, 1996, among Holdings, several
banks and Chase Manhattan Bank as administrative agent, to Credit
Agreement dated as of December 1, 1995 among Holdings, several banks
and Chemical Bank, as administrative agent.
10.13** Long-Term Incentive Plan.
10.14** Employee Stock Purchase Plan.
10.15 First Amendment dated July 1, 1996 to Amended and Restated
Underwriting Services Agreement dated as of September 21, 1995 between
CNA (Bermuda) Services Limited and LaSalle Re.
10.16** First Amendment dated July 1, 1996 to Amended and Restated
Administrative Services Agreement dated as of September 21, 1995
between Aon Risk Consultants (Bermuda) Limited and LaSalle Re.
10.17 Quota Share Treaty between CNA International Reinsurance Company
Limited and LaSalle Re in respect of 1994 underwriting year of account
(London office).
10.18 Quota Share Treaty between CNA International Reinsurance Company
Limited and LaSalle Re in respect of 1995 underwriting year of account
(London office).
10.19 Quota Share Treaty between CNA International Reinsurance Company
Limited and LaSalle Re in respect of 1996 underwriting year of account
(London office).
10.20 Quota Share Treaty between CNA International Reinsurance Company
Limited and LaSalle Re in respect of 1994 underwriting year of account
(Amsterdam office).
10.21 Quota Share Treaty between CNA International Reinsurance Company
Limited and LaSalle Re in respect of 1995 underwriting year of account
(Amsterdam office).
10.22 Quota Share Treaty between CNA International Reinsurance Company
Limited and LaSalle Re in respect of 1996 underwriting year of account
(Amsterdam office).
10.23 LMX Quota Share Retrocessional Agreement between Continental Casualty
Company and LaSalle Re for the 1995 underwriting year of account.
10.24 LMX Quota Share Retrocessional Agreement between Continental Casualty
Company and LaSalle Re for the 1996 underwriting year of account.
12.1** Statement Re: Computation of Per Share Earnings.
21.1** Subsidiaries of the Registrant.
23.1* Consent of Conyers, Dill & Pearman (included in Exhibit 8.1).
23.2* Consent of Mayer, Brown & Platt (included in Exhibit 8.2).
23.3* Consent of Clyde & Co. (included in Exhibit 8.3).
23.4 Consent of KPMG Peat Marwick.
24.1 Powers of Attorney (included in signature pages)
</TABLE>
- --------
*To be filed by amendment.

**Previously filed.

<PAGE>

Exhibit 10.15

FIRST AMENDMENT
Dated as of July 1, 1996

THIS FIRST AMENDMENT, dated as of July 1, 1996 (this "First
Amendment"), amends the Amended and Restated Underwriting Services Agreement
dated as of September 21, 1995 (the "Underwriting Services Agreement") between
CNA (BERMUDA) SERVICES LIMITED ("CNA Bermuda") and LASALLE RE LIMITED (the
"Company"). Capitalized terms used in this First Amendment and not otherwise
defined herein have the meanings ascribed to such terms in the Underwriting
Services Agreement.

WHEREAS, the parties hereto have entered into the Underwriting
Services Agreement pursuant to which CNA Bermuda provides certain underwriting
and marketing services to the Company;

WHEREAS, the Company and its parent, LaSalle Re Holdings Limited (the
"Parent"), have established the LaSalle Re Holdings Limited Employee Stock
Purchase Plan (the "Plan") in part for the provision of certain benefits to
employees of CNA Bermuda assigned to the Company, on the understanding that CNA
Bermuda would reimburse the Parent for certain costs; and

WHEREAS, the parties accordingly desire to amend the Underwriting
Services Agreement as hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledge), the parties hereto agree as follows:

Effective as of the date hereof, the Underwriting Services Agreement
shall be amended by adding thereto the following paragraph J, to be inserted in
its proper alphabetical sequence under Section II "Duties of CNA BERMUDA" of the
Underwriting Services Agreement:

"J. Section 2.4 of the Plan allows each Participant to purchase a certain
number of shares of Stock at a discounted price for each Subscription
Period. CNA Bermuda shall promptly reimburse the Parent for any
difference between the purchase price per share paid by such
Participant who is an employee of CNA Bermuda and the Fair Market
Value of Stock on the Price Date."

Capitalized terms used in this paragraph J and not otherwise defined
herein have the meanings ascribed to such terms in the Plan.

<PAGE>

As herein amended, the Underwriting Services Agreement shall remain in full
force and effect and is hereby ratified and confirmed in all respects. This
First Amendment may be executed in any number of counterparts and by the
different parties on separate counterparts, and each such counterpart shall be
deemed to be an original but all such counterparts shall together constitute one
and the same First Amendment. This First Amendment shall be construed according
to the laws of Bermuda.

IN WITNESS WHEREOF, the parties hereto set their hands as of the date and
year first above written.

LASALLE RE LIMITED

By: /s/ Andrew Cook
---------------------------
Name: Andrew Cook
---------------------------
Title: CFO
---------------------------

CNA (BERMUDA) SERVICES LIMITED

By: /s/ W.J. Adamson
---------------------------
Name: W.J. Adamson
---------------------------
Title:
---------------------------

<PAGE>

Exhibit 10.17

Reassured:- CNA International Reinsurance Co. Ltd.

Period:- Continuous contract in respect of all business written by
the Reassured and signed into their 1994 and subsequent
Underwriting Years of Account.

Subject to three months prior notice of cancellation to
expire at 31st December any year.

HEREON: SIGNING SLIP IN RESPECT OF 1994 UNDERWRITING
YEAR OF ACCOUNT.

Type:- Quota Share Treaty.

Class:- The Reassured's Account of
PROPERTY CATASTROPHE EXCESS OF LOSS TREATIES (including
specific peril aggregate excess of loss written for a
single territory) underwritten in their London office.

Excluding the Reinsured's interest whether direct or by
way of reinsurance in loss arising from claim or claims
against an Insured by another party or parties.

Notwithstanding the foregoing this reinsurance shall not
exclude:

1) Workers' Compensation and/or Employers' Liability
losses arising from the following perils:-

Fire, Lightning, Explosion, Structural Collapse,
Windstorm, Hail, Flood, Seismic Activity, Volcanic
Eruption, Collision, Riots, Strikes, Civil
Commotion, Malicious Damage.

2) Any Physical Damage and/or Consequential loss
coverage contingent thereon effected by an Insured
on behalf of another party.

Territorial Scope:- Worldwide excluding USA & Canada. Except where
incidental.

Treaty Detail:- To take 50% Quota Share of the Reassureds participation
subject to a maximum cession hereon of (Pounds)2,000,000
($3,000,000) any one programme. Cessions in currencies
other than sterling at rates of exchange as used in the
books of the Reassured.

Rate:- Original Nett Premium to the Reassured.

Administrative
Processing Fee:- 2.50% O.N.P.

Taxes:- As may be applicable on the original business.

Premium Reserve:- Not applicable.

Loss Reserve:- As may be applicable on the original business.

Portfolio:- Agreed, if and when requested by the Reassured, to close
each Underwriting Year of Account at any time after the
end of the third year at an amount sufficient to cover
all outstanding losses as may be mutually agreed.

<PAGE>

Cash Loss:- At Reassured's discretion, Minimum $5,000,000.

Accounts:- Quarterly Account in (pound) and US$ separately on each
year of account. Presentation within 45 days of end of
each quarter with settlement due within 30 days
thereafter.

General Conditions:- Monthly bordereaux of risks ceded
Full Reinsurance Clause
War Exclusion Clause G51
Nuclear Energy Risks Exclusion Clause
(Reinsurance) 1984, NMA 1975 (Japanese Amendment)
Nuclear Incident Exclusion Clauses - Physical
Damage Reinsurance - USA & Canada
Excluding treaties classified as worldwide or worldwide
Ex-USA
Excluding Financial Guarantee and Insolvency
Maximum Net Premium ceded hereon $18m
Maximum aggregate cession per country or territorial zone
hereon (pound)20,000,000

Wording:- To be agreed

/s/ Guy Hengesbaugh
- -----------------------
Mr. Guy Hengesbaugh
Chief Underwriter
LaSalle Re. Ltd.

Ref. No. 1237/94

<PAGE>

ADDENDUM NO. 1
--------------

Attaching to and forming part of the Non-Obligatory Quota Share Reinsurance
Agreement made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as "the Reassured")

and

LA SALLE RE LTD
(hereinafter referred to as "the Reinsurers")

Effective 1st July 1994 the following changes are made to this Agreement:

1. ARTICLE 2, COVER, LIMIT AND RETENTION will be as follows and not as
heretofore:

The Reassured may cede and the Reinsurers shall accept by way of
reinsurance under this Agreement, 25% Quota Share of all cessions coming
within the scope of this Agreement, subject to a maximum Quota share of
cessions hereto of (pound)2,000,000 or US$3,000,000 for any one programme.

The Reassured shall retain the remaining 75% Quota Share for its own
account but, without prejudice to the above, shall be at liberty to protect
that retention by way of reinsurance for its own account and benefit.

The maximum aggregate cession hereto per country or territorial zone is
(pound)30,000,000.

2. ARTICLE 8, PREMIUM. The first paragraph will be as follows and not as
heretofore:

In consideration of the liabilities undertaken by the Reinsurers in
accordance with the terms of this Agreement, the Reassured shall pay to the
Reinsurers their 25% Quota Share proportion of the Reassured's Original Net
Premium in respect of all cessions hereto.

<PAGE>

3. Notwithstanding anything contained in this Agreement to the contrary the
following Special Acceptances shall come within the terms of this
Agreement:

A. REINSURED: Hartford Re
TYPE: General Excess of Loss Reinsurance
LIMIT: (pound)16,666,667 or US$/C$25,000,000 in excess of
(pound)23,333,333 or US$/C$35,000,000
PERIOD: 12 months commencing 1st October 1994

B. REINSURED: Direct Line
TYPE: 2 Layers of Excess of Loss Reinsurance
PERIOD: 12 months commencing 1st October 1994

All other terms and conditions remain unchanged.

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Addendum as follows:

Signed in London, England, this 7th day of November 1994

For and on behalf of the Reassured: Peter Knight 44F/94

CNA INTERNATIONAL REINSURANCE CO. LTD.

And

Signed in Hamilton, Bermuda, this 16 day of November 1995

For and on behalf of the Reinsurers: LaSalle Re Limited

/s/ Graham Waite
-------------------
Graham A. Waite
Underwriter

<PAGE>

TITLE: NON-OBLIGATORY QUOTA SHARE
REINSURANCE AGREEMENT

BETWEEN: CNA INTERNATIONAL REINSURANCE
COMPANY LIMITED

AND

LA SALLE RE LTD

COMMENCING: 1ST JANUARY, 1994

<PAGE>

NON-OBLIGATORY QUOTA SHARE REINSURANCE AGREEMENT
------------------------------------------------

made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as 'the Reassured')

and

LA SALLE RE LTD
(hereinafter referred to as 'the Reinsurers')

PREAMBLE
- --------

This Agreement is made and entered into between CNA International Reinsurance
Company Ltd (hereinafter referred to as "the Reassured") and La Salle Re Ltd
(hereinafter referred to as "the Reinsurers"), on the following terms and
conditions.

ARTICLE 1
---------

BUSINESS REINSURED
- ------------------

This Agreement applies to policies and/or contracts of insurance and/or
reinsurance allocated by the Reassured to its account of Property Catastrophe
Excess of Loss Treaties (including specific peril aggregate excess of loss
written for a single territory) written or renewed by the Reassured in its
London Office.

ARTICLE 2
---------

COVER, LIMIT AND RETENTION
- --------------------------

The Reassured may cede and the Reinsurers shall accept by way of reinsurance
under this Agreement, 50% Quota Share of all cessions coming within the scope of
this Agreement, subject to a maximum Quota Share of cessions hereto of
(Pounds)2,000,000 or US$3,000,000 for any one programme.

The Reassured shall retain the remaining 50% Quota Share for its own account
but, without prejudice to the above, shall be at liberty to protect that
retention by way of reinsurance for its own account and benefit.

The maximum aggregate cession hereto per country or territorial zone is
(Pounds)30,000,000.

<PAGE>

- 2 -

ARTICLE 3
---------

TERRITORIAL SCOPE
- -----------------

This Agreement shall cover wherever cessions hereto cover other than losses
occurring in the United States of America and/or Canada except where such loss
exposures are incidental to the main hazard.

ARTICLE 4
---------

PERIOD
- ------

This Agreement takes effect on 1st January 1994 and applies to all business
written or renewed by the Reassured and signed into its 1994 and/or subsequent
Underwriting Years of Account.

This Agreement shall remain in full force and effect unless and until terminated
on 31st December 1994 or on any subsequent 31st December by either party giving
to the other not less than three months prior written notice.

For the purposes of this Agreement, the term of and participations in this
Agreement shall be divided into separate Underwriting Years, each for twelve
months commencing on 1st January.

Each cession made by the Reassured and all accounting transactions relating
thereto, shall be allocated by the Reassured to one Underwriting Year.

In the event of cancellation, all cessions in force at Midnight on the date of
cancellation shall remain covered under this Agreement until their individual
natural expiration or termination whichever occurs first.

Notwithstanding anything to the contrary contained in this Article, either party
shall have the right to terminate this Agreement by giving the other party
notice:-

(a) if the performance of the whole or any part of this Agreement be prohibited
or rendered impossible de jure or de facto in particular and without
prejudice to the generality of the preceding words in consequence of any
law or regulation which is or shall be in force in any country or territory
or if any law or regulation shall prevent directly or indirectly the
remittance of any or all or any part of the balance of payments due to or
from either party;

(b) if the other party has become insolvent or unable to pay its debts or has
lost the whole or any part of its paid up capital;

<PAGE>

- 3 -

(d) if the country or territory in which the other party resides or has its
head office or is incorporated shall be involved in armed hostilities with
any other country whether war be declared or not or is partly or wholly
occupied by another power;

(e) if the other party shall have failed to comply with any of the terms and
conditions of this Agreement.

All notices of termination in accordance with any of the provisions of this
Article shall be by Telex or telegram and shall be deemed to be served upon
despatch or, where communications between the parties are interrupted, upon
attempted despatch.

All notices of termination served in accordance with any of the provisions of
this Article shall be addressed to the party concerned at its head office or at
any other address previously designated by that party.

In the event of this Agreement being terminated at any date other than its
natural expiry then the premium due to the Reinsurers shall be calculated upon
the Original Net Premium income of the Reassured up to the date of termination.

ARTICLE 5
---------

FOLLOW THE FORTUNES
- -------------------

The Reinsurers' liability to the Reassured in respect of all cessions under this
Agreement shall follow the liability of the Reassured to its reinsureds.

ARTICLE 6
---------

FULL REINSURANCE
- ----------------

The Reinsurers agree to follow and abide by all agreements, actions and/or
settlements made by the Reassured and to agree, with or without notice, all
alterations and/or additions and/or extensions made under the original cessions
subsequent to the effecting of this Agreement, subject to the conditions of this
Agreement.

The Reinsurers expressly agree to pay in all respects as may be paid on the
original cessions liable or not liable, including in addition where applicable a
pro rata share of legal and/or other special expenses when incurred by the
Reassured.
<PAGE>

- 4 -

ARTICLE 7
---------

EXCLUSIONS
- ----------

This Agreement does not cover:

A. any liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of war,
invasion, acts of foreign enemies, hostilities or war-like operations
(whether war be declared or not), civil war, mutiny, civil commotion
assuming the proportions of or amounting to a popular rising, insurrection,
rebellion, revolution, military or usurped power, martial law, confiscation
or nationalisation or requisition or destruction of or damage to property
by or under the order of any Government or public or local authority.

However, the foregoing exclusion shall not apply to those classes of
business which are written in accordance with the War and Civil War
Exclusion Agreement and/or the War and Civil War Risk Exclusion Agreement
nor to business outside the scope of such Agreements unless such classes
of business are not covered by this Agreement.

In respect of losses arising in the United Kingdom only (other than in
respect of losses arising under those classes of business covered
hereunder which contain a War Inclusion Clause and such other classes of
business covered hereunder for which there is no Market requirement for
such other classes of business to contain a War Exclusion Clause by virtue
of the operation of the War and Civil War Exclusion Agreement and/or
the War and Civil War Risk Exclusion Agreement), this Agreement shall not
cover any liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of any act
of any person or persons acting on behalf of or in connection with any
organisation the objects of which are to include the overthrowing or
influencing of any de jure or de facto government by terrorism or by any
violent means.

B. the Reassured's interest whether direct or by way of reinsurance in loss
arising from claim or claims against an insured by another party or
parties.
<PAGE>

- 5 -

Notwithstanding the foregoing this Agreement shall not exclude:

1) Workers' Compensation and/or Employers' Liability losses
arising from the following perils:-

Fire, Lightning, Explosion, Structural Collapse, Windstorm, Hail,
Flood, Seismic Activity, Volcanic Eruption, Collision, Riots, Strikes,
Civil Commotion, Malicious Damage;

2) Any Physical Damage and/or Consequential loss coverage contingent
thereon effected by an insured on behalf of another party.

C. Financial Guarantee and Insolvency.

D. Nuclear Risks for those applicable classes of business and territories as
appropriate in accordance with the clause referred to below and which
shall form an integral part hereof, copies of which are on file with the
Reassured:-

NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1984) - WORLDWIDE
EXCLUDING U.S.A. AND CANADA - NMA 1975

Notwithstanding the provisions this Clause, in respect of Japanese business
certain liabilities, the type of which by market practice and custom have
not been declared to the Japanese Nuclear Pool shall not fall within the
scope of this exclusion.

ARTICLE 8
---------

PREMIUM
- -------

In consideration of the liabilities undertaken by the Reinsurers in accordance
with the terms of this Agreement, the Reassured shall pay to the Reinsurers
their 50% Quota Share proportion of the Reassured's Original Net Premium in
respect of all cessions hereto.

The term "Original Net Premium" shall, for all purposes of this Agreement, be
understood to mean the full gross amount of the premiums paid to the Reassured
under the original cessions by their original insureds or reinsureds, less all
original commissions, brokerage and taxes.

The maximum Original Net Premium to be ceded to this Agreement for any one
Underwriting Year shall be $18,000,000.
<PAGE>

- 6 -

ARTICLE 9
---------

ADMINISTRATIVE PROCESSING FEE
- -----------------------------

The Reinsurers agree to allow the Reassured to deduct and retain for its own
benefit as administrative processing fee 2.5% of the Original Net Premium
payable to the Reinsurers in accordance with the terms of Article 8, "Premium".

ARTICLE 10
----------

LOSSES AND LOSS EXPENSES
- ------------------------

All loss settlements made by the Reassured, whether under strict policy
conditions or by compromise, shall be unconditionally binding upon the
Reinsurers who shall be liable for their Quota Share proportion thereof and of
all expenses (other than the salaries of employees and office expenses of the
Reassured) incurred by the Reassured in connection therewith.

The Reinsurers shall benefit in their Quota Share proportion from any salvage or
recoveries effected by the Reassured for the benefit of itself and the
Reinsurers.

Losses which the Reassured has paid shall be debited to the Reinsurers in the
quarterly accounts rendered in accordance with Article 11, "Accounts, Reports
and Payments" but, in the event of the Reassured sustaining a loss in respect of
which the 100% Quota Share proportion amounts to or exceeds $5,000,000 any one
occurrence, the Reassured shall have the option of requiring the Reinsurers to
effect payment as soon as practicable upon submission of proof of loss.

ARTICLE 11
----------

ACCOUNTS, REPORTS AND PAYMENTS
- ------------------------------

The Reassured shall render a separate quarterly statement of account for each
Underwriting Year of Account during which this Agreement is in force showing a
total of all premiums ceded to this Agreement during such quarter. The
Reassured shall also furnish a separate quarterly loss statement for each such
Underwriting Year of Account, showing losses paid, loss expenses and salvages
coming within the terms of this Agreement and entered into the Reassured's books
during such quarter.

<PAGE>

- 7 -

The quarterly accounts shall be rendered within forty-five days after the end of
each quarter. All accounts shall be rendered and settled in Sterling.

Balances due to the Reinsurers shall be paid on delivery of the accounts,
balances due to the Reassured shall be paid together with the confirmation but
not later than thirty days after the receipt of the accounts. In case of
objections, however, the amount not in dispute shall be paid at once and the
difference as soon as agreement has been reached.

The Reassured shall furnish quarterly bordereaux of cessions hereto.

ARTICLE 12
-----------

COMMUTATION
- -----------

If mutually agreed by the Reassured and the Reinsurers, at thirty-six months
following the commencement of any Underwriting Year of this Agreement, or at any
time thereafter, the Reassured may discharge the Reinsurers from all and/or
further liability in respect of such Underwriting Year. The Reassured will
prepare a report evaluating loss reserves and liabilities to establish a basis
for the discussion of commutation. The payment by the Reinsurers of an amount
mutually agreed will constitute a complete and final release of the Reinsurers
in respect of all liability relating to such Underwriting Year.

ARTICLE 13
----------

LOSS RESERVES
- -------------

Where required by original ceding companies, outstanding loss reserves will be
established by the Reassured and reference thereto shall be included in the
quarterly bordereaux referred to in Article 11 "Accounts, Reports and Payments".

ARTICLE 14
----------

CURRENCY
- --------

The currency to be used for all purposes of this Agreement shall be Pounds
Sterling. Cessions in currencies other than Pounds Sterling shall be converted
to Pounds Sterling at the rates of exchange used in the Reassured's books.

<PAGE>

- 8 -

ARTICLE 15
----------

INSOLVENCY OF THE REASSURED
- ---------------------------

Amounts due to the Reassured under this Agreement shall be payable by the
Reinsurers on the basis of the liability of the Reassured under the cessions
hereto without diminution because of the insolvency of the Reassured.

In the event of the insolvency of the Reassured, the Liquidator or Receiver or
Statutory Successor of the Reassured shall give written notice to the Reinsurers
of the pendency of any claim against the insolvent Reassured on the cessions
hereto within a reasonable time after such claim is filed in the insolvency
proceedings. During the pendency of such claim the Reinsurers may investigate
such claim and intervene, at their own expense, in the proceedings where such a
claim is to be adjudicated and interpose any defence or defences which they may
deem available to the Reassured or its Liquidator or Receiver or Statutory
Successor. The expense thus incurred by the Reinsurers shall be chargeable,
subject to court approval, against the insolvent Reassured as part of the
expense of liquidation to the extent of a proportionate share of the benefit
which may accrue to the Reassured solely as a result of the defence so
undertaken by the Reinsurers.

When two or more Reinsurers are involved in the same claim and a majority in
interest elect to investigate the claim and/or interpose defence to such claim,
the expense shall be apportioned in accordance with the terms of the above
paragraph as though such expense had been incurred by the Reassured.

Should the Reassured go into liquidation or should a receiver be appointed, the
Reinsurers shall be entitled to deduct from any sums which may be or may become
due to the Reassured under this Agreement any sums which are due to the
Reinsurers from the Reassured under this Agreement and which are payable at a
fixed or stated date, as well as any other sums due to the Reinsurers which are
permitted to be offset under applicable law.

In the event of the insolvency of the Reassured, the amounts due to the
Reassured under this Agreement shall be payable by the Reinsurers directly to
the Reassured or to its Liquidator, Receiver or Statutory Successor.

<PAGE>

- 9 -

ARTICLE 16
----------

DELAYS, ERRORS OR OMISSIONS
- ---------------------------

No inadvertent delay, error or omission shall be held to relieve either party
hereto of any liability which would have attached to them under this Agreement
if such delay, error or omission had not been made, provided that rectification
is made immediately upon discovery.

ARTICLE 17
----------

AMENDMENTS AND ALTERATIONS
- --------------------------

The terms herein contained comprise the whole Agreement between the Reassured
and the Reinsurers and may only be changed in writing, signed by or on behalf of
both parties.

ARTICLE 18
----------

ACCESS TO RECORDS
- -----------------

All documents and records in the possession of the Reassured concerning this
Agreement shall be made available upon reasonable notice at the request of the
Reinsurers for inspection by the Reinsurers or their nominated representatives
for the purposes of obtaining information concerning this Agreement or the
subject matter hereof.

For the avoidance of doubt, the rights given to the Reinsurers by this Article
shall continue in effect notwithstanding the termination of this Agreement and
shall be exercised at the Reinsurers' own expense.

ARTICLE 19
----------

OFFSET
- ------

Each party hereto shall have and may exercise in the event of the insolvency of
the other or the non-payment by the other of obligations where due hereunder,
the right to offset any balance or balances whether on account or premiums,
commissions, claims or losses, adjustment expenses, salvage or any other amount
due from that party to the other party hereto under this Agreement against the
balance or balances due or to become due to the offsetting party from the other
party under this Agreement.

<PAGE>

- 10 -

ARTICLE 20
----------

ARBITRATION
- -----------

1. All matters in difference between the parties arising under, out of or in
connection with this Agreement, including formation and validity, and
whether arising during or after the period of this Agreement, shall
be referred to an arbitration tribunal in the manner hereinafter set out.

2. Unless the parties appoint a sole arbitrator within 14 days of one
receiving a written request from the other for arbitration, the claimant
(the party requesting arbitration) shall appoint his arbitrator and give
written notice thereof to the respondent. Within 30 days of receiving such
notice the respondent shall appoint his arbitrator and give written notice
thereof to the claimant, failing which the claimant may apply to the
appointor hereafter named to nominate an arbitrator on behalf of the
respondent.

3. Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
either of them or either of the parties may apply to the appointor for
the appointment of the third arbitrator. The three arbitrators shall
decide by majority. If no majority can be reached the verdict of the
third arbitrator shall prevail. He shall also act as chairman of the
tribunal.

4. Unless the parties otherwise agree the arbitration tribunal shall consist
of persons (including those who have retired) with not less than ten
years' experience of insurance or reinsurance as persons engaged in the
industry itself or as lawyers or other professional advisers.

5. The arbitration tribunal shall, so far as is permissible under the law and
practice of the place of arbitration, have power to fix all procedural
rules for the holding of the arbitration including discretionary power
to make orders as to any matters which it may consider proper in the
circumstances of the case with regard to pleadings, discovery, inspection
of the documents, examination of witnesses and any other matter whatsoever
relating to the conduct of the arbitration and may receive and act upon
such evidence whether oral or written strictly admissible or not as it
shall in its discretion think fit.

<PAGE>

- 11 -

6. The appointor shall be the Chairman for the time being of ARIAS (UK) or
if he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ARIAS (UK). If for
any reason such persons decline or are unable to act, then the appointor
shall be the Judge of the appropriate Courts having jurisdiction at the
place of arbitration.

7. All costs of the arbitration shall be determined by the arbitration
tribunal who may, taking into account the law and practice of the place of
arbitration, direct to and by whom and in what manner they shall be paid.

8. The place of arbitration may be chosen by the parties, but in default of
such choice, the place of arbitration shall be London, England.

9. The proper law of this Agreement shall be the law of England.

10. The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.

ARTICLE 21
----------

PARTICIPATION
- -------------

This Agreement obligates the Reinsurers for their proportion of the interests
and liabilities set forth in this Agreement.

<PAGE>

- 12 -

IN WITNESS WHEREOF the parties hereto have, by their duly
authorised representative, executed this Agreement as follows:

Signed in London, England, this 11th day of April 1994

For and on behalf of the Reassured:
/s/ H. Simons
------------------------

CNA INTERNATIONAL REINSURANCE CO. LTD

And

Signed in Hamilton, Bermuda, this 26th day of September 1994.

For and on behalf of the Reinsurers. /s/ Guy Hengesbaugh
----------------------------------

Guy Hengesbaugh
Chief Underwriter

LASALLE RE LIMITED

44F94

<PAGE>

Exhibit 10.18

DRAFT

Reassured:- CNA International Reinsurance Co. Ltd.

Period:- Continuous contract in respect of all business written by
the Reassured and signed into their 1994 and subsequent
Underwriting Years of Account

Subject to three months prior notice of cancellation to
expire at 31st December any year.

HEREON: SIGNING SLIP IN RESPECT OF 1995 UNDERWRITING
YEAR OF ACCOUNT.

Type:- Quota Share Treaty

Class:- The Reassured's Account of
PROPERTY CATASTROPHE EXCESS OF LOSS TREATIES (including
specific peril aggregate excess of loss written for a
single territory) underwritten in their London office.

Excluding the Reinsured's interest whether direct or by
way of reinsurance in loss arising from claim or claims
against an insured by another party or parties.

Notwithstanding the foregoing this reinsurance shall not
exclude:

1) Workers' Compensation and/or Employers' Liability
losses arising from the following perils:-

Fire, Lightning, Explosion, Structural Collapse,
Windstorm, Hail, Flood, Seismic Activity, Volcanic
Eruption, Collision, Riots, Strikes, Civil
Commotion, Malicious Damage.

2) Any Physical Damage and/or Consequential loss
coverage contingent thereon affected by an insured
on behalf of another party.

Territorial Scope:- Worldwide excluding USA & Canada. Except where
incidental.

Rate:- Original Nett Premium to the Reassured.

Administrative
Processing Fee:- 2.50% O.N.P.

Taxes:- As may be applicable on the original business.

Premium Reserve:- Not applicable

Loss Reserve:- As may be applicable on the original business.

Cash Loss:- At Reassured's discretion, Minimum $5,000,000.

Accounts:- Quarterly Accounts in (Pounds) and US$ separately on
each year of account. Presentation within 45 days of end
of quarter with settlement due within 30 days thereafter.

General
Conditions:- Monthly bordereaux of risks ceded
Full Reinsurance Clause
War Exclusion G51
Nuclear Energy Risks Exclusion Clause
(Reinsurance) 1984, NMA 1975 (Japanese Amendment)
Nuclear Incident Exclusion Clauses - Physical
Damage Reinsurance - USA & Canada
Excluding Financial Guarantee and Insolvency
Maximum Net Premium ceded hereon $22m
Maximum aggregate cession per country or Territorial
zone hereon (Pounds)20,000,000
Special cessions to be agreed by Reinsurers prior to
binding

Wording:- To be agreed

/s/ Graham Waite
- -----------------------------------
Graham A. Waite
Underwriter
LaSalle Re Limited

Ref. No. T.B.A. 1237/95

<PAGE>

ADDENDUM NO. 1
--------------

Attaching to and forming part of the Non-Obligatory Quota Share Reinsurance
Agreement made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as 'the Reassured')

and

LA SALLE RE LTD
(hereinafter referred to as 'the Reinsurers')

Effective 1st July, 1994 the following changes are made to this Agreement:

1. ARTICLE 2, COVER, LIMIT AND RETENTION will be as follows and not as
heretofore:

The maximum aggregate cession hereto per country or territorial zone is
(pounds)30,000,000.

2. ARTICLE 8, PREMIUM. The first paragraph will be as follows and not as
heretofore:

3. Notwithstanding anything contained in this Agreement to the contrary the
following Special Acceptances shall come within the terms of this Agreement:

A. REINSURED: Hartford Re
TYPE: General Excess of Loss Reinsurance
LIMIT: (pounds)16,666,667 or US$/C$25,000,000 in excess of
(pounds)23,333,333 or US$/C$35,000,000
PERIOD: 12 months commencing 1st October 1994

B. REINSURED: Direct Line
TYPE: 2 Layers of Excess of Loss Reinsurance
PERIOD: 12 months commencing 1st October 1994

All other terms and conditions remain unchanged.

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Addendum as follows:

Signed in London, England, this 7th day of November 1994

For and on behalf of the Reassured: Peter Knight 44F/94
----------------------------------------
/CNA INTERNATIONAL REINSURANCE CO. LTD./
----------------------------------------

And
Signed in Hamilton, Bermuda, this 16 day of November 1995

For and on behalf of the Reinsurers: LaSalle Re Limited

/s/ Graham Waite
-----------------------------------------
Graham A. Waite
Underwriter
<PAGE>

TITLE: NON-OBLIGATORY QUOTA SHARE
----- REINSURANCE AGREEMENT

BETWEEN: CNA INTERNATIONAL REINSURANCE
------- COMPANY LIMITED

AND

LA SALLE RE LTD

COMMENCING: 1ST JANUARY, 1994
----------

<PAGE>

NON-OBLIGATORY QUOTA SHARE REINSURANCE AGREEMENT
------------------------------------------------

made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as 'the Reassured')

and

LA SALLE RE LTD
(hereinafter referred to as 'the Reinsurers')

PREAMBLE
- --------

ARTICLE 1
---------

BUSINESS REINSURED
- ------------------

ARTICLE 2
---------

COVER, LIMIT AND RETENTION
- --------------------------

The maximum aggregate cession hereto per country or territorial zone is
(P)30,000,000.

<PAGE>

-2-

ARTICLE 3
---------

TERRITORIAL SCOPE
- -----------------

This Agreement shall cover wherever cessions hereto cover other than losses
occurring in the United States of America and/or Canada except where such loss
exposures are incidental to the main hazard.

ARTICLE 4
---------

PERIOD
- ------

This Agreement takes effect on 1st January 1994 and applies to all business
written or renewed by the Reassured and signed into its 1994 and/or subsequent
Underwriting Years of Account.

For the purposes of this Agreement, the term of and participations in this
Agreement shall be divided into separate Underwriting Years, each for twelve
months commencing on 1st January.

Each cession made by the Reassured and all accounting transactions relating
thereto, shall be allocated by the Reassured to one Underwriting Year.

Notwithstanding anything to the contrary contained in this Article, either party
shall have the right to terminate this Agreement by giving the other party
notice:-

(b) if the other party has become insolvent or unable to pay its debts or has
lost the whole or any part of its paid up capital;
<PAGE>
-3-

(e) if the other party shall have failed to comply with any of the terms and
conditions of this Agreement.

ARTICLE 5
---------

FOLLOW THE FORTUNES
- -------------------

The Reinsurers' liability to the Reassured in respect of all cessions under this
Agreement shall follow the liability of the Reassured to its reinsureds.

ARTICLE 6
---------

FULL REINSURANCE
- ----------------

<PAGE>

-4-

ARTICLE 7
---------

EXCLUSIONS
- ----------

This Agreement does not cover:

A. any liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of war,
invasion, acts of foreign enemies, hostilities or war-like operations
(whether war be declared or not), civil war, mutiny, civil commotion
assuming the proportions of or amounting to a popular rising, insurrection,
rebellion, revolution, military or usurped power, martial law, confiscation
or nationalization or requisition or destruction of or damage to property
by or under the order of any Government or public or local authority.

In respect of losses arising in the United Kingdom only (other than in
respect of losses arising under those classes of business covered hereunder
which contain a War Inclusion Clause and such other classes of business
covered hereunder for which there is no Market requirement for such other
classes of business to contain a War Exclusion Clause by virtue of the
operation of the War and Civil War Exclusion Agreement and/or the War and
Civil War Risk Exclusion Agreement), this Agreement shall not cover any
liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of any act of
any person or persons acting on behalf of or in connection with any
organisation the objects of which are to include the overthrowing or
influencing of any de jure or de facto government by terrorism or by any
violent means.

B. the Reassured's interest whether direct or by way or reinsurance in loss
arising from claim or claims against an insured by another party or
parties.
<PAGE>

-5-

Notwithstanding the foregoing this Agreement shall not exclude:

1) Workers' Compensation and/or Employers' Liability losses arising from
the following perils:-

Fire, Lightning, Explosion, Structural Collapse, Windstorm, Hail,
Flood, Seismic Activity, Volcanic Eruption, Collision, Riots, Strikes,
Civil Commotion, Malicious Damage;

2) Any Physical Damage and/or Consequential loss coverage contingent
thereon effected by an insured on behalf of another party.

C. Financial Guarantee and Insolvency.

D. Nuclear Risks for those applicable classes of business and territories as
appropriate in accordance with the clause referred to below and which shall
form an integral part hereof, copies of which are on file with the
Reassured:-

NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1984)--WORLDWIDE
EXCLUDING U.S.A. AND CANADA--NMA 1975

ARTICLE 8
---------

PREMIUM
- -------

The maximum original Net Premium to be ceded to this Agreement for any one
Underwriting Year shall be $18,000,000.

<PAGE>

- 6 -

ARTICLE 9
---------

ADMINISTRATIVE PROCESSING FEE
- -----------------------------

ARTICLE 10
----------

LOSSES AND LOSS EXPENSES
- ------------------------

The Reinsurers shall benefit in their Quota Share proportion from any salvage or
recoveries effected by the Reassured for the benefit of itself and the
Reinsurers.

ARTICLE 11
----------

ACCOUNTS, REPORTS AND PAYMENTS
- ------------------------------

- 7 -

The quarterly accounts shall be rendered within forty-five days after the end of
each quarter. All accounts shall be rendered and settled in Sterling.

The Reassured shall furnish quarterly bordereaux of cessions hereto.

ARTICLE 12
----------

COMMUTATION
- -----------

ARTICLE 13
----------

LOSS RESERVES
- -------------

ARTICLE 14
----------

CURRENCY
- --------

- 8 -

ARTICLE 15
----------

INSOLVENCY OF THE REASSURED
- ---------------------------

- 9 -

ARTICLE 16
----------

DELAYS, ERRORS OR OMISSIONS
- ---------------------------

ARTICLE 17
----------

AMENDMENTS AND ALTERATIONS
- --------------------------

The terms herein contained comprise the whole Agreement between the Reassured
and the Reinsurers and may only be changed in writing, signed by or on behalf of
both parties.

ARTICLE 18
----------

ACCESS TO RECORDS
- -----------------

ARTICLE 19
----------

OFFSET
- ------

-10-

ARTICLE 20
----------

ARBITRATION
- -----------

1. All matters in difference between the parties arising under, out of or in
connection with this Agreement, including formation and validity, and
whether arising during or after the period of this Agreement, shall be
referred to an arbitration tribunal in the manner hereinafter set out.

3. Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
either of them or either of the parties may apply to the appointor for the
appointment of the third arbitrator. The three arbitrators shall decide by
majority. If no majority can be reached the verdict of the third arbitrator
shall prevail. He shall also act as chairman of the tribunal.

4. Unless the parties otherwise agree the arbitration tribunal shall consist
of persons (including those who have retired) with not less than ten years'
experience of insurance or reinsurance as persons engaged in the industry
itself or as lawyers or other professional advisers.

5. The arbitration tribunal shall, so far as is permissible under the law and
practice of the place of arbitration, have power to fix all procedural
rules for the holding of the arbitration including discretionary power to
make orders as to any matters which it may consider proper in the
circumstances of the case with regard to pleadings, discovery, inspection
of the documents, examination of witnesses and any other matter whatsoever
relating to the conduct of the arbitration and may receive and act upon
such evidence whether oral or written strictly admissible or not as it
shall in its discretion think fit.

<PAGE>

-11-

6. The appointor shall be the Chairman for the time being of ARIAS (UK) or if
he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ARIAS (UK). If for any
reason such persons decline or are unable to act, then the appointor shall
be the Judge of the appropriate Courts having jurisdiction at the place of
arbitration.

8. The place of arbitration may be chosen by the parties, but in default of
such choice, the place of arbitration shall be London, England.

9. The proper law of this Agreement shall be the law of England.

10. The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.

ARTICLE 21
----------

PARTICIPATION
- -------------

This Agreement obligates the Reinsurers for their proportion of the interests
and liabilities set forth in this Agreement.
<PAGE>

-12-

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Agreement as follows:

Signed in London, England, this 11th day of April, 1994

For and on behalf of the Reassured: /s/ H. Simons

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

CNA INTERNATIONAL REINSURANCE CO. LTD

-------------------------------------------------------
And

Signed in Hamilton, Bermuda, this 26th day of September, 1994.

For and on behalf of the Reinsurers. /s/ Guy Hengesbaugh
Guy Hengesbaugh
Chief Underwriter

LASALLE RE LIMITED

44F 94

<PAGE>
Exhibit 10.19

Reassured: CNA International Reinsurance Company Limited

CNA Reference:- 44 FIR

Period:- Continuous contract in respect of all business written by
the Reassured and signed into their 1994 and subsequent
Underwriting Years of Account

Subject to three months prior notice of cancellation to
expire at 31st December any year.

HEREON: SIGNING SLIP IN RESPECT OF 1996
UNDERWRITING YEAR OF ACCOUNT.

Type:- Quota Share Treaty

Class:- The Reassured's Account of PROPERTY
CATASTROPHE EXCESS OF LOSS TREATIES
(including specific peril aggregate excess of loss
written for a single territory) underwritten in their
London Office.

Excluding the Reinsured's interest whether direct or by
way of reinsurance in loss arising from claim or claims
against an Insured by another party or parties.

Notwithstanding the foregoing this reinsurance shall not
exclude:

a) Workers' Compensation and/or Employers' Liability
losses arising from the following perils:-

Fire, Lighting, Explosion, Structural Collapse,
Windstorm, Hail, Flood, Seismic Activity, Volcanic
Eruption, Collision, Riots, Strikes, Civil Commotion,
Malicious Damage.

b) Any Physical Damage and/or Consequential loss coverage
contingent thereon effected by an Insured on behalf of
another party.

Territorial Scope:- Worldwide excluding USA & Canada, other than incidental.

Treaty Detail:- To take 50% Quota Share of the Reassureds participation
subject to a maximum cession hereon of GBP 2,000,000
($3,000,000) any one programme. Cessions in currencies
other than sterling at rates of exchange as used in the
books of the Reassured.

<PAGE>

Rate:- Original Net Premium as Original.

Administrative
Processing Fee:- 3.00% on Original Net Rate.

Taxes:- As may be applicable on the original business.

Premium Reserve:- Not applicable.

Loss Reserve:- As may be applicable on the original business.

Cash Loss:- At Reassured's discretion, Minimum $5,000,000.

Accounts:- Quarterly Accounts in GBP and US$ separately on each year
of account. Presentation within 45 days of end of quarter
with settlement due within 30 days thereafter.

General
Conditions:- Monthly bordereaux of risks ceded
Full Reinsurance Clause
War Exclusion G51
Nuclear Energy Risks Exclusion Clause
(Reinsurance) 1984, NMA 1975 (Japanese Amendment)
Nuclear Incident Exclusion Clauses--Physical
Damage Reinsurance--USA & Canada
Excluding Financial Guarantee and Insolvency
Maximum Net Premium ceded hereon $22m
Maximum aggregate cession per country or Territorial zone
hereon GBP 30,000,000
Special cessions to be agreed by Reinsurers prior to
binding

Wording:- As before as far as applicable, any amendments to be
agreed.

[LOGO OF LASALLE RE LIMITED]

---------------
0 1 2 3 7 9 6
---------------

100% /s/ GW 1/3/96
---------------------------
NCAD/PNOC EX LOC/OCA

All amendments to be agreed

<PAGE>

ADDENDUM NO. 1
--------------

Attaching to and forming part of the Non-Obligatory Quota Share Reinsurance
Agreement made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as 'the Reassured')

and

LA SALLE RE LTD
(hereinafter referred to as 'the Reinsurers')

Effective 1st July 1994 the following changes are made to this Agreement:

1. ARTICLE 2, COVER, LIMIT AND RETENTION will be as follows and not as
heretofore:

The Reassured may cede and the Reinsurers shall accept by way of
reinsurance under this Agreement, 25% Quota Share of all cessions coming
within the scope of this Agreement, subject to a maximum Quota Share of
cessions hereto of (Pounds)2,000,000 or US$3,000,000 for any one programme.

The maximum aggregate cession hereto per country or territorial zone is
(Pounds)30,000,000.

2. ARTICLE 8, PREMIUM. The first paragraph will be as follows and not as
heretofore:

3. Notwithstanding anything contained in this Agreement to the contrary the
following Special Acceptances shall come within the terms of this
Agreement:

A. REINSURED: Hartford Re
TYPE: General Excess of Loss Reinsurance
LIMIT: (Pounds)16,666,667 or US$/C$25,000,000 in excess of
(Pounds)23,333,333 or US$/C$35,000,000
PERIOD: 12 months commencing 1st October 1994

B. REINSURED: Direct Line
TYPE: 2 Layers of Excess of Loss Reinsurance
PERIOD: 12 months commencing 1st October 1994

All other terms and conditions remain unchanged.

IN WITNESS WHEREOF the parties hereto have, by their duly authorized
representative, executed this Addendum as follows:

Signed in London, England, this 7th day of November 1994

For and on behalf of the Reassured: /s/ Peter Knight 44F/94
----------------------------------------
/CNA INTERNATIONAL REINSURANCE CO. LTD./
----------------------------------------

And

Signed in Hamilton, Bermuda, this 16th day of November 1995

For and on behalf of the Reinsurers: LaSalle Re Limited

/s/ Graham Waite
-----------------------
Graham A. Waite
Underwriter
<PAGE>

TITLE: NON-OBLIGATORY QUOTA SHARE
- ----- REINSURANCE AGREEMENT

BETWEEN: CNA INTERNATIONAL REINSURANCE
- ------- COMPANY LIMITED

AND

LA SALLE RE LTD

COMMENCING: 1ST JANUARY, 1994
- ----------
<PAGE>

NON-OBLIGATORY QUOTA SHARE REINSURANCE AGREEMENT
------------------------------------------------

made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as 'the Reassured')

and

LA SALLE RE LTD
(hereinafter referred to as 'the Reinsurers')

PREAMBLE
- --------

ARTICLE 1
---------

BUSINESS REINSURED
- ------------------

This Agreement applies to policies and/or contracts of insurance and/or
reinsurance allocated by the Reassured to its account of Property Catastrophe
Excess of Loss treaties (including specific peril aggregate excess of loss
written for a single territory) written or renewed by the Reassured in its
London Office.

ARTICLE 2
---------

COVER, LIMIT AND RETENTION
- --------------------------

The maximum aggregate cession hereto per country or territorial zone is
(Pounds)30,000,000.

<PAGE>

-2-

ARTICLE 3
---------

TERRITORIAL SCOPE
- -----------------

This Agreement shall cover wherever cessions hereto cover other than losses
occurring in the United States of America and/or Canada except where such loss
exposures are incidental to the main hazard.

ARTICLE 4
---------

PERIOD
- ------

This Agreement takes effect on 1st January 1994 and applies to all business
written or renewed by the Reassured and signed into its 1994 and/or subsequent
Underwriting Years of Account.

For the purposes of this Agreement, the term of and participations in this
Agreement shall be divided into separate Underwriting Years, each for twelve
months commencing on 1st January.

Each cession made by the Reassured and all accounting transactions relating
thereto, shall be allocated by the Reassured to one Underwriting Year.

Notwithstanding anything to the contrary contained in this Article, either party
shall have the right to terminate this Agreement by giving the other party
notice:-

(b) if the other party has become insolvent or unable to pay its debts or has
lost the whole or any part of its paid up capital;
<PAGE>

-3-

(e) if the other party shall have failed to comply with any of the terms and
conditions of this Agreement.

ARTICLE 5
---------

FOLLOW THE FORTUNES
- -------------------

The Reinsurers' liability to the Reassured in respect of all cessions under this
Agreement shall follow the liability of the Reassured to its reinsureds.

ARTICLE 6
---------

FULL REINSURANCE
- ----------------

-4-

ARTICLE 7
---------

EXCLUSIONS
- ----------

This Agreement does not cover:

In respect of losses arising in the United Kingdom only (other than in
respect of losses arising under those classes of business covered hereunder
which contain a War Inclusion Clause and such other classes of business
covered hereunder for which there is no Market requirement for such other
classes of business to contain a War Exclusion Clause by virtue of the
operation of the War and Civil War Exclusion Agreement and/or the War and
Civil War Risk Exclusion Agreement), this Agreement shall not cover any
liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of any act of
any person or persons acting on behalf of or in connection with any
organisation the objects of which are to include the overthrowing or
influencing of any de jure or de facto government by terrorism or by any
violent means.

B. the Reassured's interest whether direct or by way of reinsurance in loss
arising from claim or claims against an insured by another party or
parties.
<PAGE>

-5-

Notwithstanding the foregoing this Agreement shall not exclude:

1) Workers' Compensation and/or Employer's Liability losses arising from
the following perils:-

Fire, Lightning, Explosion, Structural Collapse, Windstorm, Hail,
Flood, Seismic Activity, Volcanic Eruption, Collision, Riots, Strikes,
Civil Commotion, Malicious Damage;

2) Any Physical Damage and/or Consequential loss coverage contingent
thereon effected by an insured on behalf of another party.

C. Financial Guarantee and Insolvency.

D. Nuclear Risks for those applicable classes of business and territories as
appropriate in accordance with the clause referred to below and which shall
form an integral part hereof, copies of which are on file with the
Reassured:-

NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE)
(1984) - WORLDWIDE EXCLUDING U.S.A. AND CANADA - NMA 1975

ARTICLE 8
---------

PREMIUM
- -------

The maximum Original Net Premium to be ceded to this Agreement for any one
Underwriting Year shall be $18,000,000.
<PAGE>

- 6 -

ARTICLE 9
---------

ADMINISTRATIVE PROCESSING FEE
- -----------------------------

ARTICLE 10
----------

LOSSES AND LOSS EXPENSES
- ------------------------

The Reinsurers shall benefit in their Quota Share proportion from any salvage or
recoveries effected by the Reassured for the benefit of itself and the
Reinsurers.

ARTICLE 11
----------

ACCOUNTS, REPORTS AND PAYMENTS
- ------------------------------

The Reassured shall render a separate quarterly statement of account for each
Underwriting Year of Account during which this Agreement is in force showing a
total of all premiums ceded to this Agreement during such quarter. The Reassured
shall also furnish a separate quarterly loss statement for each such
Underwriting Year of Account, showing losses paid, loss expenses and salvages
coming within the terms of this Agreement and entered into the Reassured's books
during such quarter.
<PAGE>

- 7 -

The quarterly accounts shall be rendered within forty-five days after the end of
each quarter. All accounts shall be rendered and settled in Sterling.

The Reassured shall furnish quarterly bordereaux of cessions hereto.

ARTICLE 12
----------

COMMUTATION
- -----------

ARTICLE 13
----------

LOSS RESERVES
- -------------

ARTICLE 14
----------

CURRENCY
- --------

- 8 -

ARTICLE 15
----------

INSOLVENCY OF THE REASSURED
- ---------------------------

ARTICLE 16
----------

DELAYS, ERRORS OR OMISSIONS

ARTICLE 17
----------

AMENDMENTS AND ALTERATIONS

The terms herein contained comprise the whole Agreement between the Reassured
and the Reinsurers and may only be changed in writing, signed by or on behalf of
both parties.

ARTICLE 18
----------

ACCESS TO RECORDS

ARTICLE 19
----------

OFFSET

<PAGE>

-10-

ARTICLE 20
----------

ARBITRATION
- -----------

1. All matters in difference between the parties arising under, out of or in
connection with this Agreement, including formation and validity, and
whether arising during or after the period of this Agreement, shall be
referred to an arbitration tribunal in the manner hereinafter set out.

3. Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
either of them or either of the parties may apply to the appointor for the
appointment of the third arbitrator. The three arbitrators shall decide by
majority. If no majority can be reached the verdict of the third arbitrator
shall prevail. He shall also act as chairman of the tribunal.

4. Unless the parties otherwise agree the arbitration tribunal shall consist
of persons (including those who have retired) with not less than ten years'
experience of insurance or reinsurance as persons engaged in the industry
itself or as lawyers or other professional advisers.

5. The arbitration tribunal shall, so far as is permissible under the law and
practice of the place of arbitration, have power to fix all procedural
rules for the holding of the arbitration including discretionary power to
make orders as to any matters which it may consider proper in the
circumstances of the case with regard to pleadings, discovery, inspection
of the documents, examination of witnesses and any other matter whatsoever
relating to the conduct of the arbitration and may receive and act upon
such evidence whether oral or written strictly admissible or not as it
shall in its discretion think fit.

<PAGE>

-11-

6. The appointor shall be the Chairman for the time being of ARIAS (UK) or if
he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ARIAS (UK). If for any
reason such persons decline or are unable to act, then the appointor shall
be the Judge of the appropriate Courts having jurisdiction at the place of
arbitration.

8. The place of arbitration may be chosen by the parties, but in default of
such choice, the place of arbitration shall be London, England.

9. The proper law of this Agreement shall be the law of England.

10. The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.

ARTICLE 21
----------

PARTICIPATION
- -------------

This Agreement obligates the Reinsurers for their proportion of the interests
and liabilities set forth in this Agreement.
<PAGE>

-12-

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Agreement as follows:

Signed in London, England, this 11th day of April 1994

For and on behalf of the Reassured: /s/ H. Simons

CNA INTERNATIONAL REINSURANCE CO. LTD

And

Signed in Hamilton, Bermuda, this 26th day of September 1994.

For and on behalf of the Reinsurers.
/s/ Guy Hengesbaugh
Guy Hengesbaugh
Chief Underwriter

LASALLE RE LIMITED

44F94

<PAGE>

Exhibit 10.20

Reassured:- CNA International Reinsurance Co. Ltd.

Period:- Continuous contract in respect of all business written by
the Reassured and signed into their 1994 and subsequent
Underwriting Years of Account

Subject to three months prior notice of cancellation to
expire at 31st December any year.

HEREON: SIGNING SLIP IN RESPECT OF 1994 UNDERWRITING
YEAR OF ACCOUNT.

Type:- Quota Share Treaty.

Class:- The Reassured's Account of PROPERTY CATASTROPHE EXCESS OF
LOSS TREATIES (including specific catastrophe peril
aggregate excess written for a single territory)
underwritten in their Amsterdam Branch Office.

Excluding the Reinsured's interest whether direct or by
way of reinsurance in loss arising from claim or claims
against an Insured by another party or parties.

Notwithstanding the foregoing this reinsurance shall not
exclude:

1) Worker's Compensation and/or Employer's Liability
losses arising from the following perils:-

Fire, Lightning, Explosion, Structural Collapse,
Windstorm, Hail, Flood, Seismic Activity, Volcanic
Eruption, Collision, Riots Strikes, Civil Commotion,
Malicious Damage.

2) Any Physical Damage and/or Consequential loss
coverage contingent thereon effected by an insured on
behalf of another party.

Territorial Scope:- Worldwide excluding USA & Canada. Except where
incidental.

Treaty Detail:- To take 75% Quota Share of the Reassureds participation
subject to a maximum cession hereon of
(Pounds)3,000,000 ($4,500,000) any one programme.
Cessions in currencies other than sterling at rates of
exchange as used in the books of the Reassured.

Rate:- Original Nett Premium to the Reassured.

Administrative
Processing Fee:- 2.50% O.N.P.

Taxes:- As may be applicable on the original business.

Premium Reserve:- Not applicable

Loss Reserve:- As may be applicable on the original business.
<PAGE>

Cash Loss:- At Reassured's discretion, Minimum $2,000,000.

Accounts:- Quarterly Accounts in (pounds) and US$ separately on
each year of account. Presentation within 45 days of end
of each quarter with settlement due within 30 days
thereafter.

General Conditions:- Monthly bordereaux of risks ceded
Full Reinsurance Clause
War Exclusion Clause G51
Nuclear Energy Risks Exclusion Clause
(Reinsurance) 1984, NMA 1975 (Japanese Amendment)
Nuclear Incident Exclusion Clauses - Physical
Damage Reinsurance - USA & Canada
Excluding treaties classified as worldwide or worldwide
Ex-USA
Excluding Financial Guarantee and Insolvency
Maximum Net Premium ceded hereon $7.0m
Maximum aggregate cession per country or territorial zone
hereon (pounds) 20,000,000

Wording:- To be agreed

/s/ Guy Hengesbaugh
- --------------------
Mr. Guy Hengesbaugh
Chief Underwriter
LaSalle Re. Ltd.

Ref. No. 1236/94
<PAGE>

NON-OBLIGATORY QUOTA SHARE REINSURANCE AGREEMENT
------------------------------------------------

made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as "the Reassured")

and

LA SALLE RE LTD
(hereinafter referred to as "the Reinsurers")

PREAMBLE
- --------

ARTICLE 1
---------

BUSINESS REINSURED
- ------------------

This Agreement applies to policies and/or contracts of insurance and/or
reinsurance allocated by the Reassured to its account of Property Catastrophe
Excess of Loss Treaties (including specific catastrophe peril aggregate excess
written for a single territory) written or renewed by the Reassured in its
Amsterdam Branch Office.

ARTICLE 2
---------

COVER, LIMIT AND RETENTION
- --------------------------

The Reassured may cede and the Reinsurers shall accept by way of reinsurance
under this Agreement, 75% Quota Share of all cessions coming within the scope
of this Agreement, subject to a maximum Quota Share of cessions hereto of
(Pounds)3,000,000 or US$4,500,000 for any one programme.

The Reassured shall retain the remaining 25% Quota Share for its own account
but, without prejudice to the above, shall be at liberty to protect that
retention by way of reinsurance for its own account and benefit.

The maximum aggregate cession hereto per country or territorial zone is
(Pounds)30,000,000.

<PAGE>
- 2 -

ARTICLE 3
---------

TERRITORIAL SCOPE
- -----------------

This Agreement shall cover wherever cessions hereto cover other than losses
occurring in the United States of America and/or Canada except where such loss
exposures are incidental to the main hazard.

ARTICLE 4
---------

PERIOD
- ------

This Agreement takes effect on 1st January 1994 and applies to all business
written or renewed by the Reassured and signed into its 1994 and/or subsequent
Underwriting Years of Account.

For the purposes of this Agreement, the term of and participations in this
Agreement shall be divided into separate Underwriting Years, each for twelve
months commencing on 1st January.

Each cession made by the Reassured and all accounting transactions relating
thereto, shall be allocated by the Reassured to one Underwriting Year.

Notwithstanding anything to the contrary contained in this Article, either party
shall have the right to terminate this Agreement by giving the other party
notice:-

<PAGE>

-3-

(b) if the other party has become insolvent or unable to pay its debts or has
lost the whole or any part of its paid up capital;

(e) if the other party shall have failed to comply with any of the terms and
conditions of this Agreement.

ARTICLE 5
---------

FOLLOW THE FORTUNES
- -------------------

The Reinsurers' liability to the Reassured in respect of all cessions under this
Agreement shall follow the liability of the Reassured to its reinsureds.

ARTICLE 6
---------

FULL REINSURANCE
- ----------------

The Reinsurers agree to follow and abide by all agreements, actions and/or
settlements made by the Reassured and to agree, with or without notice, all
alterations and/or additions and/or

<PAGE>
-4-

extensions made under the original cessions subsequent to the effecting of this
Agreement, subject to the conditions of this Agreement.

ARTICLE 7
---------

EXCLUSIONS

This Agreement does not cover:

A: any liability assumed by the Reassured for loss or damage directly
or indirectly occasioned by, happening through or in consequence of war,
invasion, acts of foreign enemies, hostilities or war-like operations
(whether war be declared or not), civil war, mutiny, civil commotion
assuming the proportions of or amounting to a popular rising, insurrection,
rebellion, revolution, military or usurped power, martial law, confiscation
or nationalisation or requisition or destruction of or damage to property
by or under the order of any Government or public or local authority.

In respect of losses arising in the United Kingdom only (other than in
respect of losses arising under those classes of business covered hereunder
which contain a War Inclusion Clause and such other classes of business
covered hereunder for which there is no Market requirement for such other
classes of business to contain a War Exclusion Clause by virtue of the
operation of the War and Civil War Exclusion Agreement and/or the War and
Civil War Risk Exclusion Agreement), this Agreement shall not cover any
liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of any act of
any person or persons acting on behalf of or in connection with any
organisation the objects of which are to include the overthrowing or
influencing of any de jure or de facto government by terrorism or by any
violent means.

<PAGE>

-5-

B. the Reassured's interest whether direct or by way of reinsurance in loss
arising from claim or claims against an insured by another party or
parties.

Notwithstanding the foregoing this Agreement shall not exclude:

1) Workers' Compensation and/or Employers' Liability losses arising from
the following perils:--

Fire, Lightning, Explosion, Structural Collapse, Windstorm, Hail,
Flood, Seismic Activity, Volcanic Eruption, Collision, Riots, Strikes,
Civil Commotion, Malicious Damage;

2) Any Physical Damage and/or Consequential loss coverage contingent
thereon effected by an insured on behalf of another party.

C. Financial Guarantee and Insolvency.

D. Nuclear Risks for those applicable classes of business and territories as
appropriate in accordance with the clause referred to below and which shall
form an integral part hereof, copies of which are on file with the
Reassured:--

NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1984)--WORLDWIDE
EXCLUDING U.S.A. AND CANADA--NMA 1975

Notwithstanding the provisions of this Clause, in respect of Japanese
business certain liabilities, the type of which by market practice and
custom have not been declared to the Japanese Nuclear Pool shall not fall
within the scope of this exclusion.

ARTICLE 8
---------

PREMIUM
- -------

In consideration of the liabilities undertaken by the Reinsurers in accordance
with the terms of this Agreement, the Reassured shall pay to the Reinsurers
their 75% Quota Share proportion of the Reassured's Original Net Premium in
respect of all cessions hereto.

<PAGE>

- 6 -

The maximum Original Net Premium to be ceded to this Agreement for any one
Underwriting Year shall be $7,000,000.

ARTICLE 9
---------

ADMINISTRATIVE PROCESSING FEE
- -----------------------------

ARTICLE 10
----------

LOSSES AND LOSS EXPENSES
- ------------------------

The Reinsurers shall benefit in their Quota Share proportion from any salvage or
recoveries effected by the Reassured for the benefit of itself and the
Reinsurers.

Losses which the Reassured has paid shall be debited to the Reinsurers in the
quarterly accounts rendered in accordance with Article 11, "Accounts, Reports
and Payments" but, in the event of the Reassured sustaining a loss in respect
of which the 100% Quota Share proportion amounts to or exceeds $2,000,000 any
one occurrence, the Reassured shall have the option of requiring the Reinsurers
to effect payment as soon as practicable upon submission of proof of loss.
<PAGE>

- 7 -

ARTICLE 11
----------

ACCOUNTS, REPORTS AND PAYMENTS
- ------------------------------

The Reassured shall render a separate quarterly statement of account for each
Underwriting Year of Account during which this Agreement is in force showing
a total of all premiums ceded to this Agreement during such quarter. The
Reassured shall also furnish a separate quarterly loss statement for each such
Underwriting Year of Account, showing losses paid, loss expenses and salvages
coming within the terms of this Agreement and entered into the Reassured's books
during such quarter.

The quarterly accounts shall be rendered within forty-five days after the end of
each quarter. All accounts shall be rendered and settled in Sterling.

Balances due to the Reinsurers shall be paid delivery of the accounts, balances
due to the Reassured shall be paid together with the confirmation but not later
than thirty days after the receipt of the accounts. In case of objections,
however, the amount not in dispute shall be paid at once and the difference as
soon as agreement has been reached.

The Reassured shall furnish quarterly bordereaux of cessions hereto.

ARTICLE 12
----------

COMMUTATION
- -----------

ARTICLE 13
----------

LOSS RESERVES
- -------------

- 8 -

ARTICLE 14
----------

CURRENCY
- --------

ARTICLE 15
----------

INSOLVENCY OF THE REASSURED
- ---------------------------

-9-

ARTICLE 16
----------

DELAYS, ERRORS OR OMISSIONS
- ---------------------------

ARTICLE 17
----------

AMENDMENTS AND ALTERATIONS
- --------------------------

The terms herein contained comprise the whole Agreement between the Reassured
and the Reinsurers and may only be changed in writing, signed by or on behalf of
both parties.

ARTICLE 18
----------

ACCESS TO RECORDS
- -----------------

ARTICLE 19
----------

OFFSET
- ------

- 10 -

ARTICLE 20
----------

ARBITRATION
- -----------

1. All matters in difference between the parties arising under, out of or in
connection with this Agreement, including formation and validity, and
whether arising during or after the period of this Agreement, shall be
referred to an arbitration tribunal in the manner hereinafter set out.

3. Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
either of them or either of the parties may apply to the appointor for the
appointment of the third arbitrator. The three arbitrators shall decide by
majority. If no majority can be reached the verdict of the third arbitrator
shall prevail. He shall also act as chairman of the tribunal.

4. Unless the parties otherwise agree the arbitration tribunal shall consist
of persons (including those who have retired) with not less than ten years'
experience of insurance or reinsurance as persons engaged in the industry
itself or as lawyers or other professional advisers.

<PAGE>

- 11 -

discovery, inspection of the documents, examination of witnesses and any
other matter whatsoever relating to the conduct of the arbitration and may
receive and act upon such evidence whether oral or written strictly
admissible or not as it shall in its discretion think fit.

6. The appointor shall be the Chairman for the time being of ARIAS (UK) or if
he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ARIAS (UK). If for any
reason such persons decline or are unable to act, then the appointor shall
be the Judge of the appropriate Courts having jurisdiction at the place of
arbitration.

8. The place of arbitration may be chosen by the parties, but in default of
such choice, the place of arbitration shall be Amsterdam.

9. The proper law of this Agreement shall be the law of the Netherlands.

10. The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.

ARTICLE 21
----------

PARTICIPATION
- -------------

This Agreement obligates the Reinsurers for their proportion of the interests
and liabilities set forth in this Agreement.

<PAGE>
-12-

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Agreement as follows:

Signed in Amsterdam, the Netherlands this 7th day of April, 1994

For and on behalf of the Reassured: /s/ Jon Sharland

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

CNA INTERNATIONAL REINSURANCE CO. LTD.

-----------------------------------------------------
And

Signed in Hamilton, Bermuda, this 26th day of September, 1994.

For and on behalf of the Reinsurers. /s/ Guy Hengesbaugh
Guy Hengesbaugh
Chief Underwriter

LASALLE RE LIMITED

45F94

<PAGE>
EXHIBIT 10.21

[LOGO OF CNA]

Attaching to and forming an integral part of Continuous Contract No. 45 FIR
between:-

CNA International Reinsurance Company Limited

Amsterdam Branch (The Reassured)

and

La Salle Re Limited (The Reinsurer)

Noted and agreed with effect from 1st January, 1995 the following amendments to
the contract are agreed:-

Treaty Detail:- To take 75% Quota Share of the Reassureds
participation subject to a maximum cession hereon of
GBP3,000,000 (US$4,500,000) any one programme.
Cession in currencies other than sterling at rates of
exchange as used in the books of the Reassured.

General Conditions:- Maximum aggregate cession per country or territorial
zone hereon GBP30,000,000.

All other terms and conditions remain unaltered.

Signed on behalf of Signed on behalf of
CNA International Reinsurance La Salle Re Limited
Company Limited

/s/ D J Ridpath /s/ Graham Waite
- -------------------- ----------------------------
D J Ridpath Graham Waite
Vice President & Underwriter

June 25th, 1996

Directors: VH Blake (Chairman), WJ Adamson, Jr. (USA)(President), DJA Trace
F.C.A., HG Simons F.C.I.I., Pieter van Nek, VA Monro M.I.P.D.
Registered Office: Fountain House, 125-135 Fenchurch Street, London EC3M 5DJ.
Registered in England No. 1086556. A member of the CNA Financial Group.

<PAGE>

45 FIR

DRAFT

Reassured:- CNA International Reinsurance Co Ltd

Period:- Continuous contract in respect of all business written by
the Reassured and signed into their 1994 and subsequent
Underwriting Years of Account

Subject to three months prior notice of cancellation to
expire at 31st December any year.

HEREON: SIGNING SLIP IN RESPECT OF 1995 UNDERWRITING YEAR
OF ACCOUNT.

Type:- Quota Share Treaty

Class:- The Reassured's Account of
PROPERTY CATASTROPHE EXCESS OF LOSS TREATIES (including
specific catastrophe peril aggregate excess of loss
written for a single territory) underwritten in their
Amsterdam Branch Office.

Excluding the Reinsured's interest whether direct or by
way of reinsurance in loss arising from claim or claims
against an insured by another party or parties.

Notwithstanding the foregoing this reinsurance shall not
exclude:

1) Workers' Compensation and/or Employers' Liability
losses arising from the following perils:-

Fire, Lightning, Explosion, Structural Collapse,
Windstorm, Hail, Flood, Seismic Activity, Volcanic
Eruption, Collision, Riots, Strikes, Civil
Commotion, Malicious Damage.

2) Any Physical Damage and/or Consequential loss
coverage contingent thereon effected by an Insured
on behalf of another party.

Territorial Scope:- Worldwide excluding USA & Canada. Except where
incidental.

Treaty Detail:- To take 75% Quota Share of the Reassureds participation
subject to a maximum cession hereon of L3,750,000
($6,625,000) any one programme. Cessions in currencies
other than starting at rates of exchange as used in the
books of the Reassured.

Rate:- Original Nett Premium to the Reassured.

Administrative
Processing Fee:- 2.50% O.N.P.

Taxes:- As may be applicable on the original business.

Premium Reserve:- Not applicable

Loss Reserve:- As may be applicable on the original business.

<PAGE>

Cash Loss:- At Reassured's discretion, Minimum $2,000,000.

Accounts:- Quarterly Accounts in L and US$ separately on each year
of account. Presentation within 45 days of end of quarter
with settlement due within 30 days thereafter.

General
Conditions:- Monthly bordereaux of risks ceded
Full Reinsurance Clause
War Exclusion G51
Nuclear Energy Risks Exclusion Clause
(Reinsurance) 1984, NMA 1975 (Japanese Amendment)
Nuclear Incident Exclusion Clauses--Physical
Damage Reinsurance--USA & Canada
Excluding Financial Guarantee and Insolvency
Maximum Net Premium ceded hereon $7.0m
Maximum aggregate cession per country or territorial zone
hereon L20,000,000
Special cessions to be agreed by Reinsurers prior to
binding

Wording:- To be agreed

/s/ Graham Waite
- ---------------------------
Graham A. Waite
Underwriter
LaSalle Re Limited

Ref. No. T.B.A. 1236/95

<PAGE>

NON-OBLIGATORY QUOTA SHARE REINSURANCE AGREEMENT
------------------------------------------------

made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as 'the Reassured')

and

LA SALLE RE LTD
(hereinafter referred to as 'the Reinsurers')

PREAMBLE

ARTICLE 1
---------

BUSINESS REINSURED

This Agreement applies to policies and/or contracts of insurance and/or
reinsurance allocated by the Reassured to its account of Property Catastrophe
Excess of Loss Treaties (including specific catastrophe peril aggregate excess
written for a single territory) written or renewed by the Reassured in its
Amsterdam Branch Office.

ARTICLE 2
---------

COVER, LIMIT AND RETENTION

The Reassured may cede and the Reinsurers shall accept by way of reinsurance
under this Agreement, 75% Quota Share of all cessions coming within the scope of
this Agreement, subject to a maximum Quota Share of cessions hereto of (Pounds)
3,000,000 or US$4,500,000 for any one programme.

The maximum aggregate cession hereto per country or territorial zone is (Pounds)
30,000,000.

<PAGE>

- 2 -

ARTICLE 3
---------

TERRITORIAL SCOPE
- -----------------

This Agreement shall cover wherever cessions hereto cover other than losses
occurring in the United States of America and/or Canada except where such loss
exposures are incidental to the main hazard.

ARTICLE 4
---------

PERIOD
- ------

This Agreement takes effect on 1st January 1994 and applies to all business
written or renewed by the Reassured and signed into its 1994 and/or subsequent
Underwriting Years of Account.

For the purposes of this Agreement, the term of and participations in this
Agreement shall be divided into separate Underwriting Years, each for twelve
months commencing on 1st January.

Each cession made by the Reassured and all accounting transactions relating
thereto, shall be allocated by the Reassured to one Underwriting Year.

Notwithstanding anything to the contrary contained in this Article, either party
shall have the right to terminate this Agreement by giving the other party
notice:-

- 3 -

(b) if the other party has become insolvent or unable to pay its debts or has
lost the whole or any part of its paid up capital;

(e) if the other party shall have failed to comply with any of the terms and
conditions of this Agreement.

All notices of termination in accordance with any of the provisions of this
Article shall be by Telex or telegram and shall be deemed to be served upon
despatch or, where communication between the parties are interrupted, upon
attempted despatch.

ARTICLE 5
---------

FOLLOW THE FORTUNES
- -------------------

The Reinsurers' liability to the Reassured in respect of all cessions under this
Agreement shall follow the liability of the Reassured to its reinsureds.

ARTICLE 6
---------

FULL REINSURANCE
- ----------------

The Reinsurers agree to follow and abide by all agreements, actions and/or
settlements made by the Reassured and to agree, with or without notice, all
alterations and/or additions and/or
<PAGE>

- 4 -

extensions made under the original cessions subsequent to the effecting of this
Agreement, subject to the conditions of this Agreement.

ARTICLE 7
---------

EXCLUSIONS
- ----------

This Agreement does not cover:

However, the foregoing exclusion shall not apply to those classes of
business which are written are in accordance with the War and Civil War
Exclusion Agreement and/or the War and Civil War Risk Exclusion Agreement
nor to business outside the scope of such Agreements unless such classes of
business are not covered by this Agreement.

In respect of losses arising in the United Kingdom only (other than in
respect of losses arising under those classes of business covered hereunder
which contain a War Inclusion Clause and such other classes of business
covered hereunder for which there is no Market requirement for such other
classes of business to contain a War Exclusion Clause by virtue of the
operation of the War and Civil War Exclusion Agreement and/or the War and
Civil War Risk Exclusion Agreement), this Agreement shall not cover any
liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of any act of
any person or persons acting on behalf of or in connection with any
organisation the objects of which are to include the overthrowing or
influencing of any de jure or de facto government by terrorism or by any
violent means.

<PAGE>

- 5 -

B. the Reassured's interest whether direct or by way of reinsurance in loss
arising from claim or claims against an insured by another party or
parties.

Notwithstanding the foregoing this Agreement shall not exclude:

1) Workers' Compensation and/or Employers' Liability losses arising from
the following perils:-

Fire, Lightning, Explosion, Structural Collapse, Windstorm, Hail,
Flood, Seismic Activity, Volcanic Eruption, Collision, Riots, Strikes,
Civil Commotion, Malicious Damage;

2) Any Physical Damage and/or Consequential loss coverage contingent
thereon effected by an insured on behalf of another party.

C. Financial Guarantee and Insolvency.

D. Nuclear Risks for those applicable classes of business and territories as
appropriate in accordance with the clause referred to below and which shall
form an integral part hereof, copies of which are on file with the
Reassured:-

NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1984) -- WORLDWIDE
EXCLUDING U.S.A. AND CANADA -- NMA 1975

ARTICLE 8
---------

PREMIUM
- -------

<PAGE>

-6-

The maximum Original Net Premium to be ceded to this Agreement for any one
Underwriting Year shall be $7,000,000.

ARTICLE 9
---------

ADMINISTRATIVE PROCESSING FEE
- -----------------------------

ARTICLE 10
----------

LOSSES AND LOSS EXPENSES
- ------------------------

The Reinsurers shall benefit in their Quota Share proportion from any salvage or
recoveries effected by the Reassured for the benefit of itself and the
Reinsurers.

Losses which the Reassured has paid shall be debited to the Reinsurers in the
quarterly accounts rendered in accordance with Article 11, "Accounts, Reports
and Payments" but, in the event of the Reassured sustaining a loss in respect of
which the 100% Quota Share proportion amounts to or exceeds $2,000,000 any one
occurrence, the Reassured shall have the option of requiring the Reinsurers to
effect payment as soon as practicable upon submission of proof of loss.
<PAGE>

-7-

ARTICLE 11
----------

ACCOUNTS, REPORTS AND PAYMENTS
- ------------------------------

The Reassured shall render a separate quarterly statement of account for each
Underwriting Year of Account during which this Agreement is in force showing a
total of all premiums ceded to this Agreement during such quarter. The Reassured
shall also furnish a separate quarterly loss statement for each such
Underwriting Year of Account, showing losses paid, loss expenses and salvages
coming within the terms of this Agreement and entered into the Reassured's books
during such quarter.

The quarterly accounts shall be rendered within forty-five days after the end of
each quarter. All accounts shall be rendered and settled in Sterling.

The Reassured shall furnish quarterly bordereaux of cessions hereto.

ARTICLE 12
----------

COMMUTATION
- -----------

ARTICLE 13
----------

LOSS RESERVES
- -------------

-8-

ARTICLE 14
----------

CURRENCY
- --------

ARTICLE 15
----------

INSOLVENCY OF THE REASSURED
- ---------------------------

-9-

ARTICLE 16
----------

DELAYS, ERRORS OR OMISSIONS
- ---------------------------

ARTICLE 17
----------

AMENDMENTS AND ALTERATIONS
- --------------------------

The terms herein contained comprise the whole Agreement between the Reassured
and the Reinsurers and may only be changed in writing, signed by or on behalf of
both parties.

ARTICLE 18
----------

ACCESS TO RECORDS
- -----------------

ARTICLE 19
----------

OFFSET
- ------

-10-

ARTICLE 20
----------

ARBITRATION
- -----------

1. All matters in difference between the parties arising under, out of or in
connection with this Agreement, including formation and validity, and
whether arising during or after the period of this Agreement, shall be
referred to an arbitration tribunal in the manner hereinafter set out.

3. Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
either of them or either of the parties may apply to the appointor for the
appointment of the third arbitrator. The three arbitrators shall decide by
majority. If no majority can be reached the verdict of the third arbitrator
shall prevail. He shall also act as chairman of the tribunal.

4. Unless the parties otherwise agree the arbitration tribunal shall consist
of persons (including those who have retired) with not less than ten years'
experience of insurance or reinsurance as persons engaged in the industry
itself or as lawyers or other professional advisers.

<PAGE>

-11-

6. The appointor shall be the Chairman for the time being of ARIAS (UK) or if
he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ARIAS (UK). If for any
reason such persons decline or are unable to act, then the appointor shall
be the Judge of the appropriate Courts having jurisdiction at the place of
arbitration.

8. The place of arbitration may be chosen by the parties, but in default of
such choice, the place of arbitration shall be Amsterdam.

9. The proper law of this Agreement shall be the law of the Netherlands.

10. The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.

ARTICLE 21
----------

PARTICIPATION

This Agreement obligates the Reinsurers for their proportion of the interests
and liabilities set forth in this Agreement.
<PAGE>

-12-

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Agreement as follows:

Signed in Amsterdam, the Netherlands this 7th day of April 1994

For and on behalf of the Reassured: /s/ Jon Sharland

CNA INTERNATIONAL REINSURANCE CO. LTD.

And

Signed in Hamilton, Bermuda, this 26th day of September 1994.

For and on behalf of the Reinsurers.
/s/ Guy Hengesbaugh
Guy Hengesbaugh
Chief Underwriter

LASALLE RE LIMITED

45F94

<PAGE>

Exhibit 10.22

Reasurred:- CNA International Reinsurance Company Limited

CNA Reference:- 45 FIR

Period:- Continuous contract in respect of all business written by
the Reassured and signed into their 1994 and subsequent
Underwriting Years of Account.

Subject to three months prior notice of cancellation to
expire at 31st December any year.

HEREON: SIGNING SLIP IN RESPECT OF 1996 UNDERWRITING YEAR
OF ACCOUNT.

Type:- Quota Share Treaty.

Class:- The Reassured's Account of PROPERTY CATASTROPHE EXCESS OF
LOSS TREATIES (including specific peril aggregate excess
of loss written for a single territory) underwritten in
their Amsterdam Branch Office.

Excluding the Reinsured's interest whether direct or by
way of reinsurance in loss arising from claim or claims
against an Insured by another party or parties.

Notwithstanding the foregoing this reinsurance shall not
exclude:

a) Workers' Compensation and/or Employers' Liability losses
arising from the following perils:-

Fire, Lightning, Explosion, Structural Collapse,
Windstorm, Hail, Flood, Seismic Activity, Volcanic
Eruption, Collision, Riots, Strikes, Civil Commotion,
Malicious Damage.

b) Any Physical Damage and/or Consequential loss coverage
contingent thereon effected by an Insured on behalf of
another party.

Territorial Scope:- Worldwide excluding USA & Canada, other than incidental.

Treaty Detail:- To take 75% Quota Share of the Reassureds participation
subject to a maximum cession hereon of GBP 3,000,000
($4,500,000) any one programme. Cessions in currencies
other than sterling at rates of exchange as used in the
books of the Reassured.
<PAGE>

Rate:- Original Net Premium as Original.

Administrative
Processing Fee:- 3.00% on Original Net Rate.

Taxes:- As original.

Premium Reserve:- Not applicable.

Loss Reserve:- As may be applicable on the original business.

Cash Loss:- At Reassured's discretion, Minimum $2,000,000.

Accounts:- Quarterly Accounts in GBP and US$ separately on each year
of account. Presentation within 45 days of end of quarter
with settlement due within 30 days thereafter.

General
Conditions:- Monthly bordereaux of risks ceded
Full Reinsurance Clause
War Exclusion G51
Nuclear Energy Risks Exclusion Clause
(Reinsurance) 1984, NMA 1975 (Japanese Amendment)
Nuclear Incident Exclusion Clauses - Physical
Damage Reinsurance - USA & Canada
Excluding Financial Guarantee and Insolvency
Maximum Net Premium ceded hereon $7.0m
Maximum aggregate cession per country or territorial
zone hereon GBP 30,000,000
Special cessions to be agreed by Reinsurers prior to
binding

Wording:- As before as far as applicable, any amendments to be
agreed.

[LASALLE RE LIMITED LOGO]

0123696

100% /s/ GW 1/3/96
-----------------------------
NCAD PNOC EX LOC/OCA

All amendments to be agreed

<PAGE>

NON-OBLIGATORY QUOTA SHARE REINSURANCE AGREEMENT

made between

CNA INTERNATIONAL REINSURANCE COMPANY LIMITED
(hereinafter referred to as "the Reassured")

and

LA SALLE RE LTD
(hereinafter referred to as "the Reinsurers")

PREAMBLE
- --------

ARTICLE 1
---------

BUSINESS REINSURED
- ------------------

This Agreement applies to policies and/or contracts of insurance and/or
reinsurance allocated by the Reassured to its account of Property Catastrophe
Excess of Loss Treaties (including specific catastrophe peril aggregate excess
written for a single territory) written or renewed by the Reassured in its
Amsterdam Branch Office.

ARTICLE 2
---------

COVER, LIMIT AND RETENTION
- --------------------------

The Reassured may cede and the Reinsurers shall accept by way of reinsurance
under this Agreement, 75% Quota Share of all cessions coming within the scope of
this Agreement, subject to a maximum Quota Share of cessions hereto of
(Pounds)3,000,000 or US$4,500,000 for any one programme.

The maximum aggregate cession hereto per country or territorial zone is
(Pounds)30,000,000.

<PAGE>

- 2 -

ARTICLE 3
---------

TERRITORIAL SCOPE
- -----------------

This Agreement shall cover wherever cessions hereto cover other than losses
occurring in the United States of America and/or Canada except where such loss
exposures are incidental to the main hazard.

ARTICLE 4
---------

PERIOD
- ------

This Agreement takes effect on 1st January 1994 and applies to all business
written or renewed by the Reassured and signed into its 1994 and/or subsequent
Underwriting Years of Account.

For the purposes of this Agreement, the term of and participations in this
Agreement shall be divided into separate Underwriting Years, each for twelve
months commencing on 1st January.

Each cession made by the Reassured and all accounting transactions relating
thereto, shall be allocated by the Reassured to one Underwriting Year.

Notwithstanding anything to the contrary contained in this Article, either party
shall have the right to terminate this Agreement by giving the other party
notice:-

<PAGE>

- 3 -

(b) if the other party has become insolvent or unable to pay its debts or has
lost the whole or any part of its paid up capital;

(e) if the other party shall have failed to comply with any of the terms and
conditions of this Agreement.

ARTICLE 5
---------

FOLLOW THE FORTUNES
- -------------------

The Reinsurers' liability to the Reassured in respect of all cessions under this
Agreement shall follow the liability of the Reassured to its reinsureds.

ARTICLE 6
---------

FULL REINSURANCE
- ----------------

The Reinsurers agree to follow and abide by all agreements, actions and/or
settlements made by the Reassured and to agree, with or without notice, all
alterations and/or additions and/or
<PAGE>

- 4 -

extensions made under the original cessions subsequent to the effecting of this
Agreement, subject to the conditions of this Agreement.

ARTICLE 7
---------

EXCLUSIONS
- ----------

This Agreement does not cover:

In respect of losses arising in the United Kingdom only (other than in
respect of losses arising under those classes of business covered hereunder
which contain a War Inclusion Clause and such other classes of business
covered hereunder for which there is no Market requirement for such other
classes of business to contain a War Exclusion Clause by virtue of the
operation of the War and Civil War Exclusion Agreement and/or the War and
Civil War Risk Exclusion Agreement), this Agreement shall not cover any
liability assumed by the Reassured for loss or damage directly or
indirectly occasioned by, happening through or in consequence of any act of
any person or persons acting on behalf of or in connection with any
organisation the objects of which are to include the overthrowing or
influencing of any de jure or de facto government by terrorism or by any
violent means.
<PAGE>

- 5 -

B. the Reassured's interest whether direct or by way of reinsurance in loss
arising from claim or claims against an insured by another party or
parties.

Notwithstanding the foregoing this Agreement shall not exclude:

1) Workers' Compensation and/or Employers' Liability losses arising from
the following perils:-

Fire, Lightning, Explosion, Structural Collapse, Windstorm, Hail,
Flood, Seismic Activity, Volcanic Eruption, Collision, Riots,
Strikes, Civil Commotion, Malicious Damage;

2) Any Physical Damage and/or Consequential loss coverage contingent
thereon effected by an insured on behalf of another party.

C. Financial Guarantee and Insolvency.

D. Nuclear Risks for those applicable classes of business and territories as
appropriate in accordance with the clause referred to below and which shall
form an integral part hereof, copies of which are on file with the
Reassured:-

NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1984) - WORLDWIDE
EXCLUDING U.S.A. AND CANADA - NMA 1975

ARTICLE 8
---------
PREMIUM
- -------

-6-

The maximum Original Net Premium to be ceded to this Agreement for any one
Underwriting Year shall be $7,000,000.

ARTICLE 9
---------

ADMINISTRATIVE PROCESSING FEE

ARTICLE 10
----------

LOSSES AND LOSS EXPENSES

The Reinsurers shall benefit in their Quota Share proportion from any salvage
or recoveries effected by the Reassured for the benefit of itself and the
Reinsurers.

Losses which the Reassured has paid shall be debited to the Reinsurers in the
quarterly accounts rendered in accordance with Article 11, "Accounts, Reports
and Payments" but, in the event of the Reassured sustaining a loss in respect of
which the 100% Quota Share proportion amounts to or exceeds $2,000,000 any one
occurrence, the Reassured shall have the option of requiring the Reinsurers to
effect payment as soon as practicable upon submission of proof of loss.

<PAGE>

-7-

ARTICLE 11
----------

ACCOUNTS, REPORTS AND PAYMENTS

The Reassured shall render a separate quarterly statement of account for each
Underwriting Year of Account during which this Agreement is in force showing
a total of all premiums ceded to this Agreement during such quarter. The
Reassured shall also furnish a separate quarterly loss statement for each such
Underwriting Year of Account, showing losses paid, loss expenses and salvages
coming within the terms of this Agreement and entered into the Reassured's books
during such quarter.

The quarterly accounts shall be rendered within forty-five days after the end of
each quarter. All accounts shall be rendered and settled in Sterling.

The Reassured shall furnish quarterly bordereaux of cessions hereto.

ARTICLE 12
----------

COMMUTATION

ARTICLE 13
----------

LOSS RESERVES

<PAGE>

-8-

ARTICLE 14
----------

CURRENCY

ARTICLE 15
----------

INSOLVENCY OF THE REASSURED

<PAGE>

-9-

ARTICLE 16
----------

DELAYS, ERRORS OR OMISSIONS
- ---------------------------

ARTICLE 17
----------

AMENDMENTS AND ALTERATIONS
- --------------------------

The terms herein contained comprise the whole Agreement between the Reassured
and the Reinsurers and may only be changed in writing, signed by or on behalf of
both parties.

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

ARTICLE 19
----------

OFFSET
- ------

<PAGE>

-10-

ARTICLE 20
----------

ARBITRATION

1. All matters in difference between the parties arising under, out of or in
connection with this Agreement, including formation and validity, and
whether arising during or after the period of this Agreement, shall be
referred to an arbitration tribunal in the manner hereinafter set out.

3. Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
either of them or either of the parties may apply to the appointor for the
appointment of the third arbitrator. The three arbitrators shall decide by
majority. If no majority can be reached the verdict of the third arbitrator
shall prevail. He shall also act as chairman of the tribunal.

4. Unless the parties otherwise agree the arbitration tribunal shall consist
of persons (including those who have retired) with not less than ten years'
experience of insurance or reinsurance as persons engaged in the industry
itself or as lawyers or other professional advisers.

- 11 -

6. The appointor shall be the Chairman for the time being of ARIAS (UK) or if
he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ARIAS (UK). If for any
reason such persons decline or are unable to act, then the appointor shall
be the Judge of the appropriate Courts having jurisdiction at the place of
arbitration.

8. The place of arbitration may be chosen by the parties, but in default of
such choice, the place of arbitration shall be Amsterdam.

9. The proper law of this Agreement shall be the law of the Netherlands.

10. The award of the arbitration tribunal shall be in writing and binding
upon the parties who consent to carry out the same.

ARTICLE 21
----------

PARTICIPATION
- -------------

This Agreement obligates the Reinsurers for their proportion of the interests
and liabilities set forth in this Agreement.

<PAGE>

- 12 -

IN WITNESS WHEREOF the parties hereto have, by their duly authorised
representative, executed this Agreement as follows:

Signed in Amsterdam, the Netherlands this 7th day of April 1994

For and on behalf of the Reassured: /s/ Jon Sharland

----------------------------------------
CNA INTERNATIONAL REINSURANCE CO. LTD.
----------------------------------------

And

Singed in Hamilton, Bermuda, this 26th day of September 1994.

For and on behalf of the Reinsurers. /s/ Guy Hengesbaugh
Guy Hengesbaugh
Chief Underwriter

LASALLE RE LIMITED

<PAGE>

Exhibit 10.23

LMX QUOTA SHARE RETROCESSIONAL
AGREEMENT AR 1846

RENEWAL PLACEMENT SLIP
----------------------

RETROCEDENT: Continental Casualty Company (20443)
Chicago, Illinois

EFFECTIVE: As respects original contracts written or renewed during the 12
month term beginning January 1, 1995.

Cessions in force to run off until natural expiry, plus an
additional 12 month period. In addition, run off provisions
hereunder will extend to cover all standard run off obligations
under each original cession in force at the time of cancellation.

In the event a Retrocessionaire opts not to continue its
participation on the Agreement replacing this Agreement, it will
remit to the Retrocedent 30 days after the close of the year 90%
of the positive balance of premium received, less losses paid,
and less ceding commission and other commissions paid. This
provision will not apply in the event that this contract is not
renewed.

BUSINESS
COVERED: All London Market Catastrophe Excess of Loss business, where 100%
of the layer is written by the Retrocedent and coded Product Type
6308.

EXCLUSIONS: As per original.

TERRITORY: Losses wheresoever arising

LIMIT: LAYER A
-------

33.33% Quota Share of $20,000,000 (or $6,666,000) of aggregate
cover any one occurrence. Subject to a maximum of up to
$5,000,000 in the aggregate or Sterling equivalent any one
occurrence, any one original reinsured.

LAYER B
-------

33.33% Quota Share of $17,500,000 (or $5,832,750) of aggregate
cover any one occurrence. Subject to a maximum of up to
$5,000,000 in the aggregate or Sterling equivalent any one
occurrence, any one original reinsured.

Page 1 of 6

<PAGE>

RATE: Original Gross Reinsurance Premium less any commissions paid
under reinsured original contracts and ceding commission.

CEDING
COMMISSION: 3.0% (FLAT)

WARRANTY: The Retrocedent and Retrocessionaires hereunder shall retain all
business subject to this Agreement net and unreinsured in any
way.

FUNDING OF
RESERVES: Letters of Credit (Citibank Scheme) as required by Retrocedent,
in respect of unearned premium and known outstanding losses
reported to Retrocessionaires, excluding losses incurred but not
reported to Retrocessionaires, in compliance with
statutory/regulatory requirements from non-admitted
Retrocessionaires only.

CASH
LOSSES: $250,000 (on a 100% basis).

REPORTS &
REMITTANCES: Both 30 days after the close of each quarter. Annual report 60
days after the expiration of the Agreement. (Per attached)

CURRENCY: All transactions hereunder to be in U.S. Dollars, losses in other
currencies to be converted to U.S. Dollars at the same rates of
exchange used by the Retrocedent in their own books.

WORDING: To be agreed.

GENERAL
CONDITIONS: All cessions hereunder will be at the same terms, conditions and
warranties as original and will follow original settlement made
by the Retrocedent.

Inter-Company Pooling Clause
Confidentiality Clause (per attached)
Salvage and Subrogation Clause
Settlements Clause (per attached)
Offset Clause
ECO Clause--N.M.X. 100

Page 2 of 6

<PAGE>

GENERAL
CONDITIONS:
(con't.) Errors and Omissions Clause
Amendments Clause
Access to Records Clause (per attached)
Interest Penalty Clause (per attached)
Insolvency Clause
Arbitration Clause
Taxes Clause
FET Clause
Service of Suit Clause
Aon Re Inc. Intermediary Clause

Please indicate your desired participation by signing and returning one (1) copy
of this Placement Slip to Aon Re Inc.

REINSURER: La Salle Re Limited
------------------------------------------------

THRU:
----------------------------------------------------

AUTHORIZED REFERENCE
PERCENTAGE: 47.50% NUMBER: TBA
----------------------------- -------------
(Layer A)

AUTHORIZED REFERENCE
PERCENTAGE: 31.43% NUMBER: TBA
----------------------------- -------------
(Layer B)

BY: /s/ Guy Hengesbaugh DATED: 4 January 1995
------------------------------------- ---------------

(For processing purposes it is important that you provide your Company's
reference number for this program.)

Page 3 of 6

<PAGE>

REPORTS AND REMITTANCES
-----------------------

Within 30 days after the close of each quarter, the Retrocedent shall furnish
the Retrocessionaires with a report summarizing the gross premium, commission
allowed on the gross premium, premium ceded less return premium and commission,
losses paid, loss expenses paid, salvage recovered, and net balance due either
party. The quarterly report also shall contain a statement showing the total
reserves for outstanding losses including loss expenses and a list of all
catastrophic code numbers assigned by the Property Claims Services division of
the American Insurance Services Group, Inc. for paid and outstanding catastrophe
losses and expenses incurred during the quarter. All amendments or adjustments,
including reinstatement premium, shall be accounted for on a year-of-account
basis. Amounts due the Retrocessionaires shall be remitted with said report.
Amounts due the Retrocedent shall be remitted within 30 days following receipt
of report.

Within 60 days following the expiration of the Agreement, the Retrocedent shall
furnish the Retrocessionaires with a report detailing the unearned premium,
calculated on a monthly pro rata basis, as well as the December 31st state of
each year's loss or losses. The Retrocedent shall also furnish the
Retrocessionaires with any additional information they may require to prepare
their financial statements.

Should payment due from the Retrocessionaires exceed their share of $250,000,
the Retrocedent may give the Retrocessionaires notice of payment made or its
intention to make payment on a certain date. If the Retrocedent has paid the
loss, payment shall be made by the Retrocessionaires immediately. If the
Retrocedent intends to pay the loss by a certain date and has submitted a proof
of loss or similar document, payment shall be due from the Retrocessionaires
24 hours prior to that date, provided the Retrocessionaires have a period of
five working days after receipt of said notice to dispatch the payment. Cash
loss amounts specifically remitted by the Retrocessionaires as set forth herein
shall be credited to their next quarterly account.

CONFIDENTIALITY
---------------

It is a condition precedent to any indemnification under this Agreement that the
Retrocedent shall not disclose any details of this Agreement at any time to any
third party without the approval of the Retrocessionaires. Notwithstanding the
foregoing, the Retrocedent may disclose details of this Agreement to Names and
their agents, auditors, accountants, and other third parties as may be required
in order to comply with law or with the bylaws of Lloyd's, provided that they
themselves respect the confidentiality of this undertaking.

Page 4 of 6

<PAGE>

SETTLEMENTS
-----------

The Retrocedent shall have the right to settle all claims under its original
contracts. All settlements, provided they are within the terms of this
Agreement, shall be unconditionally binding on the Retrocessionaires in
proportion to their participation in the Agreement, upon provision by the
Retrocedent of the following: identification of loss including date and
documented settlement/loss amounts and expenses received by the Retrocedent
subject to this Agreement.

ACCESS TO RECORDS
-----------------

Should the Retrocessionaire choose option b) of the foregoing paragraph, the
Retrocessionaire agrees to provide the Retrocedent a Trust Agreement established
at Morgan Guaranty Trust Company of New York, New York, or at a mutually agreed
successor Trustee, or a clean, irrevocable, and evergreen Letter of Credit,
issued by Morgan Guaranty Trust Company of New York, New York, or by a mutually
agreed bank, of which the Retrocedent shall be the beneficiary, which shall
secure in full all balances due from the Retrocessionaire to the Retrocedent
with respect to this Agreement. Such Trust Agreement and/or Letter of Credit
shall be established under the laws of the state of New York and shall meet all
requirements of the state regulatory authorities applicable to the Retrocedent.
The Retrocessionaire is responsible for all costs associated with providing such
Trust Agreement and/or Letters of Credit as required under this Article.

Page 5 of 6
<PAGE>

INTEREST PENALTY
----------------

The interest amounts provided for in this Article shall apply to the
Retrocessionaire or to the Retrocedent in the following circumstances:

A. Loss payment owed by the Retrocessionaire to the Retrocedent shall
have a due date to the Retrocedent of 90 calendar days following the
date of the billing/proof of loss.

B. Payment of any premium shall be due to the Retrocessionaires within 90
calendar days of the date specified in this Agreement. Any premium
adjustments shall be due by the debtor party within 150 calendar days
of the expiry of this Agreement.

C. Payment on return of premiums, commissions, profit sharing, or any
amounts not provided in paragraphs A. or B. above, shall have the due
date as specified in this Agreement. If no due date is specified, the
due date shall be 90 days following the date of billing.

D. Failure by the Retrocessionaire or the Retrocedent to comply with
their respective payment obligations within the time periods as herein
provided shall result in a compound interest penalty payable at a rate
equal to the 90-day Treasury Bill rate as published in the Money Rate
Section or any successor section of The Wall Street Journal on the
first business day following the date a remittance becomes due, plus
1% per annum, to be compounded and adjusted quarterly. Any interest
which occurs pursuant to this Article shall be calculated by the party
to which it is owed. The accumulation of the number of days that any
payment is past due shall stop on the date that the Intermediary,
where applicable, receives payment.

E. The validity of any claim or payment may be contested under the
provisions of this Agreement. If the debtor party prevails in an
arbitration or any other proceeding, there shall be no interest
penalty due. Otherwise, any interest shall be calculated and due as
outlined above.

F. If a Retrocessionaire advances payment of any claim it is contesting,
and prevails in the contest, the Retrocedent shall return such payment
plus pay interest on same, calculated as per the provisions of this
Article.

G. Any interest that occurs pursuant to this Article may be waived by the
party to which it is owed. Further, any interest which is calculated
pursuant to this Article that is $100 or less shall be waived. Waiver
of such interest, however, shall not affect the waiving party's rights
to similar interest for any other failure by the other party to make
payment when due under this Article.

H. Nothing in this Article shall diminish any legal remedies that either
party may have against the other.

Page 6 of 6

<PAGE>

ENDORSEMENT NO. 1
to
INTERESTS AND LIABILITIES AGREEMENT
attaching to and forming a part of
LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT

between

CONTINENTAL CASUALTY COMPANY
an ILLINOIS corporation
(hereinafter called the "Retrocedent")

and

LASALLE RE LIMITED
a BERMUDA corporation
(hereinafter called the "Subscribing Retrocessionaire")

It is hereby mutually understood and agreed by and between the Retrocedent
and the Retrocessionaire that Addendum No. 1 attaches to and forms a part of the
captioned Agreement.

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

Signed at CHICAGO, ILLINOIS

CONTINENTAL CASUALTY COMPANY

Signature: /s/ M. J. Laughlin Title: Director
---------------------- ----------------------------

Attest: /s/ Albert Moy Date: April 22, 1996
---------------------- ----------------------------

Signed at HAMILTON, BERMUDA

LASALLE RE LIMITED

Signature: /s/ M. C. Stockton Title: Vice President & Underwriter
---------------------- ----------------------------
Mark Stockton

Attest: /s/ Pat Dill Date: June 21st, 1996
---------------------- ----------------------------

<PAGE>

INTERESTS AND LIABILITIES AGREEMENT
attaching to and forming a part of
LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT

between

CONTINENTAL CASUALTY COMPANY
an ILLINOIS corporation
(hereinafter called the "Retrocedent")

and

LASALLE RE LIMITED
a BERMUDA corporation
(hereinafter called the "Subscribing Retrocessionaire")

If is hereby mutually understood and agreed by and between the Retrocedent
and the Subscribing Retrocessionaire that effective 12:01 a.m., Standard Time,
January 1, 1995 to 12:01 a.m., Standard Time, January 1, 1996, the Subscribing
Retrocessionaire's share in the interests and liabilities of the
Retrocessionaires on the attached Agreement will be 47.50%.

The share of the Subscribing Retrocessionaire will be separate and apart
from the shares of the other Retrocessionaires and will not be joint with those
of the other Retrocessionaires, and the Subscribing Retrocessionaire will in no
event participate in the interests and liabilities of the other
Retrocessionaires.

If the Subscribing Retrocessionaire wishes to designate an alternate party
to that named in the Service of Suit Article contained in the attached
Agreement, then service of process will be made upon the party hereinafter
named:

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

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

Signed at CHICAGO, ILLINOIS

CONTINENTAL CASUALTY COMPANY

Signature: /s/ M. J. Laughlin Title: Director
-------------------------------- ----------------------------

Attest: /s/ Albert Moy Date: April 22, 1996
------------------------------------ -----------------------------

1
<PAGE>

Signed at HAMILTON, BERMUDA

LASALLE RE LIMITED

Signature: /s/ M. C. Stockton Title: Vice President & Underwriter
------------------------------ -----------------------------
Mark Stockton

Attest: /s/ Pat Dill Date: June 21st, 1996
--------------------------------- ------------------------------

2
<PAGE>

ADDENDUM NO. 1
--------------

Attaching to and forming a part of

LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT

ISSUED TO: CONTINENTAL CASUALTY COMPANY
CHICAGO, ILLINOIS

ISSUED BY: VARIOUS RETROCESSIONAIRES IDENTIFIED BY
INTERESTS AND LIABILITIES AGREEMENTS

It is hereby mutually understood and agreed that as respects losses
occurring on original contracts written or renewed with an effective date during
the 12-month term commencing May 10, 1995 at 12:01 a.m. Standard Time, the
Inter-Company Pooling Arrangement Article of the captioned Agreement shall be
amended in its entirety to read as follows:

"INTER-COMPANY POOLING ARRANGEMENT
---------------------------------

"The Retrocedent has entered into reinsurance agreements whereby
it assumes 100% of the liability of other member companies of the CNA
Insurance Group. This Agreement protects such assumed liability and
attaches prior to redistribution, if any, within the Group. Such
redistribution shall be disregarded for all purposes of this
Agreement. For all purposes of this Agreement, "other member companies
of the CNA Insurance Group" are: National Fire Insurance Company of
Hartford, American Casualty Company of Reading Pennsylvania,
Transportation Insurance Company, Transcontinental Insurance Company,
Valley Forge Insurance Company, CNA Casualty of California, CNA
Lloyd's of Texas, and Columbia Casualty Company.

"The Retrocedent shall include the insurance companies of the
Continental Corporation which are affiliated with, controlled by or
under common management of CNA Insurance Group.

"Notice shall be given to the Retrocessionaires within 45 days of
the acquisition of a company not previously a member of the CNA
Insurance Group having in-force business that the Retrocedent wishes
to have covered by this Agreement. In the event either party hereto
maintains that the inclusion hereunder of some portion of the in force
business of any such new acquisition calls for alteration in the
existing terms of this Agreement, and the parties are unable to
negotiate terms that are mutually acceptable, then that portion of the
newly acquired in force business not considered mutually acceptable
shall be covered for an additional period of

<PAGE>

45 days from the date the dissenting party gives to the other written
notice that said portion of the newly acquired in force business is
unacceptable."

All other terms and conditions of the captioned Agreement shall remain
unchanged.

2
<PAGE>

LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT
----------------------------------------------------

ARTICLE PAGE
------- ----

COVERAGE I 2
TERM II 3
TERRITORY III 4
EXCLUSIONS IV 4
DEFINITIONS V 4
REINSURANCE PREMIUM AND CEDING COMMISSION VI 5
EXTRA CONTRACTUAL OBLIGATIONS VII 5
REPORTS AND REMITTANCES VIII 5
RESERVES AND LETTERS OF CREDIT IX 7
INTEREST PENALTY X 9
SETTLEMENTS XI 10
OFFSET XII 10
SALVAGE AND SUBROGATION XIII 11
WARRANTY XIV 11
DELAYS, ERRORS, OR OMISSIONS XV 11
AMENDMENTS XVI 12
ACCESS TO RECORDS XVII 12
CONFIDENTIALITY XVIII 13
INSOLVENCY XIX 13
ARBITRATION XX 15
TAXES XXI 16
FEDERAL EXCISE TAX XXII 16
CURRENCY XXIII 17
SERVICE OF SUIT XXIV 17
INTER-COMPANY POOLING ARRANGEMENT XV 18
INTERMEDIARY XXVI 19

1
<PAGE>

LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT
----------------------------------------------------

THIS AGREEMENT is made and entered into by and between CONTINENTAL CASUALTY
COMPANY, CHICAGO, ILLINOIS, (hereinafter called the "Retrocedent") of the one
part, and the various Retrocessionaires as identified by the attached Interests
and Liabilities Agreements (hereinafter called the "Retrocessionaires") of the
other part.

WITNESSETH:

That in consideration of the mutual covenants hereinafter contained and
upon the terms and conditions hereinbelow set forth, the parties hereto agree as
follows:

ARTICLE I
---------

COVERAGE
- --------

The Retrocedent shall cede to the Retrocessionaires, and the
Retrocessionaires shall accept, a 33.33% of $5,000,000 (i.e., $1,666,500) quota
share participation in respect to all original contracts written or renewed by
the Retrocedent with an effective date during the term of this Agreement and
classified by the Retrocedent as "London Market Catastrophe Excess of Loss
Reinsurance," where 100% of the layer is written by the Retrocedent and coded
Product Type 6308.

The limit of liability to the Retrocessionaires shall not exceed 33.33% of
$5,000,000 (i.e., $1,666,500) any one occurrence, any one original reinsured,
subject to an aggregate limitation of no more than 33.33% of $20,000,000 (i.e.,
$6,666,000) any one occurrence. Should any loss involve this reinsurance, the
obligation of the Retrocessionaires shall be automatically reinstated as to any
subsequent loss for the full amount of reinsurance as set forth above. The
Retrocedent shall retain a minimum of 66.67% of $5,000,000 (i.e., $3,333,500) of
all cessions to this Agreement net.

2
<PAGE>

All reinsurance for which the Retrocessionaires shall be obligated by
virtue of this Agreement shall be subject to the same terms, rates, conditions,
interpretations, waivers, modifications, and alterations as the respective
original contracts of the Retrocedent to which this reinsurance applies. Nothing
herein shall in any manner create any obligations or establish any rights
against the Retrocessionaires in favor of any third parties or any persons not
parties to this Agreement except as provided in the Insolvency Article. The
Retrocedent shall be the sole judge of what constitutes any one occurrence, any
one original insured.

ARTICLE II
----------

TERM
- ----

This Agreement shall apply to all losses occurring on original contracts
written or renewed with an effective date during the 12-month period commencing
January 1, 1995, 12:01 a.m. Standard Time. The Retrocessionaires shall remain
liable for all losses under original contracts in force until their expiration
or renewal dates, whichever come first, plus an additional 12 month period
should an original contract be renewed at an original reinsured's option. In
addition, the Retrocessionaires shall remain liable as respects any run-off
obligations under the original contracts covered hereunder.

In the event a Retrocessionaire opts not to continue its participation on
the agreement replacing this Agreement, the Retrocessionaire shall remit to the
Retrocedent 90% of the Retrocessionaire's share of the positive balance of
premium received, less losses paid, and less ceding and other commissions within
30 days after the termination of the Agreement. This provision shall not apply
in the event this Agreement is not renewed.

Notwithstanding the cancellation of this Agreement as hereinabove provided,
its provisions shall continue to apply to all unfinished business hereunder to
the end that all

3
<PAGE>

obligations and liabilities incurred by each party hereunder prior to such
termination shall be fully performed and discharged.

ARTICLE III
-----------

TERRITORY
- ---------

This Agreement shall apply to losses wheresoever arising.

ARTICLE IV
----------

EXCLUSIONS
- ----------

No indemnity shall be provided hereunder for any liability excluded under
the Retrocedent's original contracts.

ARTICLE V
---------

DEFINITIONS
- -----------

"Original contracts" as used in this Agreement shall mean reinsurance
treaties, binders, cover notes, slips, policies, contracts, or agreements,
whether written or oral.

"Occurrence" as used in this Agreement is defined as on the original
contracts covered hereunder.

"Loss" as used in this Agreement shall mean the amount of any settlement,
award, or judgment paid by the Retrocedent or for which the Retrocedent has
become liable to pay after deduction of all recoveries, salvages, subrogations,
and other reinsurances whether recovered or not. Loss shall not include loss
expense, unless the original contracts reinsured hereunder define loss as
including loss expense.

<PAGE>

remuneration of regular employees (other than staff field adjusters) of the
original reinsureds or the Retrocedent. The Retrocessionaires shall bear their
pro rata shares of all such loss expense (unless defined as part of loss in
reinsured original contracts) and shall benefit pro rata in all salvages,
subrogations, discounts and other recoveries.

ARTICLE VI
----------

REINSURANCE PREMIUM AND CEDING COMMISSION
- -----------------------------------------

The Retrocedent shall cede to the Retrocessionaires their proportionate
share of the original premium on all original contracts written or renewed with
an effective date on or after the inception of this Agreement for the business
described in the Coverage Article, less the ceding commission set forth below.

The Retrocessionaires shall allow the Retrocedent a 3% flat ceding
commission in addition to any commissions being paid under the original
contracts reinsured hereunder.

ARTICLE VII
-----------

EXTRA CONTRACTUAL OBLIGATIONS
- -----------------------------

This Agreement shall protect the Retrocedent, within the limits hereof, for
liability incurred in accordance with the provisions of the extra contractual
obligations clauses contained in the original contracts covered hereunder.

ARTICLE VIII
------------

REPORTS AND REMITTANCES
- -----------------------

5
<PAGE>

loss expenses and a list of all catastrophe code numbers assigned by the
Property Claim Services division of American Insurance Services Group, Inc. for
paid and outstanding catastrophe losses and loss expense incurred during the
quarter. All amendments or adjustments, including reinstatement premium, shall
be accounted for on a year-of-account basis. Amounts due the Retrocessionaires
shall be remitted with said report. Amounts due the Retrocedent shall be
remitted within 30 days following receipt of the report.

Within 60 days following the expiration of this Agreement, the Retrocedent
shall furnish the Retrocessionaires with a report detailing the unearned
premium, calculated on a monthly pro rata basis, as well as the December 31st
state of losses. The Retrocedent shall also furnish the Retrocessionaires with
any additional information they may require to prepare their financial
statements.

Should payment due from the Retrocessionaires exceed their share of
$250,000, the Retrocedent may give the Retrocessionaires notice of payment made
or its intention make payment on a certain date. If the Retrocedent has paid
the loss, payment shall be made by the Retrocessionaires immediately. If the
Retrocedent intends to pay the loss by a certain date and has submitted a proof
of loss or similar document, payment shall be due from the Retrocessionaires 24
hours prior to that date, provided the Retrocessionaires have a period of five
working days after receipt of said notice to dispatch the payment. Cash loss
amounts specifically remitted by the Retrocessionaires as set forth herein shall
be credited to their next quarterly account.

<PAGE>

ARTICLE IX
----------

RESERVES AND LETTERS OF CREDIT
- ------------------------------

(This Article is only applicable to those Retrocessionaires who cannot
qualify for credit by each governmental authority having jurisdiction over
the Retrocedent's reserves.)

As regards original contracts issued by the Retrocedent coming within the
scope of this Agreement, the Retrocedent agrees that, when it files with the
Insurance Department or sets up on its books reserves for known losses that have
been reported to the Retrocessionaires (including loss and loss expense paid by
the Retrocedent and loss and loss expense reported and outstanding) and/or
reserves for unearned premium, which it is required by law to set up, it shall
forward to the Retrocessionaires a statement showing the proportion of such loss
reserves applicable to them. The Retrocessionaires hereby agree that they shall
apply for and secure delivery to the Retrocedent of a clean, irrevocable, and
unconditional Letter of Credit, dated on or before December 31 of the year in
which the request is made, and issued by Citibank, N.A., and containing
provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Retrocedent's reserves, in an amount equal to the
Retrocessionaire's proportion of such reserves applicable to them as shown in
the statement prepared by the Retrocedent. Under no circumstances shall any
amount relating to reserves in respect of Incurred But Not Reported losses be
included in the amount of the Letter of Credit.
The Letter of Credit shall be issued for a period of not less than one
year, and shall be automatically extended for one year from its date of
expiration or any future expiration date unless 30 days prior to any expiration
date Citibank N.A. notifies the Retrocedent by registered mail that it elects
not to consider the Letter of Credit extended for any additional period.
Notwithstanding any other provisions of this Agreement, the Retrocedent or
its court-appointed successor in interest may draw upon such credit at any time
without

7
<PAGE>

diminution because of the insolvency of the Retrocedent or of any
Retrocessionaire for one or more of the following purposes only:

A. To reimburse the Retrocedent for the Retrocessionaire's share of
unearned premium on original contracts reinsured hereunder or account
of cancellations of such original contracts.

B. To pay the Retrocessionaires share or to reimburse the Retrocedent for
the Retrocessionaire's share of any loss reinsured by this Agreement,
which has not been otherwise paid.

C. To make refund of any sum in excess of the actual amount required to
pay the Retrocessionaire's share of any liability reinsured by this
Agreement.

D. In the event of non-extension of the Letter of Credit as provided for
above, to establish deposit of the Retrocessionaire's share for
unearned premium and/or losses, including reserves for incurred but
not reported losses under this Agreement. Such cash deposit shall be
held in an interest bearing account separate from the Retrocedent's
other assets, and interest thereon shall accrue to the benefit of the
Retrocessionaires.

Citibank, N.A. shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Retrocedent or the disposition of
funds withdrawn, except to ensure that withdrawals are made only upon the order
of properly authorized representatives of the Retrocedent.

At annual intervals, or more frequently as agreed but never more frequently
than semi-annually, the Retrocedent shall prepare, for the sole purpose of
amending the Letter of Credit, a specific statement of the Retrocessionaires'
share of reserves for losses and/or unearned premium. If the statement shows
that the Retrocessionaires' share of such reserves exceeds the balance of credit
as of the statement date, the Retrocessionaires shall, within 30 days after
receipt of notice of such excess, secure delivery to the Retrocedent of an
amendment of the Letter of Credit, increasing the amount of credit by the amount
of such difference. If, however, the statement shows that the Retrocessionaires'
share of such reserves is less than the balance of credit as of the statement
date, the Retrocedent

8
<PAGE>

shall, within 30 days after receipt of written request from the
Retrocessionaires, release such excess credit by agreeing to secure an amendment
to the Letter of Credit, reducing the amount of credit available by the amount
of such excess credit.

ARTICLE X
---------

INTEREST PENALTY
- ----------------

The interest amounts provided for in this Article will apply to the
Retrocessionaires or to the Retrocedent in the following circumstances:

A. Loss payments owed by the Retrocessionaires to the Retrocedent shall
have a due date to the Retrocedent of 90 calendar days following the
date of the billing/proof of loss.

B. Payment of any premium shall be due the Retrocessionaires within 90
calendar days of the date specified in this Agreement. Any premium
adjustments will be due by the debtor party within 150 calendar days
of the expiry of this Agreement.

D. Failure by a Retrocessionaire or the Retrocedent to comply with their
respective payment obligations within the time periods as herein
provided will result in a compound interest penalty payable at a rate
equal to the 90-day Treasury Bill rate as published in the Money Rate
Section or any successor section of The Wall Street Journal on the
first business day following the date a remittance becomes due, plus
1% per annum, to be compounded and adjusted quarterly. Any interest
which occurs pursuant to this Article shall be calculated by the party
to which it is owed. The accumulation of the number of days that any
payment is past due will stop on the date that the Intermediary, where
applicable, receives payment.

9
<PAGE>

H. Nothing in this Article shall diminish any legal remedies that either
party may have against the other.

ARTICLE XI
----------

SETTLEMENTS
- -----------

The Retrocedent shall have the right to settle all claims under its
original contracts. All settlements, provided they are within the terms of this
Agreement, shall be unconditionally binding on the Retrocessionaires in
proportion to their participation in the Agreement, upon provision by the
Retrocedent of the following: identification of loss including date and
documented settlement/loss amounts and expenses received by the Retrocedent
subject to this Agreement.

Inadvertent omission in dispatching the aforementioned documentation will
in no way affect the obligation of the Retrocessionaires under this Agreement,
provided the Retrocedent informs the Retrocessionaires of such omission promptly
upon discovery.

ARTICLE XII
-----------

OFFSET
- ------

The Retrocedent or any Retrocessionaire hereunder shall be entitled to
deduct from amounts due the other party under this Agreement any amounts due
itself from the other party under this Agreement; however, in the event of the
insolvency of any party hereto, offset shall be in accordance with applicable
law.

<PAGE>

ARTICLE XIII
------------

SALVAGE AND SUBROGATION
- -----------------------

The Retrocessionaires shall be credited with their share of salvage and/or
subrogation in respect of claims and settlements under this Agreement, less
their share of recovery expense. Unless the Retrocedent and the
Retrocessionaires agree to the contrary, the Retrocedent shall enforce its right
to salvage and/or subrogation and shall prosecute all claims arising out of such
right.

ARTICLE XIV
-----------

WARRANTY
- --------

It is hereby warranted that the Retrocedent and the Retrocessionaires
hereon shall retain all business subject to this Agreement net and unreinsured
in any way, subject to the limits expressed in the Coverage Article.

ARTICLE XV
----------

DELAYS, ERRORS, OR OMISSIONS
- ----------------------------

Inadvertent delays, errors, or omissions made in connection with this
Agreement shall not relieve either party from any liability which should have
attached to either party had such delay, error, omission not occurred, provided
always that such error or omission is rectified immediately upon discovery.

11
<PAGE>

ARTICLE XVI
-----------

AMENDMENTS
- ----------

This Agreement may be altered or amended in any of its terms and conditions
by mutual consent of the Retrocedent and the Retrocessionaires by addenda hereto
which will then constitute a part of this Agreement.

ARTICLE XVII
------------

ACCESS TO RECORDS
- -----------------

The Retrocessionaires, or their duly accredited representatives, shall have
access to the books and records of the Retrocedent on matters reasonably
relating to this reinsurance at all reasonable times for the purpose of
obtaining information concerning this Agreement or the subject matter hereof.
Except as provided in the following sentence, access to premium records is
restricted to within four years of the expiration of this Agreement. A
Retrocessionaire shall be permitted access to premium records subsequent to the
aforementioned period only on the condition that either: a) there are no
balances payable hereunder by the Retrocessionaire which are overdue as provided
in the Interest Penalty Article of this Agreement, or b) the Retrocessionaire
has funded all balances due hereunder in an interest-bearing trust fund or with
a Letter of Credit as hereinafter provided.
Should a Retrocessionaire choose option b) of the foregoing paragraph, the
Retrocessionaire agrees to provide the Retrocedent a Trust Agreement established
at Morgan Guaranty Trust Company of New York, New York, or at a mutually agreed
successor Trustee, or a clean, irrevocable, and evergreen Letter of Credit,
issued by Morgan Guaranty Trust Company of New York, New York, or by a mutually
agreed bank, of which the Retrocedent shall be the beneficiary, which shall
secure in full all balances due from the Retrocessionaire to the Retrocedent
with respect to this Agreement.

12
<PAGE>

Such Trust Agreement and/or Letter of Credit shall be established under the laws
of the state of New York and shall meet all requirements of the state regulatory
authorities applicable to the Retrocedent. The Retrocessionaire is responsible
for all costs associated with providing such Trust Agreement and/or Letters of
Credit as required under this Article.

ARTICLE XVIII
-------------

CONFIDENTIALITY
- ---------------

It is a condition precedent to any indemnification under this Agreement
that the Retrocedent shall not disclose any details of this Agreement at any
time to any third party without the approval of the Retrocessionaires.
Notwithstanding the foregoing, the Retrocedent may disclose details of this
Agreement to Names and their agents, auditors, accountants, and other third
parties as may be required in order to comply with law or with the bylaws of
Lloyd's, provided that they themselves respect the confidentiality of this
undertaking.

ARTICLE XIX
-----------

INSOLVENCY
- ----------

In the event of the Retrocedent's insolvency, the reinsurance afforded by
this Agreement shall be payable by the Retrocessionaires on the basis of the
Retrocedent's liability under the original contracts reinsured without
diminution because of the Retrocedent's insolvency or because its liquidator,
receiver, conservator, or statutory successor has failed to pay all or a portion
of any claims, subject however to the right of the Retrocessionaires to offset
against such funds due hereunder, any sums that may be payable to them by said
insolvent Retrocedent in accordance with the Offset Article. The reinsurance
shall be payable by the Retrocessionaires directly to the Retrocedent, its

13
<PAGE>

liquidator, receiver, conservator, or statutory successor except (a) where this
Agreement specifically provides another payee of such reinsurance in the event
of the Retrocedent's insolvency or (b) where the Retrocessionaires, with the
consent of the direct insured or insureds, have assumed such policy obligations
of the Retrocedent as direct obligations of themselves to the payees under such
policies in substitution for the Retrocedent's obligation to such payees.

The Retrocedent's liquidator, receiver, conservator, or statutory successor
shall give written notice of the pendency of a claim against the Retrocedent
under the original contracts within a reasonable time after such claim is filed
in the insolvency proceeding. During the pendency of such claim, the
Retrocessionaires may investigate said claim and interpose in the proceeding
where the claim is to be adjudicated, at their own expense, any defense that
they may deem available to the Retrocedent, its liquidator, receiver,
conservator, or statutory successor. The expense thus incurred by the
Retrocessionaires shall be chargeable against the Retrocedent, subject to court
approval, as part of the expense of conservation or liquidation to the extent
that such proportionate share of the benefit shall accrue to the Retrocedent
solely as a result of the defense undertaken by the Retrocessionaires. Where
two or more Retrocessionaires are involved in the same claim, and a majority in
interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the Retrocedent.

In the event of insolvency of the Retrocedent, the Retrocessionaires under
this Agreement shall have all rights, as more fully set forth in Section 173 of
Illinois Insurance Code, as amended.

<PAGE>

Exhibit 10.24

LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL
AGREEMENT AR 1846-96

RENEWAL PLACEMENT SLIP
----------------------

COMPANY: Continental Casualty Company
Illinois

EFFECTIVE: Losses occurring on original contracts written or renewed with
effective dates during the 12 month term beginning January 1,
1996.

Cessions in force to run off until natural expiry, plus an
additional 12 month period should an original contract be renewed
at original reinsured's option. In addition, Retrocessionaires
will remain liable as respects run-off obligations under each
original cession in force at the time of expiration.

In the event a Retrocessionaire opts not to continue its
participation on the agreement replacing this Agreement, it will
remit to the Retrocedent 90% of the Retrocessionaire's share of
the positive balance of premium received, less losses paid, and
less ceding commission and other commissions paid within 30 days
after Agreement expiration. This provision will not apply in the
event that this Agreement is not renewed.

BUSINESS
COVERED: London Market Catastrophe Excess of Loss business, where 100% of
the layer is written by the Retrocedent and coded Product Type
6308.

EXCLUSIONS: As per original contracts.

TERRITORY: Losses wheresoever arising

LIMIT: Layer A
-------

33.33% Quota Share of $20,000,000 (or $6,666,000) of aggregate
cover any one occurrence. Subject to a maximum of up to 33.33% of
$5,000,000 (or $1,666,500) any one occurrence, any one original
reinsured. Minimum net retention of 66.67% of $5,000,000 (or
$3,333,500) of all cessions to Agreement.

Page 1 of 7
<PAGE>

LIMIT:
(con't.) Layer B
-------

33.33% Quota Share of $17,500,000 (or $5,832,750) of aggregate
cover any one occurrence. Subject to a maximum of up to 33.33% of
$5,000,000 (or $1,666,500) any one occurrence, any one original
reinsured. Minimum net retention of 66.67% of $5,000,000 (or
$3,333,500) of all cessions to Agreement.

RATE: Original Gross Reinsurance Premium less any commissions paid
under reinsured original contracts and ceding commission.

CEDING
COMMISSION: 3.0% (FLAT)

WARRANTY: The Retrocedent and Retrocessionaires hereunder will retain all
business subject to this Agreement net and unreinsured in any
way, subject to limits in Limit Section.

FUNDING OF
RESERVES: Letters of Credit (Citibank Scheme) as required by Retrocedent,
in respect of unearned premium and known outstanding losses
reported to Retrocessionaires, excluding losses incurring but not
reported to Retrocessionaires, in compliance with
statutory/regulatory requirements from non-admitted
Retrocessionaires only.

CASH
LOSSES: $250,000 (on a 100% basis).

REPORTS &
REMITTANCES: As attached.

CURRENCY: All transactions hereunder to be in U.S. Dollars. Losses in other
currencies to be converted to U.S. Dollars at the same rates of
exchange used by the Retrocedent in its own books.

WORDING: As expiring.

Page 2 of 7
<PAGE>

GENERAL
CONDITIONS: Retrocessionaires will be subject to the same terms, rates, and
conditions as original and will follow original settlements made
by the Retrocedent.

Arbitration Clause
Inter-Company Pooling Clause
Confidentiality Clause (per attached)
Salvage and Subrogation Clause
Settlements Clause (per attached)
Offset Clause (this Agreement only, except that in
the event of insolvency, offset will be allowed
per applicable regulation)
ECO Clause
Delays, Errors, or Omissions Clause
Amendments Clause
Access to Records Clause (per attached)
Interest Penalty Clause (per attached)
Insolvency Clause
Arbitration Clause
Taxes Clause
Federal Excise Tax Clause
Service of Suit Clause
Aon Re Inc. Intermediary Clause

Page 3 of 7
<PAGE>

Please indicate your desired participation by signing and returning one copy of
this Placement Slip to Aon Re Inc.

REINSURER: LaSalle Re Limited
----------------------------------------------------------------------

THRU:
---------------------------------------------------------------------------

SIGNED REFERENCE
LINE: 47.5% NUMBER: 1739/96
------------------------------------------------ ------------------
(Layer A)

SIGNED REFERENCE
LINE: 31.43% NUMBER: 1739/96
------------------------------------------------ ------------------
(Layer B)

ACCEPTED &
APPROVED BY: /s/ Graham Waite DATED: 2nd February, 1996
----------------------------------------- ------------------
Graham A. Waite - Vice President

(For processing purposes it is important that you provide your Company's
reference number for this program.)

Page 4 of 7

<PAGE>

REPORTS AND REMITTANCES
-----------------------

Within 60 days following the expiration of the Agreement, the Retrocedent shall
furnish the Retrocessionaires with a report detailing the unearned premium,
calculated on a monthly pro rata basis, as well as the December 31st state of
losses. The Retrocedent shall also furnish the Retrocessionaires with any
additional information they may require to prepare their financial statements.

Should payment due from the Retrocessionaires exceed their share of $250,000,
the Retrocedent may give the Retrocessionaires notice of payment made or its
intention to make payment on a certain date. If the Retrocedent has paid the
loss, payment shall be made by the Retrocessionaires immediately. If the
Retrocedent intends to pay the loss by a certain date and has submitted a proof
of loss or similar document, payment shall be due from the Retrocessionaires 24
hours prior to that date, provided the Retrocessionaires have a period of five
working days after receipt of said notice to dispatch the payment. Cash loss
amounts specifically remitted by the Retrocessionaires as set forth herein shall
be credited to their next quarterly account.

CONFIDENTIALITY
---------------

Page 5 of 7

<PAGE>

SETTLEMENTS
-----------

ACCESS TO RECORDS
-----------------

Page 6 of 7

<PAGE>

INTEREST PENALTY
----------------

The interest amounts provided for in this Article will apply to the
Retrocessionaires or to the Retrocedent in the following circumstances:

A. Loss payment owed by the Retrocessionaires to the Retrocedent shall
have a due date to the Retrocedent of 90 calendar days following the
date of the billing/proof of loss.

C. Payment on return of premiums, commissions profit sharing, or any
amounts not provided in paragraphs A. or B. above, shall have the due
date as specified in this Agreement. If no due date is specified, the
due date shall be 90 days following the date of billing.

D. Failure by the Retrocessionaire or the Retrocedent to comply with
their respective payment obligations within the time periods as herein
provided will result in a compound interest penalty payable at a rate
equal to the 90-day Treasury Bill rate as published in the Money Rate
Section or any successor section of The Wall Street Journal on the
first business day following the date a remittance becomes due, plus
1% per annum, to be compounded and adjusted quarterly. Any interest
which occurs pursuant to this Article shall be calculated by the party
to which it is owed. The accumulation of the number of days that any
payment is past due will stop on the date that the Intermediary, where
applicable, receives payment.

H. Nothing in this Article shall diminish any legal remedies that either
party may have against the other.

Page 7 of 7

<PAGE>

LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT
----------------------------------------------------

ARTICLE PAGE
------- ----

COVERAGE I 2
TERM II 3
TERITORY III 4
EXCLUSIONS IV 4
DEFINITIONS V 4
REINSURANCE PREMIUM AND CEDING COMMISSION VI 5
EXTRA CONTRACTUAL OBLIGATIONS VII 6
REPORTS AND REMITTANCES VIII 6
RESERVES AND LETTERS OF CREDIT IX 7
INTEREST PENALTY X 10
SETTLEMENTS XI 11
OFFSET XII 11
SALVAGE AND SUBROGATION XIII 12
WARRANTY XIV 12
DELAYS, ERRORS, OR OMISSIONS XV 12
AMENDMENTS XVI 13
ACCESS TO RECORDS XVII 13
CONFIDENTIALITY XVIII 14
INSOLVENCY XIX 14
ARBITRATION XX 16
TAXES XXI 18
FEDERAL EXCISE TAX XXII 18
CURRENCY XXIII 18
SERVICE OF SUIT XXIV 19
INTER-COMPANY POOLING ARRANGEMENT XXV 20
INTERMEDIARY XXVI 21

<PAGE>

LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT
----------------------------------------------------

THIS AGREEMENT is made and entered into by and between CONTINENTAL CASUALTY
COMPANY, an Illinois corporation, (hereinafter called the "Retrocedent") of the
one part, and the various Retrocessionaires as identified by the attached
Interests and Liabilities Agreements (hereinafter called the
"Retrocessionaires") of the other part.

WITNESSETH:

That in consideration of the mutual covenants hereinafter contained and
upon the terms and conditions hereinbelow set forth, the parties hereto agree as
follows:

ARTICLE I
---------

COVERAGE
- --------

<PAGE>

amount of reinsurance as set forth above. The Retrocedent shall retain a minimum
of 66.67% of $5,000,000 (i.e., $3,333,500) of all cessions to this Agreement
net.

ARTICLE II
----------

TERM
- ----

This Agreement shall apply to all losses occurring on original contracts
written or renewed with an effective date during the 12-month period commencing
January 1, 1996, 12:01 a.m. Standard Time. The Retrocessionaires shall remain
liable for all losses under original contracts in force until their expiration
or renewal dates, whichever come first, plus an additional 12 month period
should an original contract be renewed at an original reinsured's option. In
addition, the Retrocessionaires shall remain liable as respects any run-off
obligations under the original contracts covered hereunder.

<PAGE>

losses paid, and less ceding and other commissions within 30 days after the
termination of the Agreement. This provision shall not apply in the event this
Agreement is not renewed.

Notwithstanding the cancellation of this Agreement as hereinabove provided,
its provisions shall continue to apply to all unfinished business hereunder to
the end that all obligations and liabilities incurred by each party hereunder
prior to such termination shall be fully performed and discharged.

ARTICLE III
-----------

TERRITORY
- ---------

This Agreement shall apply to losses wheresoever arising.

ARTICLE IV
----------

EXCLUSIONS
- ----------

No indemnity shall be provided hereunder for any liability excluded under
the Retrocedent's original contracts.

ARTICLE V
---------

DEFINITIONS
- -----------

"Original contracts" as used in this Agreement shall mean reinsurance
treaties, binders, cover notes, slips, policies, contracts, or agreements,
whether written or oral.

"Occurrence" as used in this Agreement is defined as on the original
contracts covered hereunder.

4
<PAGE>

"Loss expense" as used in this Agreement shall mean all expenses incurred
by the Retrocedent in the investigation, appraisal, adjustment, litigation
and/or defense of claims under original contracts reinsured hereunder, including
court costs and interest accrued before and after final judgment, but excluding
internal office expenses, salaries, and other remuneration of regular employees
(other than staff field adjusters) of the original reinsureds or the
Retrocedent. The Retrocessionaires shall bear their pro rata shares of all such
loss expense (unless defined as part of loss in reinsured original contracts)
and shall benefit pro rata in all salvages, subrogations, discounts, and other
recoveries.

ARTICLE VI
----------

REINSURANCE PREMIUM AND CEDING COMMISSION
- -----------------------------------------

The Retrocessionaires shall allow the Retrocedent a 3% flat ceding
commission in addition to any commissions being paid under the original
contracts reinsured hereunder.

5
<PAGE>

ARTICLE VII
-----------

EXTRA CONTRACTUAL OBLIGATIONS
- -----------------------------

ARTICLE VIII
------------

REPORTS AND REMITTANCES
- -----------------------

Within 30 days after the close of each quarter, the Retrocedent shall
furnish the Retrocessionaires with a report summarizing the gross premium,
commission allowed on the gross premium, premium ceded less return premium and
commission, losses paid, loss expenses paid, salvage recovered, and net balance
due either party. The quarterly report also shall contain a statement showing
the total reserves for outstanding losses including loss expenses and a list of
all catastrophe code numbers assigned by the Property Claim Services division of
American Insurance Services Group, Inc. for paid and outstanding catastrophe
losses and loss expense incurred during the quarter. All amendments or
adjustments, including reinstatement premium, shall be accounted for on a
year-of-account basis. Amounts due the Retrocessionaires shall be remitted with
said report. Amounts due the Retrocedent shall be remitted within 30 days
following receipt of the report.

6
<PAGE>

shall also furnish the Retrocessionaires with any additional information they
may require to prepare their financial statements.

Should payment due from the Retrocessionaires exceed their share of
$250,000, the Retrocedent may give the Retrocessionaires notice of payment made
or its intention to make payment on a certain date. If the Retrocedent has paid
the loss, payment shall be made by the Retrocessionaires immediately. If the
Retrocedent intends to pay the loss by a certain date and has submitted a proof
of loss or similar document, payment shall be due from the Retrocessionaires 24
hours prior to that date, provided the Retrocessionaires have a period of five
working days after receipt of said notice to dispatch the payment. Cash loss
amounts specifically remitted by the Retrocessionaires as set forth herein shall
be credited to their next quarterly account.

ARTICLE IX
----------

RESERVES AND LETTERS OF CREDIT
- ------------------------------

(This Article is only applicable to those Retrocessionaires who cannot
qualify for credit by each governmental authority having jurisdiction over
the Retrocedent's reserves.)

7
<PAGE>

agree that they shall apply for and secure delivery to the Retrocedent of a
clean, irrevocable, and unconditional Letter of Credit, dated on or before
December 31 of the year in which the request is made, and issued by Citibank,
N.A., and containing provisions acceptable to the insurance regulatory
authorities having jurisdiction over the Retrocedent's reserves, in an amount
equal to the Retrocessionaire's proportion of such reserves applicable to them
as shown in the statement prepared by the Retrocedent. Under no circumstances
shall any amount relating to reserves in respect of Incurred But Not Reported
losses be included in the amount of the Letter of Credit.

The Letter of Credit shall be issued for a period of not less than one
year, and shall be automatically extended for one year from its date of
expiration or any future expiration date unless 30 days prior to any expiration
date Citibank N.A. notifies the Retrocedent by registered mail that it elects
not to consider the Letter of Credit extended for any additional period.

Notwithstanding any other provisions of this Agreement, the Retrocedent or
its court-appointed successor in interest may draw upon such credit at any time
without diminution because of the insolvency of the Retrocedent or of any
Retrocessionaire for one or more of the following purposes only:

A. To reimburse the Retrocedent for the Retrocessionaire's share of
unearned premium on original contracts reinsured hereunder or account
of cancellations of such original contracts.

B. To pay the Retrocessionaires share or to reimburse the Retrocedent for
the Retrocessionaire's share of any loss reinsured by this Agreement,
which has not been otherwise paid.

C. To make refund of any sum in excess of the actual amount required to
pay the Retrocessionaire's share of any liability reinsured by this
Agreement

8
<PAGE>

Citibank, N.A. shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Retrocedent or the disposition of funds
withdrawn, except to ensure that withdrawals are made only upon the order of
properly authorized representatives of the Retrocedent.

<PAGE>

ARTICLE X
---------

INTEREST PENALTY
- ----------------

The interest amounts provided for in this Article will apply to the
Retrocessionaires or to the Retrocedent in the following circumstances:

A. Loss payments owed by the Retrocessionaires to the Retrocedent shall
have a due date to the Retrocedent of 90 calendar days following the
date of the billing/proof of loss.

<PAGE>

interest for any other failure by the other party to make payment when
due under this Article.

H. Nothing in this Article shall diminish any legal remedies that either
party may have against the other.

ARTICLE XI
----------

SETTLEMENTS
- -----------

The Retrocedent shall have the right to settle all claims under its
original contracts. All settlements, provided they are within the terms of this
Agreement, shall be unconditionally binding on the Retrocessionaires in
proportion to their participation in the Agreement, upon provision by the
Retrocedent of the following: identification of loss including date and
documented settlement/loss amounts and expenses received by the Retrocedent
subject to this Agreement.

Inadvertent omission in dispatching the aforementioned documentation will
in no way affect the obligation of the Retrocessionaires under the Agreement,
provided the Retrocedent informs the Retrocessionaires of such omission promptly
upon discovery.

ARTICLE XII
-----------

OFFSET
- ------

11
<PAGE>

ARTICLE XIII
------------

SALVAGE AND SUBROGATION
- -----------------------

The Retrocessionaires shall be credited with their share of salvage and/or
subrogation in respect of claims and settlements under this Agreement, less
their share of recovery expense. Unless the retrocedent and the
Retrocessionaires agree to the contrary, the Retrocedent shall enforce its right
to salvage and/or subrogation and shall prosecute all claims arising out of such
right.

ARTICLE XIV
-----------

WARRANTY
- --------

ARTICLE XV
----------

DELAYS, ERRORS, OR OMISSIONS
- ----------------------------

12
<PAGE>

ARTICLE XVI
-----------

AMENDMENTS
- ----------

ARTICLE XVII
------------

ACCESS TO RECORDS
- -----------------

Should a Retrocessionaire choose option b) of the foregoing paragraph, the
Retrocessionaire agrees to provide the Retrocedent a Trust Agreement established
at Morgan Guaranty Trust Company of New York, New York or at a mutually agreed
successor Trustee, or a clean, irrevocable, and evergreen Letter of Credit,
issued by

<PAGE>

Morgan Guaranty Trust Company of New York, New York, or by a mutually agreed
bank, of which the Retrocedent shall be the beneficiary, which shall secure in
full all balances due from the Retrocessionaire to the Retrocedent with respect
to this Agreement. Such Trust Agreement and/or Letter of Credit shall be
established under the laws of the state of New York and shall meet all
requirements of the state regulatory authorities applicable to the Retrocedent.
The Retrocessionaire is responsible for all costs associated with providing such
Trust Agreement and/or Letters of Credit as required under this Article.

ARTICLE XVIII
-------------

CONFIDENTIALITY
- ---------------

It is a condition precedent to any indemnification under this Agreement
that the Retrocedent shall not disclose any details of this Agreement at any
time to any third party without the approval of the Retrocessionaires.
Notwithstanding the foregoing, the Retrocedent may disclose details of this
Agreement to Names and their agents, auditors, accountants, and other third
parties as may be required in order to comply with law or with the bylaws of
Lloyd's, provided that they themselves respect the confidentiality of this
undertaking.

ARTICLE XIX
-----------

INSOLVENCY
- ----------

In the event of the Retrocedent's insolvency, the reinsurance afforded by
this Agreement shall be payable by the Retrocessionaires on the basis of the
Retrocedent's

14
<PAGE>

liability under the original contracts reinsured without diminution because of
the Retrocedent's insolvency or because its liquidator, receiver, conservator,
or statutory successor has failed to pay all or a portion of any claims, subject
however to the right of the Retrocessionaires to offset against such funds due
hereunder, any sums that may be payable to them by said insolvent Retrocedent in
accordance with the Offset Article. The reinsurance shall be payable by the
Retrocessionaires directly to the Retrocedent, its liquidator, receiver,
conservator, or statutory successor except (a) where this Agreement specifically
provides another payee of such reinsurance in the event of the Retrocedent's
insolvency or (b) where the Retrocessionaires, with the consent of the direct
insured or insureds, have assumed such policy obligations of Retrocedent as
direct obligations of themselves to the payees under such policies in
substitution for the Retrocedent's obligation to such payees.

The Retrocedent's liquidator, receiver, conservator, or statutory successor
shall give written notice of the pendency of a claim against the Retrocedent
under the original contracts within a reasonable time after such claim is filed
in the insolvency proceeding. During the pendency of such claim, the
Retrocessionaires may investigate said claim and interpose in the proceeding
where the claim is to be adjudicated, at their own expense, any defense that
they may deem available to the Retrocedent, its liquidator, receiver,
conservator, or statutory successor. The expense thus incurred by the
Retrocessionaires shall be chargeable against the Retrocedent, subject to court
approval, as part of the expense of conservation or liquidation to the extent
that such proportionate share of the benefit shall accrue to the Retrocedent
solely as a result of the defense undertaken by the Retrocessionaires. Where two
or more Retrocessionaires are involved in the same claim,

15
<PAGE>

and a majority in interest elect to interpose defense to such claim, the expense
shall be apportioned in accordance with the terms of this Agreement as though
such expense had been incurred by the Retrocedent.

In the event of insolvency of the Retrocedent, the Retrocessionaires under
this Agreement shall have all rights, as more fully set forth in Section 173 of
Illinois Insurance Code, as amended.

ARTICLE XX
----------

ARBITRATION
- -----------

In the event of any arbitration between the Retrocedent and its reinsureds
under the terms of any original contract, the Retrocessionaires agree
unreservedly to abide by the result of such arbitration.

As a condition precedent to any right of action hereunder, any dispute
arising out of this Agreement, whether arising before or after termination,
shall be submitted to the decision of a board of arbitration composed of two
arbitrators and an umpire, meeting in Chicago, Illinois unless otherwise
agreed.

The members of the board of arbitration shall be active or retired,
disinterested officials of insurance or reinsurance companies or Underwriters at
Lloyd's, London. Each party shall appoint its arbitrator, and the two
arbitrators shall choose an umpire before instituting the hearing. If the
respondent fails to appoint its arbitrator within four weeks after being
requested to do so by the claimant, the claimant shall also appoint the second
arbitrator. If the two arbitrators fail to agree upon the appointment of an
umpire within four weeks after their nominations, they shall request the
American Arbitration

16
<PAGE>

Association to appoint an umpire. Both parties shall be promptly notified, in
writing, of the appointment of the umpire.

The claimant shall submit its initial brief within 20 days from the
appointment of the umpire. The respondent shall submit its brief within 20 days
thereafter, and the claimant may submit a reply brief within 10 days after
filing of the respondent's brief.

The board shall make its decision with due regard to the custom and usage
of the insurance and reinsurance business. The board shall issue its decision in
writing based upon a hearing in which evidence may be introduced without
following strict rules of evidence but in which cross-examination and rebuttal
shall be allowed. The board shall make its decision within 60 days following the
termination of the hearings unless the parties consent to an extension. The
majority decision of the board shall be final and binding upon all parties to
the proceeding. Judgment may be entered upon the award of the board in any court
having jurisdiction thereof.

If more than one Retrocessionaire is involved in the same dispute, all such
Retrocessionaires shall constitute and act as one party for purposes of this
Article, and communications shall be made by the Retrocedent to each of the
Retrocessionaires constituting the one party, provided that nothing therein
shall impair the rights of the Retrocessionaires to assert several, rather than
joint, defenses or claims, nor be construed as changing the liability of the
Retrocessionaires under the terms of this Agreement from several to joint.

Each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the expense of the umpire. The remaining
costs of the arbitration proceedings shall be allocated by the board.

17
<PAGE>

ARTICLE XXI
-----------

TAXES
- -----

The Retrocedent shall pay all taxes (except for Federal Excise Tax) on
premiums reported to the Retrocessionaires on this Agreement.

ARTICLE XXII
------------

FEDERAL EXCISE TAX
- ------------------

(This Article applies to Retrocessionaires domiciled outside the United
States of America, excepting Lloyd's London Underwriters and other
Retrocessionaires exempt from Federal Excise Tax).

The Retrocessionaires shall allow for the purpose of paying the Federal
Excise Tax the applicable percentage of the premium payable hereon (as imposed
under Section 4371 of the Internal Revenue Service Code) to the extent such
premium is subject to such tax. In the event of any return of premium, the
Retrocessionaires shall deduct the applicable percentage of the return premium
payable hereon and the Retrocedent or its agent shall recover such tax from the
United States Government.

ARTICLE XXIII
-------------

CURRENCY
- --------

The sign "$" in this Agreement refers to United States of America Dollars
and all payments hereunder shall be made in that currency. All amounts paid or
received by the Retrocedent in any other currency shall be converted into United
States of America Dollars at the rate of exchange on the Retrocedent's books
when such payment is made or received.

18
<PAGE>

ARTICLE XXIV
------------

SERVICE OF SUIT
- ---------------

(This Article applies to Retrocessionaires domiciled outside the United
States of America and/or unauthorized in any state, territory, or district
of the United States of America that has jurisdiction over the Retrocedent
and in which a subject suit has been instituted. This Article is not
intended to conflict with or override the parties' obligation to arbitrate
their disputes in accordance with the Arbitration Article.)

In the event any Retrocessionaire hereon fails to pay any amount or perform
any obligation claimed due hereunder, such Retrocessionaire, at the request of
the Retrocedent, shall submit to the jurisdiction of any court of competent
jurisdiction within the United States and shall comply with all requirements
necessary to give that court jurisdiction. Nothing in this Article constitutes
or should be understood to constitute a waiver of the Retrocessionaire's right
to commence an action in any court of competent jurisdiction in the United
States, to remove an action to a United States District Court, or to seek a
transfer of a case to another court as permitted by the laws of the United
States or of any state in the United States. Service of process in such suit
may be made upon Mendes and Mount, 750 Seventh Avenue, New York, New York
10019-6829, or another party specifically designated in the applicable Interests
and Liabilities Agreement attached hereto. In any suit instituted against it
upon this Agreement, the Retrocessionaire shall abide by the final decision of
such court or of any appellate court in the event of an appeal.

The above named are authorized and directed to accept service of process on
behalf of the Retrocessionaire in any such suit and/or upon request of the
Retrocedent to give a written undertaking to the Retrocedent that they shall
enter a general appearance on the Retrocessionaire's behalf in the event such a
suit is instituted.

19
<PAGE>

Further, pursuant to any statute of any state, territory, or district of
the United States that makes provisions therefor, the Retrocessionaire hereby
designates the Superintendent, Commissioner, or Director of Insurance or other
officer specified for that purpose in the statute (or his successor or
successors in office) as its true and lawful attorney upon whom may be served
any lawful process in any action, suit, or proceeding instituted by or on behalf
of the Retrocedent or any beneficiary hereunder arising out of this Agreement,
and hereby designates above named as the person to whom said officer is
authorized to mail such process or a true copy thereof.

ARTICLE XXV
-----------

INTER-COMPANY POOLING ARRANGEMENT
- ---------------------------------

It is understood and agreed that the Retrocedent has entered into the CNA
Reinsurance Pooling Agreement whereby it assumes 100% of the liability of the
other participants in the CNA Reinsurance Pooling Agreement. This present
Agreement protects such assumed liability and attaches prior to redistribution,
if any, within the participating companies. Such redistribution shall be
disregarded for all purposes of this present Agreement. For all purposes of
this Agreement, other member companies of the CNA Reinsurance Pooling Agreement
are: National Fire Insurance Company of Hartford, American Casualty Company of
Reading Pennsylvania, Transportation Insurance Company, Transcontinental
Insurance Company, Valley Forge Insurance Company, CNA Casualty of California,
CNA Lloyd's of Texas and Columbia Casualty Company.

20
<PAGE>

It is also understood and agreed that the Retrocedent shall include the
insurance companies of the Continental Corporation which are affiliated with,
controlled by or under the common management of CNA.

It is further agreed that notice shall be given to the Retrocessionaires
within 45 days of the acquisition of a company, not previously a participant in
either of the above-referenced, having in-force business that the Retrocedent
wishes to have covered by this Agreement. In the event either party hereto
maintains that the inclusion hereunder of some portion of the in force business
of any such new acquisition calls for alteration in the existing terms of this
Agreement, and the parties are unable to negotiate terms that are mutually
acceptable, then that portion of the newly acquired in force business not
considered mutually acceptable shall be covered for an additional period of 45
days from the date of the dissenting party gives to the other written notice
that said portion of the newly acquired in force business is unacceptable.

ARTICLE XXVI
------------

INTERMEDIARY
- ------------

Aon Re Inc. is hereby recognized as the Intermediary negotiating this
Agreement for all business hereunder. All communications (including but not
limited to notices, statements, premiums, return premiums, commissions, taxes,
losses, loss adjustment expense, salvages, and loss settlements) relating
thereto shall be transmitted to the Retrocedent or the Retrocessionaires through
Aon Re Inc., 123 N. Wacker Drive, Chicago, Illinois 60606. Payments by the
Retrocedent to the Intermediary shall be deemed payment to the
Retrocessionaires. Payments by the Retrocessionaires to the Intermediary

21
<PAGE>

shall be deemed payment to the Retrocedent only to the extent that such payments
are actually received by the Retrocedent.

<PAGE>

Exhibit 23.4

Consent of Independent Chartered Accountants

The Board of Directors
LaSalle Re Holdings Limited

The audits referred to in our report dated October 19, 1996 included the related
consolidated financial statement schedules of LaSalle Re Holdings Limited as at
September 30, 1996 and 1995 and for the years ended September 30, 1996 and 1995
and for the period from October 26, 1993 (the date of incorporation) to
September 30, 1994 included in the registration statement. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based on our audits. In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as
whole, present fairly in all material respects the information set forth
therein.

We consent to the use of our report included herein and to the reference to our
firm under the heading "Experts" in the prospectus.

KPMG Peat Marwick

Hamilton, Bermuda Chartered Accountants
November 1, 1996