LASALLE RE HOLDINGS LTD, S-3/A, 1998-12-21

LASALLE RE HOLDINGS LTD
S-3/A, 1998-12-21
FIRE, MARINE & CASUALTY INSURANCE

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As filed with the Securities and Exchange Commission on December 21, 1998
Registration No. 333-64543

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933

LASALLE RE HOLDINGS LIMITED
(Exact name of registrant as specified in its charter)

Bermuda Not Applicable
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

25 Church Street CT Corporation System
Hamilton HM FX, Bermuda 1633 Broadway
(441) 292-3339 New York, New York 10019
(Address, including zip code, (212) 664-1666
and telephone number, including (Name, address, including zip
area code, of Registrant's code, and telephone number,
principal executive offices) including area code,
of agent for service)

Copies to:

Richard W. Shepro
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
(312) 782-0600

Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]

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, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box: |X|

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) 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 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
==================================================================================================================
Proposed maximum Proposed maximum Amount of
Title of securities Amount offering price aggregate registration
to be registered to be registered per share offering price fee
<S> <C> <C> <C> <C>
Common Shares,
par value $1.00 per share.... 3,756,886 $26.9375(1) $101,201,117(1) $30,667(2)
Common Shares,
par value $1.00 per share.... 648,774 $21.84375(3) $14,171,657(3) $3,940
Total 4,405,660 $21.84375 $115,372,774 $34,607
==================================================================================================================
</TABLE>

<PAGE>

(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933
solely for purposes of determining the registration fee, based on the
average of the high and low sale prices of the registrant's Common
Shares as reported on The New York Stock Exchange Composite Tape on
September 25, 1998.
(2) This portion of the fee was paid in connection with the initial filing
of this Registration Statement on September 29, 1998.
(3) Estimated pursuant to Rule 457(c) under the Securities Act of 1933
solely for purposes of determining the registration fee, based on the
average of the high and low sale prices of the registrant's Common
Shares as reported on The New York Stock Exchange Composite Tape on
December 16, 1998.

------------------------
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 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>

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.

PROSPECTUS SUBJECT TO COMPLETION

DATED DECEMBER 21, 1998

4,405,660 Shares

LA SALLE RE HOLDINGS LIMITED

Common Shares
-------------

This Prospectus covers 4,405,660 Common Shares, par value $1.00
per share ("Common Shares"), of LaSalle Re Holdings Limited (the "Company"
or "Holdings") offered for the account of certain shareholders of the
Company or of the Company's subsidiary LaSalle Re Limited ("LaSalle Re")
(the "Selling Shareholders"). Such Common Shares (the "Shares") may be
offered by the Selling Shareholders from time to time in transactions on
the New York Stock Exchange, in negotiated transactions, through a
combination of such methods of sale, or otherwise, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices
related to prevailing market prices, or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to or
through underwriters or broker-dealers, who may receive compensation in the
form of discounts, concessions or commissions from the Selling Shareholders
and/or the purchasers of the Shares for whom such underwriters or
broker-dealers may act as agents or to whom they may sell as principals, or
both (which compensation as to a particular underwriter or broker-dealer
might be in excess of customary commissions). If any underwriters are
involved in the sale of any of the Shares, their names, the terms and
conditions of such underwriting and any applicable compensation
arrangements will be set forth, or will be calculable from the information
set forth, in a prospectus supplement. The Company will not receive any of
the proceeds from the sale of the Shares by the Selling Shareholders. The
Company has agreed to bear all expenses of registration of the Shares, but
all selling expenses incurred by a Selling Shareholder will be borne by
that Selling Shareholder. See "Plan of Distribution."

Certain of the Shares are issuable to Selling Shareholders who
were among the founding shareholders of LaSalle Re (the "Founding
Shareholders") in exchange for exchangeable non-voting shares, par value
$1.00 per share, of LaSalle Re ("Exchangeable Non-Voting Shares"). The
Exchangeable Non-Voting Shares and options therefor were issued to the
Founding Shareholders as part of the reorganization that occurred in
connection with the Company's initial public offering (the
"Reorganization"). At the time of the Reorganization, the Company and
LaSalle Re entered into a conversion agreement with the Founding
Shareholders (the "Conversion Agreement") providing for an exchange of
Exchangeable Non-Voting Shares for Common Shares on a one-for-one basis
upon the terms set forth therein. In addition to the Shares issuable
pursuant to the terms of the Conversion Agreement, certain of the Shares
are Common Shares that were issued to Founding Shareholders as part of the
Reorganization.

The Selling Shareholders and any broker-dealers, agents or
underwriters that participate with the Selling Shareholders in the
distribution of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any commissions paid or any discounts or concessions allowed to any such
persons, and any profits received on the resale of the Shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act. See "Selling Shareholders" and "Plan of Distribution."

The Common Shares are traded on the New York Stock Exchange
("NYSE") under the symbol "LSH." On December 18, 1998, the closing price of
the Common Shares as reported on the NYSE was $21.00 per share.

<PAGE>

-------------
See "Risk Factors" on page 5 for a description of
certain matters that should be considered by
prospective purchasers of the 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.
-------------

No person has been authorized to give any information or to make
any representation other than those contained or incorporated by reference in
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a solicitation of any
offer to buy any security other than the Common Shares offered by this
Prospectus, nor does it constitute an offer to sell or solicitation of any
offer to buy the Common Shares by anyone in any jurisdiction in which such
offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so or to any person to whom 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
time subsequent to the date hereof.

The date of this Prospectus is _______________, 1998

<PAGE>

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 AND TRANSFER OF THE SHARES BEING OFFERED PURSUANT TO THIS OFFERING TO
PERSONS NOT RESIDENT IN BERMUDA FOR EXCHANGE CONTROL PURPOSES. IN GIVING
SUCH CONSENT AND IN ACCEPTING THIS PROSPECTUS FOR FILING, THE BERMUDA
MONETARY AUTHORITY ACCEPTS NO RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF
ANY PROPOSAL OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR
OPINIONS EXPRESSED HEREIN. THE MINIMUM AMOUNT WHICH MUST BE RAISED BY THE
OFFERING FOR THE PURPOSES SET OUT IN SECTION 28 OF THE COMPANIES ACT 1981
OF BERMUDA IS NIL.

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.

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.

<PAGE>
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 such persons 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 informational 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 New York Stock Exchange, 11 Wall Street, New York, New York 10005. 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 Securities Act, with
respect to the 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 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 is 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 "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

<PAGE>

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."

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, which have heretofore been filed by the
Company with the Commission pursuant to the Exchange Act, File No. 1-12823,
are incorporated by reference herein and shall be deemed to be a part hereof:

(a) Annual Report on Form 10-K for the fiscal year ended
September 30, 1998; and

(b) The description of the Common Shares included in the
Registration Statement on Form 8-A dated March 28, 1997.

All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of the Shares (the "Offering") shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any subsequently filed
document which is incorporated or deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

The Company will provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon
the written or oral request of such person, a copy of any or all of the
documents incorporated herein by reference, other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
into such documents. Requests should be addressed to the principal
executive offices of LaSalle Re Holdings Limited, Attention: Investor
Relations, P.O. Box HM 1502, Hamilton HM FX, Bermuda (telephone (441)
292-3339, facsimile (441) 292-5152).

<PAGE>

NOTE ON 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 and incorporated by reference in this Prospectus are
generally located in the material set forth under the heading "Risk
Factors" 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 policy concerning dividends. 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,
including reinsurers that have increased their capacity as a result of
recent consolidations, or future market entrants; (v) a competitive
disadvantage resulting from certain of the Company's principal competitors
having higher financial ratings than the Company, any future decline in or
loss of the Company's financial ratings 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 or swap agreements; (xii) the passage of federal or state
legislation subjecting the Company to supervision or regulation in the
United States; (xiii) 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; (xiv) a contention by the United
States Internal Revenue Service (the "IRS") that the Company or its
insurance subsidiary LaSalle Re is engaged in the conduct of a trade or
business within the U.S.; and (xv) any failure of the Company's computer
systems or the computer systems of third parties that are material to the
Company's operations (such as the computer systems of service providers,
suppliers and brokers) to process correctly information relating to dates
in and after the year 2000. 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.

RISK FACTORS

Prospective investors in the Shares offered hereby should consider
carefully the matters set forth below, as well as the other information set
forth in this Prospectus. Unless the context otherwise requires, references
herein to the "Company" include Holdings, the issuer of the Shares; 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"), which provides
capital support to selected syndicates at Lloyd's.

Limited Operating History

LaSalle Re commenced operations in November 1993 and has a limited
operating and claims history. The financial data included and incorporated
by reference 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.

<PAGE>

Volatility of Financial Results

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 dividends 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 and/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.
Catastrophic events of significant magnitude historically have been
relatively infrequent, although the Company believes that the property
catastrophe reinsurance market experienced a high level of worldwide
catastrophic losses in terms of both frequency and severity from the late
1980s to the early 1990s 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.

Ability to Pay Dividends; Holding Company Structure

The Company has adopted a dividend policy pursuant to which it
intends to distribute as dividends to holders of Common Shares and
Exchangeable Non-Voting Shares in each fiscal year 50% to 60% of the amount
by which its net income (before minority interest) from the prior fiscal
year exceeds the amount of dividends payable on Series A Preferred Shares
of the Company in the current fiscal year. However, there can be no
assurance that this dividend policy will not change or that the Company
will declare or pay any dividends. The Company's credit facility currently
restricts dividends to a maximum of 50% of net income from 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. Since the
Board of Directors of the Company (the "Board") is authorized to issue
additional classes or series of preferred shares, the Company could incur
obligations in the future to pay additional preferred dividends. The
payment of dividends will result in the Company having less capital
available to sustain catastrophic losses than would otherwise be the case.
If substantial losses were to occur, the ability of the Company to pay
dividends could be adversely affected.

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 dividends to its
shareholders. The payment of dividends by LaSalle Re to Holdings is limited
under Bermuda law and regulations, including The Insurance Act 1978
(together with amendments thereto and related regulations, the "Insurance
Act"). Under the Insurance Act, during any financial year LaSalle Re is
prohibited from paying dividends of more than 25% of its opening total
statutory capital and surplus unless it files with the Bermuda Registrar of
Companies before payment of such dividend 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 on the last day of the previous financial year. Based on the
foregoing regulation, LaSalle Re is entitled to pay dividends of up to
approximately $123 million during the current 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 15%
or more without the approval of the Minister of Finance. Because the
Company is a holding company, the right of the Company, and hence the right
of creditors and shareholders of the Company, to participate in any
distribution of assets of any subsidiary, including LaSalle Re, upon its
liquidation or reorganization or otherwise is necessarily subject to the
prior claims of creditors of the subsidiary, except to the extent that
claims of the Company itself as a creditor of the subsidiary may be
recognized. There can be no assurance that Holdings will have sufficient
funds to pay dividends to holders of the Shares.

<PAGE>

Cessions from CNA; Transactions with Affiliates; Conflicts of Interest

During each year of the Company's operations, CNA has ceded to the
Company a portion of its book of property catastrophe reinsurance business.
The terms of these cessions to the Company have been negotiated between the
parties and the Company believes that they are at market rates. This ceded
business represented 10.2%, 12.5% and 12.7% of the Company's premiums
written in the nine months ended June 30, 1998 and the fiscal years ended
September 30, 1997 and 1996, 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 nine months ended
June 30, 1998, 50.6% of the Company's premiums written represented
U.S.-based risks and the remaining 49.4% 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.

Effective on October 1, 1998, the Company assumed direct
responsibility for its underwriting and all of the personnel formerly
assigned by CNA (Bermuda) Services Limited ("CNA Bermuda") to provide
contract underwriting services to the Company became employees of the
Company. In connection with these changes, the Company entered into an
underwriting support services agreement (the "Underwriting Support Services
Agreement') with CNA Re Services Company ("CRSC") and CNA Bermuda. Under
the Underwriting Support Services Agreement, which expires on September 30,
2001, CRSC and CNA Bermuda provide the Company, on a daily or hourly fee
basis, with various support services upon request, including (i)
underwriting personnel to assist the Company's underwriting staff on a
temporary basis, (ii) assistance with actuarial, financial and statistical
analysis and reporting, (iii) support on data processing and other
technical matters, (iv) access to the CNA reinsurance underwriting database
and technology as pertinent to the Company's business, (v) advice on
insurance industry customs and practices and (vi) advice to the Company's
human resources department. The Company pays CNA Bermuda a $333,333 annual
retainer, which is credited against CRSC's daily or hourly fees and
associated travel expenses. In recognition of the contribution made by CNA
Bermuda to the development of the Company's business, the Company has
agreed, subject to certain conditions, to pay CNA Bermuda an underwriting
profit commission of 1.67% of the aggregate net underwriting profits of
LaSalle Re for each fiscal year during the term of the Underwriting Support
Services Agreement for which the Company's loss ratio was 70% or less. With
respect to business written prior to October 1, 1998, the Underwriting
Support Services Agreement provides for the Company to pay CNA Bermuda the
service fee and underwriting profit commission, subject to certain
modifications, that would have been due under the former underwriting
services agreement, which was terminated effective on October 1, 1998.

The Underwriting Support Services Agreement may give rise to
potential conflicts of interest between CNA and the Company. However, as
provided under Bermuda law, directors who have an interest in any matter
are permitted under the Company's 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. The Underwriting
Support Services Agreement was approved at a meeting of the board of
directors of the Company, by both a unanimous vote of the directors present

<PAGE>

and a unanimous vote of all of the directors present who were not affiliated
with CNA. Conflicts of interest could also arise from the fact that CNA
competes with the Company for property catastrophe and other lines of
reinsurance underwritten by the Company. In addition, CNA, Aon Corporation
("Aon") 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 CNA, Aon or other Founding
Shareholders, on the one hand, and the Company, on the other hand. CNA and
Aon 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 Operating Officer, Guy D. Hengesbaugh (who
is also President and Chief Operating Officer of LaSalle Re), and its Senior
Vice President and Chief Financial Officer, Andrew Cook. The Company has
entered into employment agreements with Mr. Blake, Mr. Hengesbaugh and Mr.
Cook. The Company does not maintain key-man life insurance on any of its
executive officers.

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, Messrs. Blake and
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. Mr. Hengesbaugh is currently entitled
to be employed in Bermuda based on his marriage to a Bermudian and other
factors. Such entitlement would be lost in the absence of any such factor,
in which case Mr. Hengesbaugh would be required to obtain a work permit in
order to continue his employment in Bermuda. There can be no assurance that
such a work permit would be granted.

Business Considerations

Based on the Company's marketing efforts, reinsurance contract
submissions and publicly available information, the Company believes that
property catastrophe rates have decreased somewhat in 1996, 1997 and 1998
from 1995 levels. 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. If and while
favorable loss experience continues and reinsurance capacity does not
diminish, the Company expects further downward pressure on rates during
1998. Based on the 1998 contract renewals that have occurred to date, the
Company estimates that it has experienced overall rate decreases of
approximately 10% to 15% compared to 1997. As rates decline, the Company
expects net premiums written from property catastrophe reinsurance to
decline in 1998. 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 further. The Company has expanded into other lines of business
where pricing opportunities have occurred. These lines currently include
property risk excess, property pro rata treaty, casualty clash, marine,
crop hail, aviation and satellite. There can be no assurance that these
pricing opportunities will continue.

Lloyd's

Through its subsidiary, LaSalle Re Capital, the Company provides
capital support to selected Lloyd's syndicates. The Company has provided
capital support to three syndicates for both the 1997 and 1998 years of
account of approximately $27.4 million ((pound)16.3 million) and $28.2
million ((pound)16.8 million), respectively. Through this support,

<PAGE>

as at June 30, 1998, the Company has written gross premiums of
approximately $20.6 million for the 1997 year of account and approximately
$13.9 million for the 1998 year of account. The three supported syndicates
individually write the following lines of business: direct and facultative
property insurance; marine insurance and reinsurance; and professional
indemnity, directors and officers insurance and bankers blanket bond
business. The three-year accounting system operated by Lloyd's necessitates
the use of estimates and assumptions in producing financial results for a
12-month period. In consolidating the results of LaSalle Re Capital, these
estimates and assumptions affect the 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. There can be no assurance that actual results
will not be significantly different from those estimates. The estimates
most susceptible to significant change are those used in determining the
liability for unpaid losses and loss expenses and the amount of ultimate
premiums written.

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 relatively young 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 CNA. The Company also establishes loss reserves with respect
to other lines of business, of which the main component is the premium
written by LaSalle Re Capital. The amounts included as loss reserves are
derived from analyses of expected loss ratios. The Company believes that
its loss reserves to date have been adequate. In contrast to casualty
losses, which frequently can be determined only through lengthy,

<PAGE>

unpredictable litigation, non-casualty 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 by the Company's executive officers
and the underwriting committee of the Board. In addition, during the 1998
fiscal year, the Company has contracted for external actuarial services to
further enhance the quality of the review process. As loss reserves 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.

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.
Moreover, several recent consolidations in the reinsurance industry have
increased the capacity of certain of the Company's competitors. Another
current trend in the property catastrophe industry has been the utilization
of the capital markets in structuring reinsurance agreements using
catastrophe bonds and other financial instruments. This means that the
Company now faces competition from other financial institutions besides
traditional reinsurers. There may also 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 "A" (Excellent) by A.M. Best
Company, Inc. and "A" (Good) by Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc. 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.

<PAGE>

Other than being a corporate member of selected Lloyd's
syndicates, 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 115% of 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.

Regulation

LaSalle Re is registered as an insurer and is subject to
regulation and supervision in Bermuda under the Insurance Act. The
Insurance Act generally is designed to protect insureds and ceding
insurance companies rather than shareholders. Among other things, the
Insurance Act requires LaSalle Re to maintain minimum levels of capital and
surplus, prescribes solvency margins that must be maintained and requires
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.

LaSalle Re is not registered or licensed as an insurance company
in any jurisdiction other than Bermuda. For the nine months ended June 30,
1998, 45.5% 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.
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.

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

<PAGE>

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.

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.

LaSalle Re Capital is subject as a corporate member of Lloyd's to
Lloyd's regulation and its ability to continue to underwrite as such in
future years may be affected by changes in such regulation. The volume of
business which can be written from one year of account to the next will
also be dependent on the level of funds made available by the Company to
support such underwriting. Based on its corporate membership in Lloyd's,
LaSalle Re Capital is also registered in Bermuda under the Insurance Act as
a "member of a recognised association of underwriters."

Tax Matters

Holdings, LaSalle Re and LaSalle Re Capital 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 not to 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 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 is a corporate member of
Lloyd's. Pursuant to a Closing Agreement between Lloyd's and the IRS,
LaSalle Re Capital will be treated as engaged in business in the U.S. and
is subject to U.S. corporate income tax on its net income from U.S.
sources.

LaSalle Re Services is subject to U.K. corporation tax on its
income. However, the Company believes that the taxable income of LaSalle Re
Services is modest, and that its tax liability is and will continue to be
small. As a corporate member of Lloyd's, LaSalle Re Capital is subject to
U.K. corporation tax on any profits and gains, net of deductible
expenditure, derived from its participation in any Lloyd's syndicates. As a
participant in such syndicates, LaSalle Re Capital is also required to
charge and account to the U.K. Inland Revenue for value added tax on
chargeable supplies of services. The Company believes that the activities
of LaSalle Re Services and LaSalle Re Capital will not cause LaSalle Re or
the Company to be subject to U.K. tax on any portion of their net income.

<PAGE>

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 total combined voting
power of all classes of stock of Holdings, LaSalle Re and/or LaSalle Re
Capital. 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 shares that results in any
shareholder (other than a registered investment company under the U.S.
Investment Company Act of 1940, as amended (an "Investment Company"))
beneficially owning more than 5.0% of the outstanding capital stock of
Holdings or any shareholder holding "Controlled Shares" (defined as all
shares that a person is deemed to own directly, indirectly or by
attribution within the meaning of Section 958 of the Code) in excess of
9.9% of the outstanding capital stock of Holdings. The Bye-Laws provide
that 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. 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 at fair market value all or part of the shares
held by such shareholder to the extent the Board determines it is necessary
to avoid such adverse or potential adverse consequences.

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.

<PAGE>

Service of Process and Enforcement of Judgments

THE COMPANY

The Company primarily writes property catastrophe reinsurance on a
worldwide basis through its subsidiary, LaSalle Re. 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. Therefore, there can
be significant volatility in the Company's results from fiscal quarter to
quarter and fiscal year to year. The Company also seeks to diversify its
book of business and take advantage of pricing opportunities by offering
other lines of reinsurance as appropriate. These lines currently include
property risk excess, property pro rata treaty, casualty clash, marine,
crop hail, aviation and satellite. In addition, through LaSalle Re Capital,
the Company provides capital support to selected Lloyd's syndicates which
individually write the following lines of business: direct and facultative
property insurance; marine insurance and reinsurance; and professional
indemnity, directors and officers insurance and bankers blanket bond
business. As a result of the Company's limited operating and claims
history, the financial data included and incorporated by reference herein are
not necessarily indicative of the results of operations or financial
condition of the Company in the future.

USE OF PROCEEDS

The Company will not receive any of the proceeds from the sale of
Shares, nor will any such proceeds be available for use by the Company or
otherwise for the Company's benefit.

SELLING SHAREHOLDERS

The following table sets forth certain information as of December 16,
1998 regarding the beneficial ownership of Common Shares by each of the
Selling Shareholders and the Shares offered hereby by such Selling
Shareholders.

14
<PAGE>

Common Shares Number of Common Shares
Beneficially Common Number of Beneficially
Owned Prior Shares to Be Shares Owned After
Name of to Offering (1)(2) Acquired by Being Offering (1)(2)(3)
Selling Shareholder Number Percent Exchange(2) Offered Number Percent
------------------- ------ ------- ----------- ------- ------ -------

<S> <C> <C> <C> <C> <C> <C>
Aon Risk Consultants
(Bermuda) Ltd.................. 555,244 3.52% 0 555,244 0 0%

CNA (Bermuda) Services
Limited........................ 0 0 318,150 318,150 0 0

Combined Insurance
Company of America............. 325,015 2.06 0 325,015 0 0

Continental Casualty
Company........................ 1,425,354 9.04 136,350 136,350 1,425,354 8.49

Corporate Offshore
Partners L.P................... 55,380 * 27,602 82,982 0 0

Corporate Partners L.P......... 775,725 4.92 386,620 1,162,345 0 0

Engineers Joint Pension 0 * 268 268 0 0
Fund...........................

Ida Louis Company.............. 209,996 1.33 0 209,996 0 0

Perry Partners
International Inc.............. 0 * 625 625 0 0

Perry Partners L.P............. 0 * 12,508 12,508 0 0

SDI, Inc....................... 974,710 6.18 68,175 1,042,885 0 0

State Board of
Administration of Florida...... 80,812 * 40,278 121,090 0 0

Strome Partners L.P............ 0 * 27,270 27,270 0 0

Third Avenue Value Fund........ 85,917 * 0 85,917 0 0

Virginia Surety Company,
Inc............................ 325,015 2.06 0 325,015 0 0

</TABLE>
- ------------------
* Less than 1%.

(1) Information with respect to beneficial ownership is based upon
information obtained from the Selling Shareholders, has been
computed in accordance with Rule 13d-3 promulgated under the
Exchange Act and is based upon 15,773,274 Common Shares
outstanding as of December 16, 1998.

(2) The Selling Shareholders are all Founding Shareholders of LaSalle
Re. In connection with the Reorganization, certain Selling
Shareholders received Exchangeable Non-Voting Shares (and in some
cases, options therefor) that are exchangeable on a one-for-one
basis for Common Shares pursuant to the terms of the Conversion
Agreement. Certain of the Shares are Common Shares issuable upon
such exchanges and are set forth under the column headed "Number
of Common Shares to Be Acquired by Exchange." Such Shares are not
included in the column headed "Common Shares Beneficially Owned
Prior to Offering" because, under the terms of the Conversion
Agreement, each Selling Shareholder's right to exchange
Exchangeable Non-Voting Shares for Common Shares is subject to
prior Board approval. The Board has granted prior approval only
for such exchanges of Exchangeable Non-Voting Shares as may be
requested in conjunction with a sale of Shares pursuant to this
Registration Statement.

(3) Assumes the sale of all Shares offered hereby and no other purchases
or sales of Common Shares. See "Plan of Distribution."

<PAGE>

Two of the Selling Shareholders, Combined Insurance Company of
America and Virginia Surety Company, are affiliates of Aon. Another
affiliate of Aon, Aon Advisors (UK) Limited, provides the Company with
investment management services. Other affiliates of Aon formerly provided
the Company with claims administration, actuarial and financial reporting,
accounting, office space and other administrative services. In addition,
certain brokers affiliated with Aon produce business for the Company. Two
of the Selling Shareholders, CNA Bermuda and Continental Casualty Company,
are affiliates of CNA. CNA Bermuda and CRSC, also a CNA affiliate,
currently provide the Company with underwriting support services and
certain insurance companies affiliated with CNA cede business to the
Company. See "Risk Factors--n Cessions from CNA; Transactions with
Affiliates; Conflicts of Interest."

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 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 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 Offering 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 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. 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 in the event of there being enacted in
Bermuda any legislation imposing tax computed on profits or income, or

<PAGE>

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, LaSalle Re and LaSalle Re
Capital. Holdings, LaSalle Re and LaSalle Re Capital, under current rates,
each pay annual Bermuda government fees of $15,900, $15,900 and $1,695,
respectively, and each of LaSalle Re and LaSalle Re Capital currently pays
annual insurance fees of $1,155. In addition, all entities employing
individuals in Bermuda are required to pay a payroll tax to the Bermuda
government.

United Kingdom

LaSalle Re Services is subject to tax in the United Kingdom on its
income and is also required to charge and account to the U.K. Inland
Revenue for value added tax on chargeable supplies of services. However,
the Company believes that the taxable income of LaSalle Re Services will be
modest, and that its tax liability is and will continue to be small.
LaSalle Re Capital is a corporate member of Lloyd's and is subject to U.K.
corporation tax on any profits and gains, net of deductible expenditure,
deriving from its participation in any Lloyd's syndicates. 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 relating to the
taxation of insurance enterprises (the "Bermuda Treaty"). Pursuant to the
Bermuda Treaty business profits earned by an insurance company that is a
resident 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, an insurance
enterprise resident in Bermuda 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.

The Company believes, based on the activities of Holdings and
LaSalle Re with respect to the United States, that 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.

<PAGE>

It is uncertain whether LaSalle Re will be entitled to relief
under the permanent establishment provisions of the Bermuda Treaty upon
completion of the 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 Holdings 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 is a corporate member of Lloyd's. Pursuant to
a Closing Agreement between Lloyd's and the IRS, LaSalle Re Capital will be
treated as engaged in business in the U.S. and is 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.

Taxation of Shareholders

Bermuda Taxation

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

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

<PAGE>

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.

<PAGE>

In determining the U.S. 10% shareholders of LaSalle Re and LaSalle
Re Capital, capital stock of LaSalle Re and LaSalle Re Capital that is held
indirectly by U.S. persons through Holdings or any other non-U.S. entity is
treated as held by United States persons. A holder of Common Shares will be
treated as owning indirectly a proportion of the capital stock of LaSalle
Re and LaSalle Re Capital corresponding to the ratio that the Common Shares
owned by such person bears to the value of all the capital stock of
Holdings. The Bye-Laws require prior Board approval for any transfer of
shares that results in any shareholder (other than an Investment Company)
beneficially owning more than 5.0% of the outstanding capital stock of
Holdings or any shareholder holding actually, indirectly through foreign
entities or constructively more than 9.9% of the outstanding capital stock
of Holdings. 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 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. Because of
the foregoing provisions, the Company believes that neither Holdings,
LaSalle Re nor LaSalle Re Capital is a CFC under the general rules
described above. 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 foreign 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 (the "RPII 20% Ownership Exception"), or the RPII of
each of LaSalle Re Capital, determined on a gross basis, is less than 20%
of such corporation's gross insurance income for such taxable year (the
"RPII 20% Gross Income Exception"), 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 taxable 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, 1998, 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.

<PAGE>

Computation of RPII. In order to determine how much RPII LaSalle
Re and LaSalle Re Capital have earned in each taxable 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 or LaSalle Re Capital does not meet either the RPII 20%
Ownership Exception or the RPII 20% Gross Income Exception 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. The aggregate amount of RPII
allocable to U.S. Holders of Common Shares who are required to include RPII
of LaSalle Re or LaSalle Re Capital in income for a given taxable year
normally is the amount of RPII which bears the same ratio to the total RPII
of such corporation for that taxable year as the amount of earnings and
profits which would be distributed indirectly through Holdings with respect
to the Common Shares if all earnings and profits of such corporation were
distributed on the last day of that taxable year bears to the total
earnings and profits of such corporation for that taxable year which would
be distributed with respect to all shares of such corporation owned,
directly or indirectly through Holdings, by U.S. Holders. If LaSalle Re or
LaSalle Re Capital has RPII and Holdings makes a distribution of such RPII
to a U.S. Holder with respect to the Common Shares, such dividends will not
be taxable to the extent of any RPII that has been included in the gross
income of such holders for the taxable year in which the distribution was
paid or for any prior year.

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 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 taxable 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 any 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 10% in value of the

<PAGE>

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, 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 taxable 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) requires a
tax-exempt entity owning, directly or indirectly through a foreign entity
or constructively under Code section 958(b) shares of Holdings, LaSalle Re
or LaSalle Re Capital, 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. 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, 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 20% 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 such corporation meets either the RPII 20%
Ownership Exception or the RPII 20% Gross Income Exception. 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.

<PAGE>

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
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.

<PAGE>

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 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.

24
<PAGE>

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"),
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.

PLAN OF DISTRIBUTION

Sales of the Shares may be effected by or for the account of the
Selling Shareholders from time to time in transactions on the NYSE (either
in ordinary brokerage transactions or in block transactions), in negotiated
transactions, through a combination of such methods of sale, or otherwise,
at fixed prices that may be changed, at market prices prevailing at the
time of sale, at prices related to prevailing market prices, or at
negotiated prices. The consideration for the Shares may be in the form of
cash or securities or such other form of consideration as may be acceptable
to the Selling Shareholders. The Selling Shareholders may effect such
transactions by selling the Shares directly to purchasers, through
underwriters or broker-dealers acting as agents for the Selling
Shareholders, or to underwriters or broker-dealers who may purchase Shares
as principals and thereafter sell the Shares from time to time in
transactions on the NYSE, in negotiated transactions, through a combination
of such methods of sale, or otherwise. In effecting sales, underwriters or
broker-dealers engaged by a Selling Shareholder may arrange for other
underwriters or broker-dealers to participate. Such underwriters or
broker-dealers, if any, may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the
purchasers of the Shares for whom such underwriters or broker-dealers may
act as agents or to whom they may sell as principals, or both (which
compensation as to a particular underwriter or broker-dealer might be in
excess of customary commissions). If any underwriters are involved in the
sale of any of the Shares, their names, the terms and conditions of such
underwriting and any applicable compensation arrangements will be set
forth, or will be calculable from the information set forth, in a
prospectus supplement.

The Selling Shareholders and any underwriters, broker-dealers or
agents that participate with the Selling Shareholders in the distribution
of the Shares may be deemed to be "underwriters" within the meaning of the
Securities Act. Any commissions paid or any discounts or concessions
allowed to any such persons, and any profits received on the resale of the
Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Underwriters, broker-dealers and agents
may be entitled, under agreements entered into with the Selling
Shareholders, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act. Any such
indemnification agreements will be described in the applicable Prospectus
Supplement.

<PAGE>

The Company has agreed to bear all expenses of registration of the
Shares (other than fees and expenses, if any, of counsel or other advisors
to the Selling Shareholders). Any commissions, discounts, concessions or
other fees, if any, payable to broker-dealers in connection with any sale
of the Shares will be borne by the Selling Shareholder selling such Shares.

LEGAL MATTERS

Certain legal matters with respect to Bermuda law and the validity
of the Shares offered hereby under Bermuda law are being passed upon for
the Company by Conyers Dill & Pearman, Hamilton, Bermuda. Certain legal
matters with respect to United Kingdom law are being passed upon for the
Company by Clyde & Co, London, England. Certain legal matters with respect
to United States law are being passed upon for the Company by Mayer, Brown
& Platt, Chicago, Illinois.

EXPERTS

The consolidated financial statements of the Company as of
September 30, 1997 and 1996, and for each of the years in the three-year
period ended September 30, 1997, have been incorporated by reference herein
and in the Registration Statement in reliance upon the report of KPMG Peat
Marwick, independent chartered accountants, incorporated by reference
herein and in the Registration Statement of which this Prospectus is a
part, and upon the authority of said firm as experts in accounting and
auditing.

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated expenses in
connection with the issuance and distribution of the securities registered
hereby:

Securities and Exchange Commission registration fee...... $ 30,667
Accounting fees and expenses............................. 5,000*
Legal fees and expenses.................................. 60,000*
Miscellaneous............................................ 4,333*
----------
Total................................ $100,000*
=========

- ---------
*Estimated

Item 15. Indemnification of Officers and Directors.

As permitted by the provisions of the Companies Act 1981 of
Bermuda, the Company 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 the Company or its shareholders 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
fraud or dishonesty in the performance of his duty to the Company.

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

Item 16. Exhibits.

See Index to Exhibits which is incorporated herein by reference.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:

(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value
of securities offered would not exceed that which
was registered) and any deviation from the low or
high end of the estimated maximum offering range
may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;

II-1

<PAGE>

(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;

provided, however, that paragraphs (a)(i) and (a)(ii) do
not apply if the registration statement is on Form S-3,
Form S-8 or Form F-3, and the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrants pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the
registration statement.

(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment 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.

(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.

The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Company's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrants pursuant to the provisions set forth or
described in Item 15 of this Registration Statement, or otherwise, the
registrants have been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by a registrant of expenses incurred or paid by a director,
officer or controlling person of such 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
registrants will, unless in the opinion of their counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

II-2

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Hamilton, Bermuda, on
December 21, 1998.

LASALLE RE HOLDINGS LIMITED

By: /s/ Andrew Cook
Name: Andrew Cook
Title: Senior Vice President and
Chief Financial Officer

<PAGE>

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 indicated and on the 21st day of December, 1998.

Signature Title
--------- -----

/s/ Victor H. Blake* Chairman, President and
Victor H. Blake Chief Executive Officer
(Principal Executive Officer)

/s/ Andrew Cook Senior Vice President and
Andrew Cook Chief Financial Officer
(Principal Financial Officer)

/s/ Clare Moran* Vice President - Finance
Clare Moran (Principal Accounting Officer)

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

/s/ Clement S. Dwyer, Jr.* Director
Clement S. Dwyer, Jr.

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

/s/ Tim I. Madden* Director
Tim I. Madden

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

/s/ Paul J. Zepf* Director
Paul J. Zepf

AUTHORIZED REPRESENTATIVE

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the
undersigned as the duly authorized representative of the Registrant in the
United States.

/s/ William J. Adamson, Jr.*
William J. Adamson, Jr.

Date: December 21, 1998

*By /s/ Andrew Cook
Andrew Cook
Attorney-in-Fact

II-3

<PAGE>

INDEX TO EXHIBITS

Exhibit Document Description
- ------- --------------------

4.1 Memorandum of Association (incorporated by reference to
Exhibit 3.1 to Registration Statement on Form S-1 (No. 33-97304)).

4.2 Bye-Laws (incorporated by reference to Exhibit 3.2 to Form 10-Q
for the quarterly period ended March 30, 1998 (File No. 1-12823)).

5.1* Opinion of Conyers Dill & Pearman regarding the validity of
the Shares.

8.1 Opinion of Conyers Dill & Pearman regarding certain
Bermuda tax matters (included in Exhibit 5.1).

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.

23.1 Consent of Conyers Dill & Pearman (included in Exhibit 5.1).

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).

----------

* Previously filed.

II-4

Exhibit 23.4

[Letterhead of KPMG Peat Marwick]

The Board of Directors
LaSalle Re Holdings Limited

We consent to incorporation by reference in the registration statement on
Form S-3 of LaSalle Re Holdings Limited of our report dated October 30,
1997, relating to the consolidated balance sheets of LaSalle Re Holdings
Limited and subsidiaries as of September 30, 1997 and 1996, and the related
consolidated statements of operations, changes in shareholders' equity and
cash flows for each of the years in the three-year period ended September 30,
1997, and all related schedules, which report appears in the September 30,
1997 annual report on Form 10-K of LaSalle Re Holdings Limited, and to
the reference to our firm under the heading "Experts".

/s/ KPMG PEAT MARWICK

Hamilton, Bermuda Chartered Accountants
December 15, 1998