GORAN CAPITAL INC, F-3, 1997-09-26

GORAN CAPITAL INC
F-3, 1997-09-26
FIRE, MARINE & CASUALTY INSURANCE

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As filed with the Securities and Exchange Commission on September 26, 1997

- --------------------------------------------------------------------------------
Registration No. 333-___________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

GORAN CAPITAL INC.
(Exact name of Registrant as specified in its charter)

CANADA Not Applicable
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

181 University Avenue 4720 Kingsway Drive
Suite 1101 - Box 11 Indianapolis, Indiana 46205
Toronto, Ontario, Canada M5H 3M7
(416) 594-1155 (317) 259-6300
(Address, including zip code, and
telephone number, including area code,
of Registrant's Principal Executive Offices)

David L. Bates
Vice President and General Counsel
Goran Capital Inc.
4720 Kingsway Drive
Indianapolis, Indiana 46205
(416) 594-1155 (Canada), (317) 259-6384 (USA)
(Name and address, including zip code, and telephone number,
including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement is declared effective as the selling
shareholders shall determine.

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 offer
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] _________

If this Form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

CALCULATION OF REGISTRATION FEE

(1) Any additional shares of Common Shares to be issued as a result of stock
dividends, stock splits, or similar transactions shall be covered by this
Registration Statement as provided in Rule 416.
(2) Estimated solely to determine the registration fee and based on the average
of the high and low sales prices of the Common Shares of Goran Capital Inc. on
the Nasdaq Stock Market's National Market on September 24, 1997, pursuant to
Rule 457(c).

The Registrant hereby amends this Registration Statement on such date or
dates to delay its effective date until the Registrant shall file a further
amendment which specifically states that the Registration Statement shall become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
this Registration Statement shall become effective on such date as the
Securities and Exchange Commission shall determine.
<PAGE>

PROSPECTUS

Up to 400,000 Shares
GORAN CAPITAL INC.
Common Shares, (without par value)

The Common Shares covered by this prospectus ("Prospectus") are being sold
by certain affiliates of the registrant, Goran Capital Inc. (the "Company"). See
"Selling Securityholders; Plan of Distribution." Resales of Common Shares by
such affiliates may also be made under Rule 144 under the Securities Act of
1933, as amended (the "1933 Act").

The Common Shares are listed for trading on The Nasdaq Stock Market's
National Market (the "Nasdaq National Market") under the symbol "GNCNF" and on
the Toronto Stock Exchange ("TSE") under the symbol "GNC." On September 24,
1997, the last reported sale price on the Nasdaq National Market was US $27.50
per share.

The Common Shares may be offered from time to time in transactions on the
Nasdaq National Market, in negotiated transactions or otherwise at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.

The enforcement by investors of civil liabilities under the federal
securities laws may be affected adversely by the fact that the Company is
incorporated or organized under the laws of Canada, that certain of its officers
and directors may not be residents of the United States, that some or all of the
experts named in the Registration Statement may be residents of Canada and that
a portion of the Company's assets and said persons may be located outside the
United States.

See "Risk Factors" on page 9 hereof for a discussion of certain risk
factors that should be considered by prospective purchasers of Common Shares.

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

The date of this Prospectus is September 26, 1997.

<PAGE>
ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act"), as applicable to foreign private issuers,
and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). The Company has filed
with the Commission a Registration Statement (the "Registration Statement"), of
which this Prospectus is a part, on Form F-3 under the 1933 Act with respect to
Common Shares offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits relating
thereto. For further information with respect to the Company and the Common
Shares offered by this Prospectus, reference is made to such Registration
Statement and exhibits. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the Commission. Such information, and the reports and other
information filed with the Commission by the Company can be inspected and copied
at the Commission's public reference facilities located at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the following
Regional Offices: Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such materials may also be obtained from the Commission at
prescribed rates by mailing a request to the Public Reference Section of the
Commission, at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains a Web site on the Internet that
contains reports and other information regarding registrants that file
electronically with the Commission, including the Company. The address of such
site is: http://www.sec.gov. In addition, the Company furnishes its shareholders
with annual reports containing consolidated financial statements certified by an
independent chartered accounting firm. The financial statements included in such
reports will be prepared in accordance with Canadian generally accepted
accounting principles and will include a reconciliation of such information with
U.S. generally accepted accounting principles.

The Common Shares are listed for trading on the Nasdaq National Market
under the symbol "GNCNF" and on the TSE under the symbol "GNC" and reports and
other information concerning the Company can be inspected at such exchanges.

INCORPORATION OF DOCUMENTS BY REFERENCE

With respect to any document incorporated by reference in this Prospectus
but not delivered herewith, the Company undertakes to provide without charge to
each person, including a beneficial owner, to whom this Prospectus is delivered,
upon written or oral request of such person, a copy of any and all of the
information that has been incorporated by reference herein (not including
exhibits to such information unless such exhibits are specifically incorporated
by reference into such information). Such requests may be addressed to Goran
Capital Inc., 181

2
<PAGE>

University Avenue, Suite 1101-Box 11, Toronto, Ontario, Canada M5H 3M7 or 4720
Kingsway Drive, Indianapolis, Indiana 46205. See "Incorporation of Certain
Information by Reference."

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein, or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein, modifies or replaces such statement. The
modifying or superseding statement need not state that it has modified or
superseded a prior statement or include any other information set forth in the
document that it modifies or supersedes. The making of a modifying or
superseding statement shall not be deemed an admission that the modified or
superseded statement, when made, constituted a misrepresentation, an untrue
statement of a material fact or an omission of a material fact required to be
stated or necessary to make a statement not misleading in light of the
circumstances in which it was made. Any statement so modified or superseded
shall not be deemed, in its unmodified or superseded form, to constitute a part
of this Prospectus.

ENFORCEABILITY OF CIVIL LIABILITIES
UNDER UNITED STATES FEDERAL SECURITIES LAW

The Company is a Canadian federally chartered corporation. Certain of the
directors and executive officers of the Company and certain experts named herein
are not residents of the United States. Certain assets of the Company and such
individuals and experts are located outside of the United States. As a result,
it may be difficult or impossible for shareholders of the Company to effect
service of process upon such persons within the United States with respect to
matters arising under the United States federal securities laws or to enforce
against them in United States courts judgments of such courts predicated upon
the civil liability provisions of the United States federal securities laws.
Shareholders of the Company should be aware that there is some doubt as to the
enforceability in Canada in original actions, or in actions for enforcement of
judgments of United States courts, of civil liabilities predicated upon the
United States federal securities laws. In addition, awards of punitive damages
and actions brought in the United States or elsewhere may be unenforceable in
Canada.

3
<PAGE>

No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations in connection with this
offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company, the Selling Shareholders or any Underwriter. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any securities other than the registered securities to which it relates
or an offer to, or solicitation of, any person in any jurisdiction where such an
offer or solicitation would be unlawful. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof or that the information contained herein is correct as of any
time subsequent to the date hereof.

TABLE OF CONTENTS
Page
PROSPECTUS................................................................. 1
ADDITIONAL INFORMATION..................................................... 2
INCORPORATION OF DOCUMENTS BY REFERENCE.................................... 2
ENFORCEABILITY OF CIVIL LIABILITIES
UNDER UNITED STATES FEDERAL SECURITIES LAW................................. 3
PROSPECTUS SUMMARY......................................................... 5
RISK FACTORS............................................................... 8
USE OF PROCEEDS............................................................ 18
DETERMINATION OF OFFERING PRICE............................................ 18
SELLING SECURITY HOLDERS; PLAN OF DISTRIBUTION............................. 18
LEGAL MATTERS.............................................................. 20
EXPERTS .................................................................. 20
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.......................... 20

<PAGE>

PROSPECTUS SUMMARY

Unless the context indicates otherwise, (i) the "Company" refers to Goran
Capital Inc., a Canadian corporation and its subsidiaries, (ii) "SIG" refers to
Symons International Group, Inc., an Indiana corporation and 67% owned
subsidiary of the Company, and its subsidiaries, (iii) the "Subsidiaries" refer
to the direct and indirect subsidiaries of the Company, and (iv) the "Insurers"
refer to IGF Insurance Company, an Indiana property and casualty insurance
company and a wholly-owned subsidiary of SIG ("IGF"), and, through SIG's
ownership of GGS Management Holdings, Inc. ("GGS Holdings"), Pafco General
Insurance Company, an Indiana property and casualty insurance company ("Pafco"),
and Superior Insurance Company, a Florida property and casualty insurance
company, together with its subsidiaries ("Superior").

The Company

Goran Capital Inc., a specialty property and casualty insurer, underwrites
and markets nonstandard private passenger automobile insurance and crop
insurance. The Company believes that it has demonstrated an ability to acquire
under-performing niche insurance businesses and develop them toward their full
potential. Through its Subsidiaries, the Company writes business primarily in
the U.S. exclusively through independent agencies and seeks to distinguish
itself by offering high quality, technology based services for its agents and
policyholders. For the year ended December 31, 1996, the Company had
consolidated gross premiums written of approximately $307.6 million.

The Company writes nonstandard automobile insurance in the U.S. through
approximately 6,000 independent agencies in 18 states and writes crop insurance
in the U.S. through approximately 1,200 independent agencies in 39 states. Based
on a Company analysis of gross premiums written in 1996, the Company believes
that the combination of Pafco and Superior makes the Company's nonstandard
automobile group the twelfth largest underwriter of nonstandard automobile
insurance in the United States. Based on premium information compiled in 1996 by
the National Crop Insurance Services, Inc. ("NCIS"), the Company believes that
IGF is the fifth largest underwriter of Multi-Peril Crop Insurance ("MPCI") in
the United States.

Nonstandard automobile insurance products are designed for drivers who are
unable to obtain coverage from standard market carriers. These drivers are
normally charged higher premium rates than the rates charged for preferred or
standard risk drivers and generally purchase lower liability limits than
preferred or standard risk policyholders. According to statistical information
derived from insurer annual statements compiled by A.M. Best, the nonstandard
automobile market accounted for $17.4 billion in annual premium volume for 1995.

In April, 1996, SIG acquired Superior from Fortis, Inc. (the "Acquisition")
through GGS Holdings, which was then owned 52% by SIG and 48% by investment
partnerships affiliated with Goldman, Sachs & Co. (the "GS Funds"). The 48%
interest owned by GS Funds was purchased by SIG in August, 1997, utilizing a
portion of the proceeds of a $135 million offering

<PAGE>

of Trust Preferred Securities. See "Recent Developments." The Acquisition has
allowed SIG to expand its nonstandard automobile business through wider
geographic distribution and a broader range of products. Pafco writes business
primarily in the Midwest and Colorado, and Superior writes business primarily in
the Southeast (particularly Florida) and in California. SIG regularly evaluates
acquisition opportunities. There can be no assurance that any suitable
acquisition opportunities will arise.

IGF is a wholly-owned subsidiary of SIG located in Des Moines, Iowa. IGF
underwrites MPCI, crop hail insurance and other named peril crop insurance. MPCI
is a federally-subsidized program administered by the Federal Crop Insurance
Corporation ("FCIC"), which is a federally chartered corporation operated
through the United States Department of Agriculture ("USDA"). MPCI is designed
to provide farmers who suffer an insured crop loss due to the weather or other
natural perils with the funds needed to continue operations and plant crops for
the next growing season. For purposes of the profit/loss sharing arrangement
with the federal government, MPCI Premium is the amount of premiums credited to
IGF for all Buy-up Coverage (i.e. coverage in excess of CAT Coverage) sold,
consisting of amounts paid by farmers plus the amount of any related federal
premium subsidy. For the purpose of such profit/loss sharing arrangement, MPCI
Imputed Premium is the amount of premiums credited to IGF for all CAT Coverage
(i.e. the minimum level of MPCI providing coverage for 50% of historic yield at
60% of the per unit price set by the FCIC) it sells. For the year ended December
31, 1996, SIG wrote approximately $82.1 million in MPCI Premiums and $28.0
million in crop hail gross premiums. In addition to premium revenues, for the
same period, SIG received from the FCIC: (i) CAT Coverage Fees* in the amount of
$1.2 million, (ii) Buy-up Expense Reimbursement Payments** in the amount of
$25.0 million and (iii) CAT LAE Reimbursement Payments*** and MPCI Excess LAE
Reimbursement Payments**** in the aggregate amount of $5.8 million. IGF uses
proprietary software to write and service policies. The Company uses employee
claims adjusters rather than relying solely on part-time, independent contractor
adjusters as do many of its competitors. Management believes that the approaches
adopted by IGF's management team in the information technology, claims handling
and underwriting aspects of its business are innovations which provide IGF with
a competitive advantage in the crop insurance industry.

- --------

* A fixed administration fee of $50 per policy for which farmers may
purchase CAT Coverage.

** An expense reimbursement payment made by the FCIC to an MPCI insurer
equal to a percentage of gross premiums written for each Buy-up Coverage
policy written.

*** An LAE reimbursement payment made by the FCIC to an MPCI insurer equal
to 13% of MPCI Imputed Premiums for each CAT Coverage policy.

**** A small excess LAE reimbursement payment made by the FCIC to an MPCI
insurer to the extent that loss ratios on a per state basis exceed certain
levels.

<PAGE>

The Federal Crop Insurance Reform Act of 1994 (the "1994 Reform Act")
required farmers for the first time to purchase at least a basic level of MPCI
coverage ("CAT Coverage") in order to be eligible for other federally- sponsored
farm benefits, including but not limited to low interest loans and crop price
supports. The 1994 Reform Act also authorized for the first time the marketing
and selling of CAT Coverage by local USDA offices which has been eliminated for
the 1998 crop year. The Federal Agriculture Improvement and Reform Act of 1996
(the "1996 Reform Act"), signed into law by President Clinton in April, 1996,
limits the role of the USDA offices in the delivery of MPCI coverage beginning
in July, 1996, which is the commencement of the 1997 crop year, and also
eliminates the linkage between CAT Coverage and qualification for certain
federal farm program benefits. The limitation of the USDA's role in the delivery
system for MPCI should provide SIG with the opportunity to realize increased
revenues from the distribution and servicing of its MPCI product. As a result of
this limitation, the FCIC, through June, 1996 has transferred to IGF
approximately 8,900 insureds for CAT Coverage who previously purchased such
coverage from USDA field offices. The Company has not experienced any material
negative impact in 1996 from the delinkage mandated by the 1996 Reform Act. The
Company believes that any future potential negative impact of the delinkage
mandated by the 1996 Reform Act will be mitigated by, among other factors, the
likelihood that farmers will continue to purchase MPCI to provide basic
protection against natural disasters since ad hoc federal disaster relief
programs have been reduced or eliminated. In addition, the Company believes that
(i) lending institutions will likely continue to require this coverage as a
condition to crop lending and (ii) many of the farmers who entered the MPCI
program as a result of the 1994 Reform Act have come to appreciate the
reasonable price of the protection afforded by CAT Coverage and will remain with
the program regardless of delinkage. There can, however, be no assurance as to
the ultimate effect which the 1996 Reform Act may have on the business or
operations of the Company.

On June 9, 1997, the Secretary of Agriculture announced that the USDA would
no longer provide CAT Coverage through USDA offices in any state effective for
the 1998 crop year. This is to be implemented by a transferring of CAT policies
to the various members of the crop insurance industry. At this time, the Company
has been preliminarily informed that it will receive approximately 17,000
policies that were formerly written by USDA offices, although there can be no
assurance that the Company will receive this number of policies. Based on
historical, per-policy averages, the Company has preliminarily estimated that it
will receive an additional approximate $6 to $7 million in premiums from such
transferred policies, however, there can be no assurance that this number will
be realized. This estimate assumes that IGF will retain 100% of such premiums.
There can be no assurance as to the ultimate effect which the 1996 Reform Act
may have on the business or operations of the Company.

The Company also engages through subsidiaries other than SIG and its
subsidiaries in certain reinsurance and surplus lines operations. Granite
Reinsurance Company Ltd. of Barbados ("Granite Re"), a wholly-owned subsidiary
of the Company, underwrites finite risk reinsurance and stop-loss reinsurance
including reinsurance for crop insurance coverage written by IGF. Granite Re
participates in various programs of reinsurance in Bermuda, Canada and U.S.
reinsurance companies, Symons International Group, Inc. (Florida) ("SIGF"), also
a

<PAGE>

wholly-owned subsidiary of the Company, is a specialized surplus lines
underwriting unit based in Florida which provides certain commercial insurance
products through retail agencies, principally in the southeast United States,
SIGF writes these specialty products through a number of different insurers
including Pafco, United National Insurance Group, Munich American Reinsurance
Corp. and underwriters of Lloyd's of London. Effective January 1, 1996, SIG
transferred to the Company all of the shares of capital stock of SIGF. Also,
Granite Insurance Company ("Granite Insurance"), a Canadian federal insurance
company and wholly-owned subsidiary of the Company which stopped writing
insurance in 1990, has a book of property and casualty insurance business which
is in run-off.

The Common Shares of the Company are traded on the TSE under the symbol
"GNC" and on the Nasdaq National Market under the symbol "GNCNF."

The Company is a Canadian corporation; its principal executive offices in
Canada are located at 181 University Avenue, Suite 1101-Box 11, Toronto,
Ontario, Canada M5H 3M7 (telephone number (416) 594-1155) and its principal
executive offices in the U.S. are located at 4720 Kingsway Drive, Indianapolis,
Indiana 46205 (telephone number (317) 259-6300).

Recent Developments

In August, 1997, a $135 million offering of trust preferred securities
("Preferred Securities") was completed by SIG Capital Trust I. SIG Capital Trust
I then invested $135 million in senior subordinated notes of SIG. The proceeds
were used by SIG (i) to pay-down existing bank debt of approximately $44.9
million (ii) to purchase the shares of GGS Holdings held by GS Funds and (iii)
for general corporate purposes.

RISK FACTORS

There are certain risks involved in an investment in the Common Shares.
Accordingly, prospective purchasers of the Common Shares should consider
carefully the factors set forth below as well as the other information contained
in this Prospectus. Certain statements in this Prospectus and documents
incorporated herein by reference are forward-looking and are identified by the
use of forward-looking words or phrases such as "intended," "will be
positioned," "expects," is or are "expected," "anticipates" and "anticipated."
These forward-looking statements are based on the Company's current
expectations. To the extent any of the information contained in this Prospectus
constitutes a "forward-looking statement" as defined in Section 27A(i)(1) of the
1933 Act, the risk factors set forth below are cautionary statements identifying
important factors that could cause results to differ materially from those in
the forward-looking statement.

Uncertain Pricing and Profitability

One of the distinguishing features of the property and casualty industry is
that its products generally are priced before its costs are known, because
premium rates usually are determined

<PAGE>

before losses are reported. Premium rate levels are related in part to the
availability of insurance coverage, which varies according to the level of
surplus in the industry. Increases in surplus have generally been accompanied by
increased price competition among property and casualty insurers. The
nonstandard automobile insurance business in recent years has experienced very
competitive pricing conditions and there can be no assurance as to the Company's
ability to achieve adequate pricing. Changes in case law, the passage of new
statutes or the adoption of new regulations relating to the interpretation of
insurance contracts can retroactively and dramatically affect the liabilities
associated with known risks after an insurance contract is in place. New
products also present special issues in establishing appropriate premium levels
in the absence of a base of experience with such products' performance.

The number of competitors and the similarity of products offered, as well
as regulatory constraints, limit the ability of property and casualty insurers
to increase prices in response to declines in profitability or market demand. In
states which require prior approval of rates, it may be more difficult for the
Company to achieve premium rates which are commensurate with the Company's
underwriting experience with respect to risks located in those states. In
addition, the Company does not control rates on its MPCI business, which are
instead set by the FCIC. Accordingly, there can be no assurance that these rates
will be sufficient to produce an underwriting profit.

The reported profits and losses of a property and casualty insurance
company are also determined, in part, by the establishment of, and adjustments
to, reserves reflecting estimates made by management as to the amount of losses
and loss adjustment expenses ("LAE") that will ultimately be incurred in the
settlement of claims. The ultimate liability of the insurer for all losses and
LAE reserved at any given time will likely be greater or less than these
estimates, and material differences in the estimates may have a material adverse
effect on the insurer's financial position or results of operations in future
periods.

Nature of Nonstandard Automobile Insurance Business

The nonstandard automobile insurance business is affected by many factors
which can cause fluctuations in the results of operations of this business. Many
of these factors are not subject to the control of the Company. The size of the
nonstandard market can be significantly affected by, among other factors, the
underwriting capacity and underwriting criteria of standard automobile insurance
carriers. In addition, an economic downturn in the states in which the Company
writes business could result in fewer new car sales and less demand for
automobile insurance. Severe weather conditions could also adversely affect the
Company's business through higher losses and LAE. These factors, together with
competitive pricing and other considerations, could result in fluctuations in
the Company's underwriting results and net income.

<PAGE>

Nature of Crop Insurance Business

The Company's operating results from its crop insurance program can vary
substantially from period to period as a result of various factors, including
timing and severity of losses from storms, droughts, floods, freezes and other
natural perils and crop production cycles. Therefore, the results for any
quarter or year are not necessarily indicative of results for any future period.
The underwriting results of the crop insurance business are recognized
throughout the year with a reconciliation for the current crop year in the
fourth quarter.

The Company expects that for the foreseeable future a majority of its crop
insurance business will continue to be derived from MPCI business. The MPCI
program is federally regulated and supported by the federal government by means
of premium subsidies to farmers, expense reimbursement and federal reinsurance
pools for private insurers. As such, legislative or other changes affecting the
MPCI program could impact the Company's business prospects. The MPCI program has
historically been subject to modification at least annually since its
establishment in 1980, and some of these modifications have been significant. No
assurance can be given that future changes will not significantly affect the
MPCI program and the Company's crop insurance business.

The 1994 Reform Act also reduced the expense reimbursement rate payable to
the Company for its costs of servicing MPCI policies that exceed the basic CAT
Coverage level (such policies, "Buy-up Coverage") for the 1997, 1998 and 1999
crop years to 29%, 28% and 27.5%, respectively, of the MPCI Premium serviced, a
decrease from the 31% level established for the 1994, 1995 and 1996 crop years.
Historically, the FCIC has paid the maximum MPCI Buy-up Expense Reimbursement
Payment rate allowable by law, although no assurance can be given that this
practice will continue. Although the 1994 Reform Act directs the FCIC to alter
program procedures and administrative requirements so that the administrative
and operating costs of private insurance companies participating in the MPCI
program will be reduced in an amount that corresponds to the reduction in the
expense reimbursement rate, there can be no assurance that the Company's actual
costs will not exceed the expense reimbursement rate. The FCIC has appointed
several committees comprised of members of the insurance industry to make
recommendations concerning this matter.

The crop insurance industry has recently completed negotiation of the 1998
Standard Reinsurance Agreement ("1998 SRA") with the FCIC, with the 1998 SRA
providing for a 27% MPCI Buy-up Expense Reimbursement Payment rate and no change
to the CAT Coverage program from prior years.

The 1994 Reform Act also directs the FCIC to establish adequate premiums
for all MPCI coverages at such rates as the FCIC determines are actuarially
sufficient to attain a targeted loss ratio. Since 1980, the average MPCI loss
ratio has exceeded this target ratio. There can be no assurance that the FCIC
will not increase rates to farmers in order to achieve the targeted loss ratio
in a manner that could adversely affect participation by farmers in the MPCI
program above the CAT Coverage level.

<PAGE>

The 1996 Reform Act limits the role of USDA offices in the delivery of MPCI
coverage for the 1997 Crop Year and eliminated the linkage between CAT Coverage
and qualifications for certain federal farm program benefits. Currently, MPCI
coverage is not required for federal farm program benefits if producers sign a
written waiver that waives eligibility for emergency crop loss assistance. The
1996 Reform Act also provides that, effective for the 1997 Crop Year, the
Secretary of Agriculture may continue to offer CAT Coverage through USDA offices
if the Secretary of Agriculture determines that the number of approved insurance
providers operating in a state is insufficient to adequately provide
catastrophic risk protection coverage to producers. Effective June 9, 1997, the
Secretary of Agriculture announced that the USDA would no longer provide CAT
Coverage through USDA offices in any state. This is to be implemented by
transferring the collection of premium and administration of CAT policies to the
various members of the crop insurance industry. At this time, the Company has
been preliminarily informed that it will receive approximately 17,000 policies
that were formerly written by USDA offices, although there can be no assurance
that the Company will receive this number of policies. Based on historical,
per-policy averages, the Company has preliminarily estimated that it will
receive approximately an additional $6 to $7 million in premiums from such
transferred policies, however, there can be no assurance that this number will
be realized. This estimate assumes that IGF will retain 100% of such premiums.

Total MPCI Premium for each farmer depends upon the kind of crops grown,
acreage planted and other factors determined by the FCIC. Each year, the FCIC
sets, by crop, the maximum per unit commodity price ("Price Election") to be
used in computing MPCI Premiums. Any reduction of the Price Election by the FCIC
will reduce the MPCI Premium charged per policy, and accordingly will adversely
impact MPCI Premium volume.

The Company's crop insurance business is also affected by market conditions
in the agricultural industry which vary depending on such factors as federal
legislation and administration policies, foreign country policies relating to
agricultural products and producers, demand for agricultural products, weather,
natural disasters, technological advances in agricultural practices,
international agricultural markets and general economic conditions both in the
United States and abroad. For example, the number of MPCI Buy-up Coverage
policies written has historically tended to increase after a year in which a
major natural disaster adversely affecting crops occurs, and to decrease
following a year in which favorable weather conditions prevail.

Highly Competitive Businesses

Both the nonstandard automobile insurance and crop insurance businesses are
highly competitive. Many of the Company's competitors in both the nonstandard
automobile insurance and crop insurance business segments have substantially
greater financial and other resources than the Company, and there can be no
assurance that the Company will be able to compete effectively against such
competitors in the future.

<PAGE>

In its nonstandard automobile business, the Company competes with both
large national writers and smaller regional companies. The Company's competitors
include other companies which, like the Company, serve the independent agency
market, as well as companies which sell insurance directly to customers. Direct
writers may have certain competitive advantages over agency writers, including
increased name recognition, loyalty of the customer base to the insurer rather
than an independent agency and, potentially, reduced acquisition costs. In
addition, certain competitors of the Company have from time to time decreased
their prices in an apparent attempt to gain market share. Also, in certain
states, state assigned risk plans may provide nonstandard automobile insurance
products at a lower price than private insurers.

In the crop insurance business, the Company competes against other crop
insurance companies. In addition, the crop insurance industry has become
increasingly consolidated. From the 1985 crop year to the 1995 crop year, the
number of insurance companies that have entered into agreements with the FCIC to
sell and service MPCI policies has declined from 50 to 17. The Company believes
that to compete successfully in the crop insurance business it will have to
market and service a volume of premiums sufficiently large to enable the Company
to continue to realize operating efficiencies in conducting its business. No
assurance can be given that the Company will be able to compete successfully if
this market consolidates further.

Importance of Ratings

A.M. Best has currently assigned Superior a B+ (Very Good) rating and Pafco
a B- (Adequate) rating. A "B+" and a "B-" rating are A.M. Best's sixth and
eighth highest rating classifications, respectively, out of 15 ratings. A "B+"
rating is awarded to insurers which, in A.M. Best's opinion, "have demonstrated
very good overall performance when compared to the standards established by the
A.M. Best Company" and "have a good ability to meet their obligations to
policyholders over a long period of time." A "B-" rating is awarded to insurers
which, in A.M. Best's opinion, "have demonstrated adequate overall performance
when compared to the standards established by the A.M. Best Company" and
"generally have an adequate ability to meet their obligations to policyholders,
but their financial strength is vulnerable to unfavorable changes in
underwriting or economic conditions." IGF is currently not assigned a rating by
A.M. Best. A.M. Best bases its ratings on factors that concern policyholders and
agents and not upon factors concerning investor protection. Such ratings are
subject to change and are not recommendations to buy, sell or hold securities.
One factor in an insurer's ability to compete effectively is its A.M. Best
rating. The A.M. Best ratings for the Company's rated Insurers are lower than
for many of the Company's competitors. There can be no assurance that such
ratings or future changes therein will not affect the Company's competitive
position.

Geographic Concentration

The Company's nonstandard automobile insurance business is concentrated in
the states of Florida, California, Texas, Indiana, Missouri and Virginia;
consequently the Company will be significantly affected by changes in the
regulatory and business climate in those states. The

<PAGE>

Company's crop insurance business is concentrated in the states of Iowa, Texas,
Illinois, Kansas, Montana and Minnesota and the Company will be significantly
affected by weather conditions, natural perils and other factors affecting the
crop insurance business in those states.

Future Growth and Continued Operations Dependent on Access to Capital

Property and casualty insurance is a capital intensive business. The
Company must maintain minimum levels of surplus in the Insurers in order to
continue to write business, meet the other related standards established by
insurance regulatory authorities and insurance rating bureaus and satisfy
financial ratio covenants in loan agreements.

Historically, the Company has achieved premium growth as a result of both
acquisitions and internal growth. It intends to continue to pursue acquisition
and new internal growth opportunities. Among the factors which may restrict the
Company's future growth is the availability of capital. Such capital will likely
have to be obtained through debt or equity financing or retained earnings. There
can be no assurance that the Insurers will have access to sufficient capital to
support future growth and also satisfy the capital requirements of rating
agencies, creditors and regulators. In addition, the Company will require
additional capital to finance future acquisitions.

Uncertainty Associated with Estimating Reserves for Unpaid Losses and LAE

The reserves for unpaid losses and LAE established by the Company are
estimates of amounts needed to pay reported and unreported claims and related
LAE based on facts and circumstances then known. These reserves are based on
estimates of trends in claims severing judicial theories of liability and other
factors.

Although the nature of the Company's insurance business is primarily
short-tail, the establishment of adequate reserves is an inherently uncertain
process, and there can be no assurance that the ultimate liability will not
materially exceed the Company's reserves for losses and LAE and have a material
adverse effect on the Company's results of operations and financial condition.
Due to the inherent uncertainty of estimating these amounts, it has been
necessary, and may over time continue to be necessary, to revise estimates of
the Company's reserves for losses and LAE. The historic development of reserves
for losses and LAE may not necessarily reflect future trends in the development
of these amounts. Accordingly, it may not be appropriate to extrapolate
redundancies or deficiencies based on historical information.

Reliance Upon Reinsurance

In order to reduce risk and to increase its underwriting capacity, the
Company purchases reinsurance. Reinsurance does not relieve the Company of
liability to its insureds for the risks ceded to reinsurers. As such, the
Company is subject to credit risk with respect to amounts not recoverable from
reinsurers. Although the Company places its reinsurance with reinsurers,
including the FCIC, which the Company generally believes to be financially
stable, a significant

<PAGE>

reinsurer's insolvency or inability to make payments under the terms of a
reinsurance treaty could have a material adverse effect on the Company's
financial condition or results of operations.

The amount and cost of reinsurance available to companies specializing in
property and casualty insurance are subject, in large part, to prevailing market
conditions beyond the control of such companies. The Company's ability to
provide insurance at competitive premium rates and coverage limits on a
continuing basis depends upon its ability to obtain adequate reinsurance in
amounts and at rates that will not adversely affect its competitive position.

Due to continuing market uncertainties regarding reinsurance capacity, no
assurances can be given as to the Company's ability to maintain its current
reinsurance facilities, which generally are subject to annual renewal. If the
Company is unable to renew such facilities upon their expiration, the Company
may need to reduce the levels of its underwriting commitments.

Risks Associated with Investments

The Company's results of operations depend in part on the performance of
its invested assets. Certain risks are inherent in connection with fixed
maturity securities including loss upon default and price volatility in reaction
to changes in interest rates and general market factors. Equity securities
involve risks arising from the financial performance of, or other developments
affecting, particular issuers as well as price volatility arising from general
stock market conditions.

Comprehensive State Regulation

The Insurers are subject to comprehensive regulation by government agencies
in the states in which they operate. The nature and extent of that regulation
vary from jurisdiction to jurisdiction, but typically involve prior approval of
the acquisition of control of an insurance company or of any company controlling
an insurance company, regulation of certain transactions entered into by an
insurance company with any of its affiliates, limitations on dividends, approval
or filing of premium rates and policy forms for many lines of insurance,
solvency standards, minimum amounts of capital and surplus which must be
maintained, limitations on types and amounts of investments, restrictions on the
size of risks which may be insured by a single company, limitation of the right
to cancel or non- renew policies in some lines, regulation of the right to
withdraw from markets or agencies, requirements to participate in residual
markets, licensing of insurers and agents, deposits of securities for the
benefit of policyholders, reporting with respect to financial condition, and
other matters. In addition, state insurance department examiners perform
periodic financial and market conduct examinations of insurance companies. Such
regulation is generally intended for the protection of policyholders rather than
security holders. No assurance can be given that future legislative or
regulatory changes will not adversely affect the Company.

<PAGE>

Holding Company Structure; Dividend And Other Restrictions; Management Fees

Holding Company Structure; Dividend and Other Restrictions. Each of the
Company and SIG is a holding company whose principal asset is the capital stock
of its subsidiaries. Since SIG currently intends to retain earnings to finance
the growth and development of its business and does not anticipate paying cash
dividends on its Common Stock in the near future, the Company will have to rely
on dividends and other payments from Granite Re, SIGF and Granite Insurance to
meet its obligations to creditors and pay corporate expenses. SIG relies
primarily on dividends and other payments from its Subsidiaries, including the
Insurers, to meet its obligations to creditors and to pay corporate expenses.
The Insurers are domiciled in the states of Indiana and Florida and each of
these states limits the payment of dividends and other distributions by
insurance companies. Under these laws, the maximum aggregate amounts of
dividends permitted to be paid in 1997 by IGF and Pafco without prior regulatory
approval is $12,122,000 and $561,000, respectively, none of which has been paid.
In the consent order approving the Acquisition (the "Consent Order"), the
Florida Department has prohibited Superior from paying any dividends (whether
extraordinary or not) for four years from the date of Acquisition without the
prior written approval of the Florida Department. Further, state insurance laws
and regulations require that the statutory surplus of an insurance company
following any dividend or distribution by such company be reasonable in relation
to its outstanding liabilities and adequate for its financial needs.

Payment of dividends by IGF requires prior approval by the lender under the
revolving credit agreement to which IGF is a party. There can be no assurance
that IGF will be able to obtain this consent.

Management Fees. The management agreement originally entered into between
SIG and Pafco was assigned as of April 30, 1996 by SIG to GGS Management, Inc.,
a wholly-owned subsidiary of GGS Holdings ("GGS Management"). This agreement
provides for an annual management fee equal to 15% of gross premiums written. A
similar management agreement with a management fee of 17% of gross premiums
written has been entered into between GGS Management and Superior. Employees of
SIG relating to the nonstandard automobile insurance business and all Superior
employees became employees of GGS Management effective April 30, 1996. In the
Consent Order approving the Acquisition, the Florida Department has reserved,
for a period of three years, the right to reevaluate the reasonableness of fees
provided for in the Superior management agreement at the end of each calendar
year and to require Superior to make adjustments in the management fees based on
the Florida Department's consideration of the performance and operating
percentages of Superior and other pertinent data. There can be no assurance that
either the Indiana Department or the Florida Department will not in the future
require a reduction in these management fees.

Control by Existing Shareholders

G. Gordon Symons, Chairman of the Board of the Company and SIG and the
father of Alan G. Symons, President and Chief Executive

<PAGE>

Officer of the Company and Chief Executive Officer of SIG and Douglas H. Symons,
Vice President and Chief Operating Officer of the Company and President and
Chief Operating Officer of SIG, and members of the Symons family beneficially
own in the aggregate 54.4% of the outstanding Common Shares. Accordingly, since
G. Gordon Symons and members of his family have the ability to elect the Board
of Directors of the Company, they have the ability to effectively control all of
the Company's policy decisions. Third parties will not be able to obtain control
of the Company through purchases of Common Shares not owned by G. Gordon Symons
and his family.

Potential Limitations on Ability to Raise Additional Capital

The Company's failure to maintain ownership of at least 50% of SIG's voting
securities will expose the Company to a risk that it will be characterized as an
investment company within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act"), unless the Company's remaining voting securities of
SIG, together with any other investment securities, represent not more than 40%
of the total assets of the Company on an unconsolidated basis. In such event,
the Company would be required to comply with the registration and other
requirements of the 1940 Act, which would be significantly burdensome for the
Company. This constraint makes it unlikely that the Company would approve a
stock issuance by SIG that reduces the Company's ownership below 50% and
therefore would likely limit the amount of additional capital which can be
raised by SIG through the issuance of voting securities. Among other
consequences, such a limit could affect SIG's ability to raise funds for
acquisition opportunities which may become available to SIG or to GGS Holdings.

Conflicts of Interest

Conflicts of interest between the Company and SIG could arise with respect
to business dealings between them, including potential acquisitions of
businesses or properties, the issuance of additional securities, the election of
new or additional directors and the payment of dividends by the Company. Of the
seven directors of the Company, five are current directors of SIG (three of whom
are members of the Symons family). The Company has not instituted any formal
plan or arrangement to address potential conflicts of interest that may arise
between the Company and SIG.

Conflicts of interest similar to those which could arise between the
Company and SIG could also arise between each of the Company, SIG and GGS
Holdings. Alan G. Symons, President and Chief Executive Officer of the Company
and Chief Executive Officer of SIG, and Douglas H. Symons, Vice President and
Chief Operating Officer of the Company and President and Chief Operating Officer
of SIG, also serve as the Chief Executive Officer and President, and Executive
Vice President, respectively, of GGS Holdings. Such individuals have entered
into employment agreements with GGS Holdings requiring them to devote
substantially all of their working time and attention to the business and
affairs of GGS Holdings. Further, Alan G. Symons and certain other members of
management of the Company are entitled, under certain circumstances, to receive
options to purchase shares of common stock of GGS Holdings. In addition, in the
event that SIG does not continue to own at least 50% of the outstanding voting

<PAGE>

securities of GGS Holdings and the voting securities of GGS Holdings owned by
SIG, together with any other investment securities, represent over 40% of the
total assets of SIG on an unconsolidated basis, SIG will be exposed to a risk
that it would be characterized as an investment company within the meaning of
the 1940 Act. This consideration will limit the amount of additional capital
which can be raised through the issuance by GGS Holdings of its voting
securities.

Dependence on Key Personnel in Connection with Future Success

The future success of the Company depends significantly upon the efforts of
certain key management personnel including G. Gordon Symons, Chairman of the
Board of the Company, Alan G. Symons, President and Chief Executive Officer of
the Company, Douglas H. Symons, Vice President and Chief Operating Officer of
the Company and President and Chief Executive Officer of Pafco, Dennis G.
Daggett, President and Chief Operating Officer of IGF, and Roger C. Sullivan,
Jr., Executive Vice President of Superior. A loss of any of these officers could
adversely affect the Company's business.

Possible Liabilities Relating to Transactions

Prior to the Offering, the Company entered into a number of transactions,
including the Acquisition and certain other related transactions (collectively,
the "Transactions"). The application of the tax laws to the factual
circumstances relating to certain aspects of the Transactions is uncertain. The
Company cannot predict with certainty whether or when any such liabilities might
arise. Accordingly, the Company's results of operations in one or more future
periods could be materially adversely affected by liabilities related to the
Transactions. The Company has agreed to indemnify SIG against any of the
foregoing liabilities.

Trading of SIG Common Stock

The market price of the Common Shares may be significantly affected by
trading in the shares of Common Stock of SIG on the Nasdaq National Market since
SIG currently constitutes a substantial majority of the consolidated total
assets of the Company and contributes a substantial majority of the consolidated
net income of the Company. In addition, factors such as quarterly variations in
the Company's financial results, announcements by the Company, SIG or others and
developments affecting the Company or SIG could cause the market price of the
Common Shares to fluctuate, significantly.

Shares Eligible For Future Sale

Sales of substantial amounts of Common Shares in the public market could
adversely affect prevailing market prices for the Common Shares and may also
affect the Company's future ability to raise additional capital in the equity
markets at a time and a price favorable to the Company.

<PAGE>

USE OF PROCEEDS

The Company will not receive any proceeds from the offer and sale of Common
Shares by selling security holders pursuant to this Prospectus.

DETERMINATION OF OFFERING PRICE

Common Shares offered pursuant to this Prospectus will be sold by certain
affiliates of the Company as determined by them in their discretion.

SELLING SECURITY HOLDERS; PLAN OF DISTRIBUTION

The Common Shares offered pursuant to this Prospectus are being sold by
certain affiliates of the Company or through underwriters or agents. The shares
may be sold from time to time by the selling shareholders, or by pledgees,
donees, transferees or other successors in interest. Such sales may be made on
one or more exchanges or in the over-the-counter market, or otherwise at prices
and at terms then prevailing or at prices related to the then current market
price, or in negotiated transactions. The shares may be sold by one or more of
the following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; (c) an exchange distribution in accordance with the rules of
such exchange; and (d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. In effecting sales, brokers or dealers engaged
by the selling shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers may receive compensation in the form of
commissions, discounts or concessions from selling shareholders and/or the
purchasers of the Common Shares. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the 1933 Act in connection with such sales. In addition, any
securities covered by this Prospectus which qualify for sale pursuant to Rule
144 may be sold under Rule 144 other than pursuant to this Prospectus.

Upon the Company being notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplemented prospectus will
be filed, if required, pursuant to Rule 424(c) under the 1933 Act, disclosing
(i) the name of each such selling shareholder and of the participating
broker-dealer(s), (ii) the number of shares involved, (iii) the price at which
such shares were sold, (iv) the commissions paid or discounts or concessions
allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus and (vi) other facts
material to the transaction.

Under applicable rules and regulations under the 1934 Act, any person
engaged in the distribution of the Common Shares offered hereby may not
simultaneously engage in market

<PAGE>

making activities with respect to the Common
Shares. In addition, and without limiting the foregoing, each Selling
Shareholder will be subject to applicable provisions of the 1934 Act and the
rules and regulations thereunder, including, without limitation, Rule 10b-5,
which provisions may limit the timing of purchases and sales of the Common
Shares by the Selling Shareholder.

The Company is permitted to suspend the use of this Prospectus in
connection with sales of the Common Shares by holders during certain periods of
time under certain circumstances relating to pending corporate developments and
public filings with the Commission and similar events. Expenses of preparing and
filing the registration statement and all post-effective amendments will be
borne by the Company. The Common Shares being offered hereby are being offered
by the shareholders of the Company listed in the following table:

<TABLE>

Ownership Prior
to the Offering Ownership After Offering
--------------- ------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C>

Shares to be
Selling Shareholder Number(1) Percentage(1) Sold In Offering Number(1) Percentage(1)
- ------------------- --------- ------------- ---------------- --------- -------------

Vantage Investment 2,485,045 40.6 200,000(2) 2,285,045 37.3%
Trust,
U/A March 15, 1993(2)
</TABLE>

(1) Includes 283,121 shares subject to currently exercisable stock options held
by G. Gordon Symons. Also includes 1,646,413 shares held by Symons International
Group Ltd., of which Mr. Symons is the controlling shareholder. These amounts do
not reflect 544,177 shares (including 94,994 shares subject to stock options)
held by Alan G. Symons, or 301,988 shares (including 104,505 shares subject to
stock options) held by Douglas H. Symons. The shares (inclusive of those subject
to stock options) held by Alan G. Symons and Douglas H. Symons represent, in the
aggregate, 13.8% of the outstanding shares of the Company. Alan G. Symons and
Douglas H. Symons are sons of G. Gordon Symons. Assuming the entire 200,000
shares are sold in the offering, the aggregate number of shares held by G.
Gordon Symons (directly or indirectly), Alan G. Symons and Douglas H. Symons
would comprise 51.1% of the outstanding shares of the Company.

(2) All of the shares (excluding shares subject to stock options) are held by
Geraldco Investment Management Limited ("Geraldco") in its capacity as trustee
of this trust, known as the Vantage Investment Trust, established under an
agreement dated March 15, 1993 between G. Gordon Symons, as settlor, and
Geraldco, as trustee. G. Gordon Symons, Chairman of the Board of the Company and
SIG, is income and principal beneficiary of this trust.

<PAGE>

LEGAL MATTERS

The valid issuance of the Common Shares offered hereby and certain other
legal matters will be passed upon for the Company by Smith Lyons, Toronto,
Canada.

EXPERTS

The consolidated balance sheets of the Company, as of December 31, 1996 and
1995 and the related consolidated statements of operations, deficits and changes
in cash resources and cash flows for each of the years in the three-year period
ended December 31, 1996, have been examined by Schwartz Levitsky Feldman,
independent chartered accountants. Such financial statements have been
incorporated by reference herein and in the Registration Statement in reliance
upon the reports with respect thereto of Schwartz Levitsky Feldman and upon the
authority of said firm as experts in accounting and auditing.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents are hereby incorporated by reference into this
Prospectus:

(1) Amendment No. 1 to the annual report on Form 10-K of the Company
for the fiscal year ended December 31, 1996;

(2) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997 and June 30, 1997;

(3) All other reports filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "1934 Act") by the Company
since December 31, 1996; and

(4) The description of the capital stock of the Company contained in
the Company's Registration Statement on Form 20-F, which was
filed with the Commission on June 21, 1994, and all amendments of
reports filed for the purpose of updating such description.

All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14, and 15(d) of the 1934 Act prior to the
termination of the offering, shall be deemed to be incorporated by reference
into this Prospectus.

<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

Registration Fee ..................................... $ 2,303
Legal Fees and Expenses............................... $10,000
-------
Total ....................................... $12,303
=======

All expenses will be borne by the Company.

Item 15. Indemnification of Directors and Officers.

Subject to the limitations of the Canadian Business Corporations Act (the
"Act") with respect to indemnities in respect to derivative actions, under its
Bylaws, the Company shall indemnify a present or former director or officer of
the Company or a person who acts or acted at the Company's request as a director
or officer of another corporation of which the Company is or was a shareholder
or creditor, and his heirs and legal representatives, against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a fine or
judgment, reasonably incurred by him in respect of or in connection with any
civil, criminal or administrative action, proceeding or investigation to which
he is, or may be made, a party by reason of being or having been such a director
or officer and provided that the director or officer acted honestly and in good
faith with a view to the best interests of the Company and, in the case of a
criminal or administrative action or proceeding that is enforced by a monetary
penalty, had reasonable grounds for believing that his conduct was lawful. The
indemnification provisions of the Bylaws effectively provide for indemnification
to the maximum extent permitted by the Act and generally provide that the
Company will provide indemnification in every circumstance where the Act so
permits or requires. The Company also carries director and officer liability
insurance coverage.

Item 16. Exhibits.

The exhibits furnished with the Registration Statement are listed on Page
E-1.

Item 17. Undertakings.

(a) The undersigned Registrant hereby undertakes (1) 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 1933 Act; (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; (iii) to include any material information with respect
to the plan of distribution not previously

S-1

<PAGE>

disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that clauses
(a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included
in a post-effective amendment by those clauses is contained in periodic reports
filed by the Registrant pursuant to Section 13 or 15(d) of the 1934 Act that are
incorporated by reference in the Registration Statement; (2) that, for the
purpose of determining any liability under the 1933 Act, 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; and
(3) 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.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act 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.

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

S-2

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Toronto, and the Province of Ontario, Canada, on this
_____ day of ,1997.

GORAN CAPITAL INC.

By: /s/ Alan G. Symons
----------------------------------------------
Alan G. Symons
President and Chief Executive Officer

Each person whose signature appears below hereby severally constitutes and
appoints Alan G. Symons, Douglas H. Symons and David L. Bates and each of them,
as attorney-in-fact for the undersigned, in any and all capacities, with full
power of substitution, to sign any amendments to this Registration Statement
(including post- effective amendments) and any subsequent registration statement
filed by the Registrant pursuant to Rule 462(b) of the Securities Act of 1933,
and to file the same with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that each said attorney-in-fact, or
any of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.

Signature Title Date

(1) Principal Executive Officer:

/s/ Alan G. Symons
- ----------------------------- September 24, 1997
Alan G. Symons President and Chief
Executive Officer

(2) Principal Financial and
Accounting Officer:

/s/ Gary P. Hutchcraft
- ----------------------------- September 24, 1997
Gary P. Hutchcraft Vice President and
Chief Financial Officer
and Treasurer

S-3

<PAGE>

(3) The Board of Directors:

/s/ G. Gordon Symons
- ----------------------------
G. Gordon Symons Director September 24, 1997

/s/ Alan G. Symons
- ----------------------------
Alan G. Symons Director September 24, 1997

/s/ Douglas H. Symons
- ----------------------------
Douglas H. Symons Director September 24, 1997

- ----------------------------
John J. McKeating Director , 1997

/s/ James G. Torrance
- ----------------------------
James G. Torrance Director September 23, 1997

/s/ Ross Schofield
- ----------------------------
Ross Schofield Director September 23, 1997

/s/ David B. Shapira
- ----------------------------
David B. Shapira Director September 24, 1997

S-4
<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description

5 Opinion of Smith Lyons as to the legality of the
securities being registered

23.1 Consent of Schwartz Levitsky Feldman

23.2 Consent of Smith Lyons (included as part of Exhibit 5)

23.3 Consent of Coopers & Lybrand L.L.P.

24 Power of Attorney (included on page S-3 of the Registration
Statement)

E-1

Exhibit 5

Smith Lyons Letterhead

September 25, 1997

The Board of Direcotrs
Goran Capital Inc.
181 University Avenue
Suite 1101 - Box 11
Toronto, Notario
Canada M5H 3M7

Gentlemen:

You have requested our opinion in connection with the Form F-3 Registration
Statement (the "Registration Statement") to be filed by Goran Capital Inc., a
federal Canadian corporation (the "Corporation"), with the Securities and
Exchange Commission in the United States of America with respect to the offer
and sale by Geraldco Investment Management Limited ("Geraldco") of up to 200,000
common shares of the Corporation (the "Shares"). We understand that Geraldco
holds the Shares pursuant to a trust, known as the Vantage Investment Trust,
established under an agreement dated as of March 15, 1993 between G. Gordon
Symons, as settlor, ("Gordon Symons") and Geraldco, as trustee.

In providing the opinion set out below, we have relied upon the certificate
of Gordon Symons (the "Certificate"), a copy of which is annexed hereto, with
regard to the facts set out therein.

In addition, in providing the opinion set out below, we have examined
originals of such corporate records of the Corporation as we have considered
necessary for the purposes of this opinion.

For the purposes of this opinion we have assumed, with respect to all
documents examined by us, the genuineness of all signatures, the legal capacity
at all relevant times of any natural person signing any such documents, the
authenticity and completeness of all documents submitted to us as originals and
the truthfulness and accuracy of the corporate records of the Corporation.

Based upon and subject to the foregoing and the qualifications and
limitations hereinafter set forth, we are of the opinion that the Shares have
been validly issued and are outstanding as fully paid and non-assessable shares
in the capital of the Corporation.

<PAGE>

SMITH LYONS

Page 2

The foregoing opinion is limited to the application of the federal law of
Canada and no opinion is expressed herein as to any matter governed by the laws
of any other jurisdiction.

This opinion is rendered solely for use by the addressees hereof in
connection with the filing of the Registration Statement and may not be relied
upon by any other person or used or relied upon for any other purpose without
our prior written consent.

We hereby consent to the use of our name under the caption "Legal Matters"
in the Prospectus in the Registration Statement and to the filing of this
opinion as Exhibit 5 to the Registration Statement

Yours very truly,

/s/ Smith Lyons

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

TO: SMITH LYONS

This certificate is being provided to you in connection with an opinion to
be delivered to the board of directors of Goran Capital Inc. ("Goran") in
connection with the Form F-3 Registration Statement to be filed by Goran with
the Securities and Exchange Commission in the United States of America with
respect to the potential offer and sale by Geraldco Investment Management
Limited ("Geraldco") of up to 200,000 common shares of Goran (the "Shares").

I, G. Gordon Symons, of Fairy Lands, Pembroke, Bermuda, hereby certify as
follows:

1. I am the duly elected Chairman of the Board of Goran and have been a
director and officer of Goran (under its current name or its prior name, Pafco
Financial Holdings Limited) since at least as early as June 4, 1986.

2. I was the settlor, and Geraldco was and currently is the sole trustee,
pursuant to a trust agreement dated as of March 15, 1993 ("Trust Agreement").
The trust established pursuant to the Trust Agreement is called Vantage
Investment Trust (the "Trust"). Geraldco is currently the registered holder of
more than 200,000 common shares in the capital of Goran and it holds such shares
in trust pursuant to the Trust Agreement.

3. On May 10, 1993 Geraldco, in its capacity as trustee of the Trust (the
"Trustee"), purchased from SIG Management (Bermuda) Ltd. ("SIG Bermuda") 205,511
common shares of Goran pursuant to a share put/call agreement between SIG
Bermuda and Geraldco dated as of March 19, 1993 (the "Share Put/Call
Agreement").

4. Pursuant to the Share Put.Call Agreement, the Trustee subsequently
purchased an additional 567,156 common shares of Goran from SIG Bermuda.

5. The common shares of Goran sold by SIG Bermuda to the Trustee were
transferred to SIG Bermuda by Symons International Group Ltd. ("SIG Ltd.") and
such shares were among a total of 2,399,000 common shares issued by Goran to SIG
Ltd. on June 4, 1986.

6. The Shares are included among the common shares of Goran acquired by the
Trustee from SIG Bermuda as described above.

7. The consideration payable in respect of the issuance of each Share was
fully paid for in money.

DATED at Toronto this 19th day of September, 1997.

/s/ Gloria Lukanchoff /s/ G. Gordon Symons
- --------------------- --------------------
Witness G. Gordon Symons

Exhibit 23.1

(Schwartz Levitsky Feldman letterhead)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form F-3 of (i) our report which appears in Goran Capital Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1996; and (ii) our
report which appears in Goran Capital Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1995.

/s/ Schwartz Levitsky Feldman

Schwartz Levitsky Feldman
Chartered Accountants
Toronto, Ontario, Canada
September 16, 1997

Exhibit 23.2

The consent of Smith Lyons is included as part of Exhibit 5.

Exhibit 23.3

(Coopers & Lybrand letterhead)

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement of
Goran Capital, Inc. on Form F-3 (File No. 000-0000) of our report dated June 14,
1996, on our audits of the consolidated financial statements of Superiod
Insurance Company and Subsidiaries as of December 31, 1997 and 1994 and for the
years ended December 31, 1995, 1994, and 1993, which report is included in Form
8-K dated May 15, 1996, as amended by Forms 8-K/A dated July 16, 1996, August 1,
1996 and April 4, 1997.

/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.

Atlanta, Georgia
September 25, 1997

Exhibit 24

The Power of Attorney is included on page S-3 of the Registration
Statement.