EXHIBIT 10.26


                               AMENDMENT NO. 3 TO

                          INVESTMENT ADVISORY AGREEMENT


        This Amendment to the January 1, 1987 Investment  Advisory  Agreement as
amended  effective  January 1, 1987 and November 1, 1989, by and between PHOENIX
INVESTMENT COUNSEL,  INC., a Massachusetts  corporation (the "Adviser") and PXRE
REINSURANCE COMPANY, a Connecticut corporation (the "Client") (the "Agreement"),
is hereby effective as of the 1st day of June, 1995.

1.      Section 3 of the Agreement is hereby amended and restated as follows:

        In consideration of the services performed  hereunder,  the Client shall
        pay the Adviser an annual fee in 1995 equal to  $200,000.  Beginning  on
        January 1, 1996,  the Client shall pay a fee to the Adviser  equal to an
        annual rate of 0.15% of the average  net assets of the  Portfolio.  Such
        fees shall be paid in quarterly  installments,  each due within  fifteen
        (15) days of the last day of the  calendar  quarter.  In  addition,  the
        Client  shall  reimburse  the  Advisor  for any  and  all  out-of-pocket
        expenses incurred in managing the Portfolio  including,  but not limited
        to,  custodian  fees,  clearing agent fees,  brokerage  costs and sales,
        service or similar taxes, if any.

2.      Any sums heretofore paid for services  rendered in 1995 shall be applied
        to the sum owed under Section 3 of the Agreement as revised herein.

        IN WITNESS  WHEREOF,  the parties hereto have duly caused this Amendment
No. 3 to the  Investment  Advisory  Agreement to be executed on this 25th day of
July, 1995.


PHOENIX INVESTMENT COUNSEL, INC.           PXRE REINSURANCE COMPANY



By:  /s/ Michael Haylon                    By:   /s/ Sanford M. Kimmel
    ------------------------------             ---------------------------
Its: President                             Its: Senior Vice President, Treasurer
                                                  & Chief Financial Officer