ADDENDUM NO. 3

                                     TO THE

                    PXRE GROUP AMENDED AND RESTATED AGREEMENT
                        CONCERNING FILING OF CONSOLIDATED
                           FEDERAL INCOME TAX RETURNS

                                     BETWEEN

                            PXRE CORPORATION ("PXRE")

                                       AND

               TRANSNATIONAL REINSURANCE COMPANY ("Transnational")



               WHEREAS,  Transnational  is a  wholly-owned  subsidiary  of  PXRE
Reinsurance   Company   ("Reinsurance"),   and  Reinsurance  is  a  wholly-owned
subsidiary of PXRE; and

               WHEREAS,  Transnational  is,  therefore,  a  member  of the  PXRE
affiliated group of corporations filing consolidated  federal income tax returns
(the "PXRE Group") and has, by this Addendum No. 3 dated as of December 11, 1996
become a participant  in the Amended and Restated  Agreement  dated as of August
23, 1993 between PXRE and Reinsurance  establishing  the terms pursuant to which
the PXRE Group files its consolidated federal income tax returns, and

               NOW, THEREFORE, it is hereby agreed that Transnational shall be a
participant in the PXRE Group Amended and Restated  Agreement  Concerning Filing
of Consolidated  Federal Income Tax Returns dated as of August 23, 1993 to which
this Addendum is annexed.

                                      PXRE CORPORATION


                                      By: /s/ Gerald L. Radke
                                         --------------------------------
                                      Name:  Gerald L. Radke
                                      Title: Chairman of the Board, President
                                             and Chief Executive Officer


                                      TRANSNATIONAL REINSURANCE COMPANY


                                      By: /s/ Gerald L. Radke
                                         --------------------------------
                                      Name:  Gerald L. Radke
                                      Title: Chairman of the Board, President
                                             and Chief Executive Officer