EXHIBIT 10.01

GENERAL RE - NEW ENGLAND ASSET MANAGEMENT, INC.

Investment Management Agreement

This Agreement is made as of the 8th day of April, 2002, between

1. GENERAL RE - NEW ENGLAND ASSET MANAGEMENT, INC., a corporation organized
under the laws of the State of Delaware ("Manager"); and

2. PXRE RE1NSURANCE COMPANY, a corporation organized under the laws of the State
of Connecticut (the "Client").

WHEREAS, Client desires to appoint Manager as the investment manager of
that portion of Client's assets constituting the Account (as defined below) for
fees agreed upon in Schedule A. III.;

NOW THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:

Section 1. The Account

The cash, securities and other assets placed by Client in the account
to be managed under this Agreement (the "Account") are listed on Section l.A. of
Schedule A. Assets may be added to the Account at any time. Client will provide
notification to the Manager of any such additions. The Account will include
these assets and any changes in them resulting from transactions directed by
Manager, withdrawals and additions made by Client, or dividends, interest, stock
splits and other earnings, gains or losses on the assets.

Assets of the Client that are not to be managed by Manager are
separately identified on Schedule A ("Unmanaged Assets"). Manager may include
these assets in its periodic reports to Client, but will exclude their value
when calculating Manager's asset management fees.

Section 2. Management of the Account

Manager will make all investment decisions for the Account, in
Manager's sole discretion and without first consulting or notifying Client,
subject to and in accordance with the investment restrictions and guidelines
which are attached as Schedule B (the "Investment Guidelines"). If Manager
manages only a portion of Client's portfolio, unless otherwise specified by
Client in writing, Investment Guidelines' restrictions relate specifically to
the assets managed by Manager. Client may change these Investment Guidelines at
any time, but Manager will be bound by the changes only after it has received
and agreed to them in writing. Other than by the Investment Guidelines, the
insurance laws and regulations of the State of Connecticut (the "Insurance
Laws"), and the terms of this Agreement, the investments made by Manager on
behalf of the Client will not be restricted in any manner.

Subject to the Investment Guidelines and the Insurance Laws, Manager
will have full power and authority, on behalf of Client, to instruct any
brokers, dealers or banks to buy, sell, exchange, convert or otherwise trade in
all securities, futures or other investments for the Account.

Manager will not be responsible for giving Client investment advice or
taking any other action with respect to Unmanaged Assets.

Client appoints Manager as the true and lawful attorney of the Client
for and in the name, place and stead of Client, in Manager's unrestricted
discretion, to operate and conduct the brokerage accounts of the Client relating
to the Account and to do and perform all and every act and thing whatsoever
requisite in furtherance of this Agreement, including the execution of all
writings related to the purchase or sale, assignments, transfers and ownership
of any stocks, bonds, commodities, or other securities. Manager is hereby fully
authorized to act and rely on the authority vested pursuant to said power of
attorney.

Effective as of January 1, 2002, and until further notice, Manager will
provide the investment accounting services for Client as set forth in Schedule
E, and will assist Client in preparing Client's statutory Schedule D, if
applicable. Client acknowledges that Manager will provide accounting data
according to Manager's standard interpretation of accounting principles, unless
expressly instructed otherwise by Client's prior written notice.

Section 3. Transactions for the Account

Manager will arrange for securities transactions for the Account to be
executed through those brokers, dealers or banks that Manager reasonably
believes will provide best execution. In choosing a broker, dealer or bank,
Manager will consider the broker, dealer or bank's execution capability,
reputation and access to the markets for the securities being traded for the
Account. Manager will seek competitive commission rates, but not necessarily the
lowest rates available.

Manager may also send transactions for the Account to brokers who
charge higher commissions than other brokers, provided that Manager determines
in good faith that the amount of commissions Manager pays is reasonable in
relation to the value of the brokerage and research services provided, viewed in
terms either of that particular transaction or Manager's overall
responsibilities with respect to all clients whose accounts Manager manages on a
discretionary basis.

Portfolio transactions for each client account generally are completed
independently. However, if Manager decides to purchase or sell the same
securities for Client and other clients at about the same time, Manager may
combine Client's order with those of other clients if Manager reasonably
believes that it will be able to negotiate better prices or lower commission
rates or transaction costs for the combined order than for Client's order alone.
Client will pay the average price and transaction costs obtained for such
combined orders. Manager generally will allocate securities purchased or sold as
part of a combined order to Client's Account and to accounts of other clients
according to the size of the order placed for each client.

If Manager cannot obtain execution for the total amount of the
securities in the combined orders, adjustments to the allocation will be made on
a random number generator methodology. However, Manager may increase or decrease
the amounts of securities allocated to each client if necessary to avoid having
odd or small numbers of shares held for the account of any client. Each client
that participates in a combined order will receive or pay the average share
price and/or transactions costs for all transactions executed as part of the
combined order.

If Client directs Manager to use particular brokers, dealers or banks
to execute transactions for the Account, Manager will do so, but Manager will
not seek better execution services or prices for Client from other brokers,
dealers or banks, and Client may pay higher prices or transaction costs as a
result. Manager also may not be able to seek better execution services for
Client by combining Client's orders with those of other clients.

Client may direct all transactions for the Account to a particular
broker, dealer or bank, by writing the name and address of that broker, dealer
or bank in the space provided on Schedule A.

Section 4. Transaction Confirmations

Manager will instruct the brokers, dealers or banks who execute
transactions for the Account to send Client all transaction confirmations,
unless Client chooses not to receive confirmations. If Client does not wish to
receive individual confirmations, this box should be checked. \X\

Client may elect to receive individual confirmations at any time by
giving Manager written notice.

Section 5. Custody of Account Assets

The assets in the Account will be held for Client by the custodian
named on Schedule A (the "Custodian"). Manager will not have custody of any
Account assets. Client will pay all fees of the Custodian.

Client will authorize the Custodian to follow Manager's instructions to
make and accept payments for, and to deliver or to receive, securities, cash or
other investments purchased, sold, redeemed, or exchanged for the Account.
Client also will instruct the Custodian to send Client and Manager monthly
statements showing the assets in and all transactions for the Account during the
month, including any payments of Manager's fees.

Client will provide Manager with a copy of its agreement with the
Custodian, and will give Manager reasonable advance notice of any change of
Custodian.

Section 6. Reports to Client

Manager will send Client monthly written reports showing the identity,
cost and current market value of the assets in the Account and each transaction
made for the Account during the period covered by the report, which reports
shall include the information set forth on Schedule E hereto and such other
information as Client may reasonably request from time to time. The Account's
performance will be sent monthly, quarterly or annually upon Client request.

Section 7. Account Valuation

Manager will value the securities in the Account using independent
pricing sources. All securities in the Account that are listed and traded on a
national securities exchange or on NASDAQ shall be valued on the valuation date
at the closing price on the principal market where the securities are traded.
All other securities shall be valued in accordance with any reasonable valuation
method selected by Manager, consistent with industry accepted practices. While
GR-NEAM does its best to obtain representative market prices for all securities
in the Account, such prices do not always reflect the price actually received or
paid on the open market.

Section 8. Manager's Fees

For Manager's services, Client will pay a percentage of the value, as
determined under Section 7 of this Agreement, of all assets in the Account
(excluding Unmanaged Assets) as of the last trading day of each calendar month.
The fees are payable at the end of each calendar quarter for services provided
by Manager during the prior three months. The percentage amount of the fees is
shown on Schedule A. In any partial quarter, the fees will be reduced pro rata
based on the number of days the Account was managed.

Client agrees to pay Manager's fees as follows:

/ / The Custodian will deduct the fees from Client's Account and
pay them to Manager each quarter. Manager will send Client and
the Custodian at the same time a bill showing the amount of
Manager's fees, the Account value on which they were based and
how they were calculated. The Custodian will send Client a
monthly statement showing all amounts paid from the Account,
including Manager's fees.

/X/ Client will be billed directly by Manager and will pay
Manager's fees within 30 days of receiving the bill.

If Manager invests in securities issued by money market funds or other
investment companies for the Account, these securities will be included in the
value of the Account when Manager's fees are calculated. These same assets will
be subject to additional investment management and other fees that are paid by
the investment company but ultimately borne by its shareholders. These
additional fees are described in each investment company's prospectus.

Section 9. Proxy Voting

Proxies for securities in the Account should be voted as follows:

/ / Client directs Manager not to vote proxies for securities held for
the Account.

/X/ Client directs Manager to vote all proxies for securities held
for Client's Account in accordance with --

/X/ Manager's own discretion
or
/ / Client's proxy voting guidelines attached as Schedule C.

Client will direct Custodian to send promptly all proxies and related
shareholder communications to Manager and to identify them as relating to
Client's Account. Client understands that Manager will not be able to vote
proxies if they are not received on a timely basis from the Custodian as
properly identified as relating to Client's Account. Manager shall not be
responsible for voting proxies of foreign securities, and will forward them to
Client for completion.

These proxy voting instructions may be changed at any time by notifying
Manager in writing.

Section 10. Legal Proceedings

Manager will not advise or act for Client in any legal proceedings,
including bankruptcies or class actions, involving securities held in the
Account or issuers of those securities.

Section 11. Risk

Manager cannot guarantee the future performance of the Account, promise
any specific level of performance or promise that its investment decisions,
strategies or overall management of the Account will be successful. The
investment decisions Manager will make for Client are subject to various market,
currency, economic, political and business risks, and will not necessarily be
profitable.

Section 12. Standard of Care; Limitation of Liability

Except as may otherwise be provided by law, Manager will not be liable
to Client for any loss (i) that Client may suffer as a result of Manager's good
faith decisions or actions where Manager exercises the degree of care, skill,
prudence and diligence that a prudent person acting in a like fiduciary capacity
would use; (ii) caused by following Client's instructions; or (iii) caused by
the Custodian, any broker, dealer or bank to which Manager directs transactions
for the Account or any other person, except in the case of, and only to the
extent that, the negligence or willful misconduct of Manager contributed to the
loss.

Federal and state securities laws impose liabilities under certain
circumstances on persons who act in good faith, and this Agreement does not
waive or limit Client's rights under those laws.

Except as set forth above with respect to the Account, Manager will not
be responsible for Client's own compliance with the insurance investment laws of
Client's state of domicile Notwithstanding any other provision in this
Agreement, Manager shall not be responsible for Client's compliance with
applicable tax laws.

In managing the Account, Manager will not consider any other
securities, cash, or other investments or assets Client owns for diversification
or other purposes. Manager shall have no responsibility whatsoever for the
management of the Unmanaged Assets or any assets of Client other than the
Account and shall incur no liability for any loss or damage which may result
from the management of such other assets.

Section 13. Client Directions

The names and specimen signatures of each individual who is authorized
to give directions to Manager on Client's behalf under this Agreement are set
forth on Schedule D. Directions received by Manager from Client must be signed
by at least one such person. If Manager receives directions from Client which
are not signed by a person that Manager reasonably believes is authorized to do
so, Manager shall not be required to comply with such directions until it
verifies that the directions are properly authorized by Client.

Manager shall be fully protected in relying upon any direction signed
or given by a person that Manager reasonably believes is authorized to give such
directions on Client's behalf. Manager also shall be fully protected when acting
upon an instrument, certificate, or paper that Manager reasonably believes to be
genuine and to be signed or presented by any such person or persons. Manager
shall be under no duty to make any investigation or inquiry as to any statement
contained in any writing and may accept the same as conclusive evidence of truth
and accuracy of statements contained therein.

Section 14. Confidentiality

Except as Client and Manager otherwise agree or as may be required by
law, all information concerning the Account and services provided under this
Agreement shall be kept confidential.

Section 15. Non-Exclusive Agreement

Manager provides investment advice to other clients and may give them
advice or take actions for them, for Manager's own accounts or for accounts of
persons related to or employed by Manager, that is different from advice
provided to or actions taken for client.

Manager is not obligated to buy, sell or recommend for Client's Account
any security or other investment that Manager may buy, sell or recommend for
other clients or for the account of Manager or its related persons or employees.

If Manager obtains material, non-public information about a security or
its issuer that Manager may not lawfully use or disclose, Manager will have no
obligation to disclose the information to Client or to use it for Client's
benefit.

Section 16. Term of Agreement

Either Client or Manager may cancel this Agreement at any time upon 30
days written notice. This Agreement will remain in effect until terminated.
Termination of this Agreement will not affect (i) the validity of any action
that Manager or Client has previously taken; (ii) the liabilities or obligations
of Manager or Client for transactions started before termination; or (iii)
Client's obligation to pay Manager's fees through the date of termination. Upon
termination, Manager will have no obligation to recommend or take any action
with regard to the securities, cash or other assets in the Account.

Section 17. Agreement Not Assignable

This Agreement may not be assigned within the meaning of the Investment
Advisers Act of 1940 (the "Advisers Act") by Manager without Client's consent.

Section 18. Governing Law

The laws of the State of Connecticut will govern this Agreement.
However, nothing in this Agreement will be construed contrary to any provision
of the Advisers Act or the rules thereunder.

Section 19. Miscellaneous

If any provision of this Agreement is or becomes inconsistent with any
applicable law or rule, the provision will be deemed rescinded or modified to
the extent necessary to comply with such law or rule. In all other respects,
this Agreement will continue in full force and effect. This Agreement contains
the entire understanding between Manager and Client and may not be changed
except in writing signed by both parties. Failure to insist on strict compliance
with this Agreement or with any of its terms or any continued conduct will not
be considered a waiver by either party under this Agreement.

Section 20. Notices

All notices and instructions with respect to the Account or other matters
covered by this Agreement may be sent by U.S. mail express delivery services,
facsimile, e-mail or other electronic means to Client and to Manager at the
addresses at the end of this agreement or to another address provided in
writing.

Section 21. Representations of Client

Client represents and warrants to Manager that (a) Client is the
beneficial owner of all assets in the Account and except as specifically
identified by Client, there are no restrictions on transfer or sale of any of
those assets; (b) this Agreement has been duly authorized, executed, and
delivered by Client and is Client's valid and binding obligation; (c) the names
of the individuals who are authorized to act under this Agreement on behalf of
Client have been given to Manager in writing; (d) no government authorizations,
approvals, consents, or filings not already obtained are required in connection
with the execution, delivery, or performance of this Agreement by Client; and
(e) Client certifies that it is not an employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), nor a Person acting on behalf of any such plan. Client agrees to notify
Manager in writing within five (5) days after the occurrence of an event making
the above statement no longer accurate.

Client agrees to indemnify, defend and hold harmless Manager and its
officers, directors, agents, employees, shareholders, legal representatives,
successors and assigns, from and against any and all claims, actions, suits,
damages, costs, liabilities, judgments, losses, charges, costs and expenses,
including attorneys' fees, of Manager arising from any failure by Client to
accurately disclose its status under this Section or by reason of any defect in
Client's authority to appoint Manager under this Agreement.

Section 22. Representations of Manager

Manager represents and warrants that (i) this Agreement has been duly
authorized, executed and delivered by Manager and is its valid and binding
obligation, (ii) it is registered with the United States Securities Exchange
Commission ("SEC") as an investment advisor under the Advisors Act, and (iii)
that it has all other licenses and registrations necessary to perform its
obligations under this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Section 23. Form ADV

Client has received and reviewed a copy of Part II of Manager's Form ADV
and a copy of this Agreement.

Section 24. Independent Contractor

The relationship of Manager to Client is and shall remain during the term
of this Agreement that of independent contractor. Manager and Client are not
partners or joint venturers with each other under this Agreement, and nothing in
this Agreement shall be construed so as to make them partners or joint
venturers, or to impose any liability as such on either of them.

AGREED TO AND ACCEPTED BY:

GENERAL RE - NEW ENGLAND PXRE REINSURANCE COMPANY
ASSET MANAGEMENT, INC.

/s/ Gerard T. Lynch /s/ James F. Dore
- ------------------------------------ -------------------------------
By: Gerard T. Lynch (Signature)
Its President
James F. Dore
-------------------------------
(Name)

Executive Vice President & Chief
Financial Officer
--------------------------------
(Title)

Pond View Corporate Center 399 Thornall St
76 Batterson Park Road Edison NJ 08837
Farmington, Connecticut 06032 --------------------------------
(Principal Address)

06-1206728
--------------------------------
(Taxpayer Identification Number)

SCHEDULE A

I. ACCOUNT ASSETS.

A. Managed Assets - Client has deposited the following securities, cash
and other assets with the Custodian identified below to be managed under this
Agreement:

B. Unmanaged Assets - Client also deposited with the Custodian the
following assets which are not to be managed under this Agreement:

II. CUSTODY OF ACCOUNT ASSETS. The assets to be managed under this Agreement and
any Unmanaged Assets will be held by:

JP Morgan Chase Custodial Account Number: G05140
- -------------------------------- -----------
(Name)

4 New York Plaza, 2nd Floor Custodian Contact: Lillian White
- -------------------------------- ------------------
(Address)

New York, NY 1004-2413 Contact Phone Number: 212-623-5242
- -------------------------------- ---------------

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

III. FEES. Manager's fees for services provided under this Agreement, including
assistance with Schedule D preparation provided under this Agreement shall be as
follows:

Annual fee of .20 % (twenty hundredths of one percent) of the first $200 million
of the Stat market value of the assets under management;

..15 % (fifteen hundredths of one percent) of the next $200 million of the Stat
market value of the assets under management;

..10% (ten hundredths of one percent) of the Stat market value of the remaining
assets under management.
- -------------------------------------------------------------------------------

IV. BROKERAGE DIRECTION. Client directs Manager to cause all transactions for
the Account to be executed through the following broker, dealer or bank:
- -------------------------------------------------------------------------------

Client has read, understands and accepts the limitations that this direction
will place on Manager's ability to seek best execution for the Account. This
direction may be changed by Client at any time by notifying Manager in writing.
- -------------------------------------------------------------------------------

V. NAME OF CLIENT: VI. DATE:
PXRE REINSURANCE COMPANY

By: /s/ James F. Dore 4/8/02
- -------------------------------- --------------------------

SCHEDULE B

PXRE
UNMANAGED ASSETS

Bonds on Deposit for PXRE Reinsurance Company
4/8/02 17:41

Maturity
Deposit with Bank Contact Par Value Desc Rate Date
- ------------------------------------------------------------------------------------------------------------------------------

Oregon Department of Insurance
440 Labor and Industries Building 425,000 USTN 0.06375 8/15/02
Salem, Oregon 97310
Attn: Diane Koening Tony
Tel: (503) 378-4281 ex620 503-275-3333
Fax: (503) 378-4351

California Department of Insurance
Supervisor-Securities Deposit Unit 32,000 CD 6/18/03
300 Capital Mall, Suite 1300
Sacramento, CA 95814 Bank of America
Attn: Mr. Jose Clarece Basken
916-492-3225 916-321-4611

Office of Commissioner of Insurance Randy Thompson
7th Floor West Tower, Floyd Building Wachovia Bank, N.A. 90,000 UST 0.055 2/15/08
2 Martin Luther King, Jr. Drive Georgia Serv Center
Atlantia, Georgia 30334 MC NC 31013
Attn: Branda 1 West 4th St Winston-Salem
404-651-6825 NC 27101
P 336-770-6405
F 336-770-4059

Office of the Treasurer Fleet Bank
55 Elm Street Paul Foster 500,000 Minnesota ST 0.05000 11/1/07
Hartford, Connecticut 06106 617-346-5569 (PH) 2,000,000 Chicago Tax-a-Cent 0.04600 6/1/05
Attn: Carol Teller 1 Federal Street 4,925,000 FNMA 0.05750 2/15/08
Tel: (860) 566-5050 EXT 3122 MADE 10306 A ---------
Fax: (860) 702-3041 Boston MA 02110 7,425,000

Commission of Insurance
(On Deposit At Bank One)
P.O. Box 94214
Baton Rouge, Lousiana 50,000 USTN 0.055 2/15/08
Attn: Cita Christian
Tel: (225) 342-1201
Fax: (225) 342-7352

Division of Treasury
Ms. Kaitlin Crowe
1 Ashburton Place 100,000 USTN 0.06375 8/15/02
Boston, Ma 02108
Tel (617) 367-3900 X234
Fax: (617) 523-1068

Merrill Lynch 402,500 FNMA 0.0575 2/15/08
110 South Bedford Road
Mt. Kisco, NY 10549
Attn: James Cotto
Tel: 1-800-374-8498
Fax: 1-914-244-3817
COLLATERAL FOR LOC-NY

Due SEMI
Deposit with Cusip Date ANNUAL
- -----------------------------------------------------------------------------

Oregon Department of Insurance
440 Labor and Industries Building 912827-G5-5 Feb/Aug 13,547
Salem, Oregon 97310
Attn: Diane Koening
Tel: (503) 378-4281 ex620
Fax: (503) 378-4351

California Department of Insurance
Supervisor-Securities Deposit Unit
300 Capital Mall, Suite 1300
Sacramento, CA 95814
Attn: Mr. Jose
916-492-3225

Office of Commissioner of Insurance
7th Floor West Tower, Floyd Building 9128273X6 Feb/Aug 2,475
2 Martin Luther King, Jr. Drive
Atlantia, Georgia 30334
Attn: Branda
404-651-6825

Office of the Treasurer
55 Elm Street 604128L71 May/Nove 12,500
Hartford, Connecticut 06106 167709AT1 Jun/Dec 46,000
Attn: Carol Teller 31359MDJ9 Feb/Aug 141,594
Tel: (860) 566-5050 EXT 3122
Fax: (860) 702-3041

Commission of Insurance
(On Deposit At Bank One)
P.O. Box 94214
Baton Rouge, Lousiana 9128273X8 Feb/Aug 1,375
Attn: Cita Christian
Tel: (225) 342-1201
Fax: (225) 342-7352

Division of Treasury
Ms. Kaitlin Crowe
1 Ashburton Place 912827-G5-5 Feb/Aug 3,188
Boston, Ma 02108
Tel (617) 367-3900 X234
Fax: (617) 523-1068

Merrill Lynch 31359MDJ9 Feb/Aug 11,572
110 South Bedford Road
Mt. Kisco, NY 10549
Attn: James Cotto
Tel: 1-800-374-8498
Fax: 1-914-244-3817
COLLATERAL FOR LOC-NY

INVESTMENT GUIDELINES: The investment guidelines to be followed by Manager in
managing Client's Account are set forth below:

- ------------------------------------------------------------------------------
NAME OF CLIENT: DATE:
PXRE REINSURANCE COMPANY

By: /s/ James F. Dore 4/8/02
----------------------------------- -----------------------------

PXRE
UNMANAGED ASSETS

Bonds on Deposit for PXRE Reinsurance Company
4/18/02 17:41

Maturity
Deposit with Bank Contact Par Value Desc Rate Date Cusip
- ---------------------------------------------------------------------------------------------------------------------------------

Merrill Lynch 2,125,000 Illinois State 0.05875 8/1/14 452149UQ8
100 Campus Drive 4,000,000 Minnesota ST 0.05 11/1/07 604128L71
Park Avenue 42,500,000 UST 0.03625 8/31/03 9128277CO
Fordham Park,NJ 07932 ----------
973-301-7750/7792 48,625,000
973-301-7751 fax
COLLATERAL FOR LLOYDS
A/C #16M10354

Banc One Oklahoma
National safe keeping services 300,000 Chicago Tax 0.046 6/1/05 167709AT1
Client Service Dept, 6th Floor A Cent Lo IL
100 N. Broadway, Oklahoma City, Ok 73102
Attn: Judith Watts
P - 405-231-6966
F - 405-231-6483

Chase Manhattan Bank 6,006,478 Federal Home 0.0473 3/1/03
New York, NY Loan Mortg. Corp
Purchased to cover finite deal Debt
Will mature in 2 years

Bank of America 150,000 FNMA 0.0575 2/15/08 31359MDJ9
BK of NYC/BOATRUST
Attn: Brenda Nichols
Mail Code: AR1-101-06-06
PO Box 1681 Little Rock
AR 72203-1681
(501)378-1913

Attn: Maria Magdalena Linera 500,000 PR Electric 0.049 07/01/05 745268WX6
P - (787) 722-8686 X 2220 Power Authority
F - (787) 787-722-4400
P.O. Box 8330
San Juan, Puerto Rico 00910-8330
Ref - E-67 (i)
Held @ Chase

Due SEMI
Deposit with Date ANNUAL
- --------------------------------------------------------------------

Merrill Lynch Feb/Aug 62,422
100 Campus Drive May/Nove 100,000
Park Avenue Feb/Aug 770,313
Fordham Park,NJ 07932
973-301-7750/7792
973-301-7751 fax
COLLATERAL FOR LLOYDS
A/C #16M10354

Banc One Oklahoma
National safe keeping services Jun/Dec 6,900
Client Service Dept, 6th Floor
100 N. Broadway, Oklahoma City, Ok 73102
Attn: Judith Watts
P - 405-231-6966
F - 405-231-6483

Chase Manhattan Bank April/Oct 142,053
New York, NY
Purchased to cover finite deal
Will mature in 2 years

Bank of America Feb/Aug 4,313
BK of NYC/BOATRUST
Attn: Brenda Nichols
Mail Code: AR1-101-06-06
PO Box 1681 Little Rock
AR 72203-1681
(501)378-1913

Attn: Maria Magdalena Linera Oct/March 12,250
P - (787) 722-8686 X 2220
F - (787) 787-722-4400
P.O. Box 8330
San Juan, Puerto Rico 00910-8330
Ref - E-67 (i)
Held @ Chase

PXRE Group
Revised Draft Investment Policy Statement

Performance Permitted
Segment Driven By Benchmarks Investment Philosophy Investments
- ------- --------- ---------- --------------------- ---------------

Excess Capital Represents the balancing Weighting of: Maximize after tax reported returns Treasury Bonds
portion of portfolio that is through investment in longer term Agency Bonds
in excess of all actual and - Zurich Hedge debt investments, hedge funds and Municipal Bonds
projected obligations as Fund of Funds other limited partnerships. Corporate Bonds
represented by the Liability Index Securities and sectors likely to Mortgage-backed
and Primary Capital segments. aggregate with insurance portfolio Securities
Represents surplus shareholder - Lehman Aggregate to be avoided. Asset-backed
funds that can be more AA Bond Index Average maturities: none securities
aggressively invested to Credit quality: Minimum BBB, Hedge Funds
achieve higher returns. This Depending on actual Mortgage-backed and Asset-backed Other Limited
portion of the portfolio allocation in period AA. Average AA or higher. Partnerships
contains the non-bond Diversification: No limit on U.S.
investments in hedge fund and Government, Agency or municipal
other limited partnerships. obligations. No more than the
This portion of the portfolio greater of $20 million or 5% of
is to be actively managed to portfolio any one corporate issuer
maximize reported return and AA or better, and no more than the
value across the permitted greater of $10 million or 2.5% of
bond universe. The Hedge Fund portfolio for corporate issuer
guidelines are addressed below AA, across all portfolio
separately. segments.

Exhibit 2 Page 6 of 9

PXRE Group
Investment Policy Statement

Performance Permitted
Segment Driven By Benchmarks Investment Philosophy Investments
- ------- --------- ---------- --------------------- ---------------

Primary Capital Need to maintain a level of Lehman AA Maximize after tax reported return Treasury Bonds
capital and surplus to 7 year Index while maintaining an appropriate U.S
maintain licenses, for preservation of capital. Allocation Agency Bonds
regulatory purposes and to between bond sectors should be Municipal Bonds
conduct reinsurance managed so as to earn maximum Corporate Bonds
operations. Amounts in this yields complying with overall Mortgage-backed
portfolio should be adequate investment guidelines. Securities
Securities and sectors likely to Asset-backed
to cover deficit in cash flows aggregate with insurance portfolio Securities
from operations related to to be avoided.
expected possible large loss Due to the low probability
events as defined in the of a large loss scenario, this
Company's annual plan. The portfolio should be actively
amount would be determined managed to reflect a balance
from the Company's annual plan between return and liquidity and to
by subtracting net written maximize returns in the
premiums, related intermediate term market (1-10
reinstatement premiuns from years) with an average maturity of
incurred losses net of 7 years. The portfolio should be
reinsurance recoverable, managed to produce investment
(giving affect to an income, while minimizing capital
anticipation delay in depreciation and capital losses in
collection, related commission the event of a wholesale
and brokerage and the liquidation of this portfolio to
projection of related payment fund a large loss.
patterns associated with the Average maturity: 7 years
loss.) Credit quality: Average grade AA -
This portfolio should be Minimum BBB, and minimum AA for
structured so as to maximize asset-backed and mortgage-backed.
after-tax reported returns, Diversification: No limit on U.S.
whilst maintaining an Government, Agency or municipal
appropriate preservation of obligations. No more than the
capital, low credit risk, and greater of $20 million or 5% of
relatively liquid in order to portfolio any one corporate issuer
be easily converted to cash AA or better, and no more than the
and cash equivalents in the greater of $10 million or 2.5% of
event of a large loss. portfolio for corporate issuer
below AA, across all portfolio
segments.

Exhibit 2 Page 7 of 9

PXRE Group
Investment Policy Statement

Performance Permitted
Segment Driven By Benchmarks Investment Philosophy Investments
- ------- --------- ---------- --------------------- ---------------

Liability Need to maintain investments Lehman AA Bond index Investment grade, intermediate Treasury Bonds
Portfolio whose duration and cash flow with weighted maturity bonds and money market Agency Bonds
is reasonably matched to the average duration investments. Maintain a portfolio Municipal Bonds
Company's obligations with across Catastrophe of laddered years or directly Corporate Bonds
respect to losses and loss and Finite and matched to expected liabilities. Mortgage-backed
expenses (net of reinsurance Exited Lines, Securities and sectors likely to Securities
recoverable) and other initially 2.5 years aggregate with insurance portfolio Asset backed
liabilities arising from to be avoided. Securities
reinsurance agreements. Average maturity: weighted average Treasury Bills
This segment can vary in size computed quarterly. & Notes
dependent upon the status of Credit Quality: BBB or better. Money Market
losses and therefore should be Average credit quality AA. Foreign, Instruments:
adjusted to match the expected Mortgage-backed and Asset-backed Commercial
cash flow requirements of the Securities minimum AA. Paper
Company's liabilities Diversification: No limit on U.S. Bankers'
quarterly. Government, Agency or municipal Acceptances
obligations. No more than the Certificates
greater of $20 million or 5% of of Deposit
portfolio any one corporate issuer Foreign
AA or better, and no more than the Securities
greater of $10 million or 2.5% of
portfolio for corporate issuer
below AA, across all portfolio
segments.
Foreign Securities: To match
foreign exchange exposure

Exhibit 2 Page 8 of 9

SCHEDULE C

PROXY VOTING GUIDELINES: The proxy voting guidelines to be followed by Manager
in voting securities held in the Account are set forth below:

(If none, check here /X/.)

NAME OF CLIENT: DATE:
PXRE REINSURANCE COMPANY

By: /s/ James F. Dore 4/8/02
----------------------------------- -----------------------------

SCHEDULE D

SECRETARY'S CERTIFICATE
-----------------------

I, Bruce J. Byrnes, the Secretary of PXRE REINSURANCE COMPANY, (the
"Corporation"), a Corporation organized and existing under the laws of the State
of Connecticut hereby certify that each of the following officers of the
Corporation, acting singly, is authorized in the name and on behalf of the
Corporation, to give instructions to General Re-New England Asset Management,
Inc. ("Manager") with respect to any and all matters, including investment and
reinvestment of securities, pertaining to the Investment Management Agreement
between the Corporation and Manager, and to execute and deliver any and all
documents and to take any and all other action to carry out the purposes of said
Investment Management Agreement. I further certify that the specimen signature
set forth next to the names of such officers, is the true and genuine signature
of such persons.

Name of Officer Title Signature
--------------- ----- ---------

James F. Dore EVP & CFO /s/ James F. Dore
- -------------------- ------------------------- -----------------------

R.E.J. Jeffreys V.P. & Asst. Treas. /s/ R.E.J. Jeffreys
- -------------------- ------------------------- -----------------------

Gerald L. Radke President & CEO /s/ Gerald L. Radke
- -------------------- ------------------------- -----------------------

This Certificate shall be in effect from the date hereof until written
notice is given on behalf of the Corporation to terminate or revise it.

IN WITNESS WHEREOF, I set my hand and seal of the Corporation.

/s/ Bruce J. Byrnes 2/8/02
------------------------------ ----------------------
Secretary Date

(Corporate Seal)

Schedule E
PXRE REINSURANCE COMPANY

Accounting and Reporting Services

Periodic Reporting of All Investment Income and Transactions

1. STAT and GAAP basis reporting
2. Review of monthly market values from reliable independent pricing sources
by Asset Class Specialists
3. Monthly general ledger journal entries
4. Monthly general ledger and trial balance preparation and reconciliation to
Statutory Schedule D Reports
5. Monthly reconciliation to Client custodians and discrepancy resolution
6. Monthly, quarterly and annual reporting packages delivered to Client by
mail, electronic transfer or via website
7. Summary and Detail Transaction Reports
8. Investment Income Earned Report
9. Monthly Appraisal Reports
10. Rating of securities by Standard & Poor's, Moody's, Fitch
11. Periodic FAS 91 Adjustments

Statutory Reporting

1. Assistance in preparation of Quarterly and Annual Statutory Schedule D
Reports
2. Quarterly and Annual NAIC pricing and designations
3. Securities Valuation Office ("SVO") filings

GENERAL RE - NEW ENGLAND ASSET MANAGEMENT, INC.

Investment Management Agreement
-------------------------------

This Agreement is made as of the 8 day of April, 2002, between

1. GENERAL RE - NEW ENGLAND ASSET MANAGEMENT, INC., a corporation
organized under the laws of the State of Delaware ("Manager"); and

2. PXRE GROUP LTD., a corporation organized under the laws of BERMUDA (the
"Client").

WHEREAS, Client desires to appoint Manager as the investment manager of
that portion of Client's assets constituting the Account (as defined below) for
fees agreed upon in Schedule A. III.;

NOW THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:

Section 1. The Account

Section 2. Management of the Account

Manager will not be responsible for giving Client investment advice or
taking any other action with respect to Unmanaged Assets.

Section 3. Transactions for the Account

Client may direct all transactions for the Account to a particular
broker, dealer or bank, by writing the name and address of that broker, dealer
or bank in the space provided on Schedule A.

Section 4. Transaction Confirmations

Client may elect to receive individual confirmations at any time by
giving Manager written notice.

Section 5. Custody of Account Assets

Client will provide Manager with a copy of its agreement with the
Custodian, and will give Manager reasonable advance notice of any change of
Custodian.

Section 6. Reports to Client

Section 7. Account Valuation

Section 8. Manager's Fees

Client agrees to pay Manager's fees as follows:

|_| The Custodian will deduct the fees from Client's Account and
pay them to Manager each quarter. Manager will send Client and
the Custodian at the same time a bill showing the amount of
Manager's fees, the Account value on which they were based and
how they were calculated. The Custodian will send Client a
monthly statement showing all amounts paid from the Account,
including Manager's fees.

|x| Client will be billed directly by Manager and will pay
Manager's fees within 30 days Of receiving the bill.

Section 9. Proxy Voting

Proxies for securities in the Account should be voted as follows:

|_| Client directs Manager not to vote proxies for securities held
for the Account.

|X| Client directs Manager to vote all proxies for securities held
for Client's Account in accordance with --

|X| Manager's own discretion

|_| Client's proxy voting guidelines attached as Schedule
C.

These proxy voting instructions may be changed at any time by notifying
Manager in writing.

Section 10. Legal Proceedings

Manager will not advise or act for Client in any legal proceedings,
including bankruptcies or class actions, involving securities held in the
Account or issuers of those securities.

Section 11. Risk

Section 12. Standard of Care; Limitation of Liability

Federal and state securities laws impose liabilities under certain
circumstances on persons who act in good faith, and this Agreement does not
waive or limit Client's rights under those laws.

Except as set forth above with respect to the Account, Manager will not
be responsible for Client's own compliance with the insurance investment laws of
Client's state of domicile. Notwithstanding any other provision in this
Agreement, Manager shall not be responsible for Client's compliance with
applicable tax laws.

Section 13. Client Directions

Section 14. Confidentiality

Except as Client and Manager otherwise agree or as may be required by
law, all information concerning the Account and services provided under this
Agreement shall be kept confidential.

Section 15. Non-Exclusive Agreement

Section 16. Term of Agreement

Section 17. Agreement Not Assignable

This Agreement may not be assigned within the meaning of the Investment
Advisers Act of 1940 (the "Advisers Act") by Manager without Client's consent.

Section 18. Governing Law

The laws of the State of Connecticut will govern this Agreement.
However, nothing in this Agreement will be construed contrary to any provision
of the Advisers Act or the rules thereunder.

Section 19. Miscellaneous

Section 20. Notices

Section 21. Representations of Client

Section 22. Representations of Manager

Manager represents and warrants that (i) this Agreement has been duly
authorized, executed and delivered by Manager and is its valid and binding
obligation, (ii) it is registered with the United States Securities Exchange
Commission ("SEC") as an investment advisor under the Advisors Act; and (iii)
that it has all other licenses and registrations necessary to perform its
obligations under this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Section 23. Form ADV

Client has received and reviewed a copy of Part II of Manager's Form ADV
and a copy of this Agreement.

Section 24. Independent Contractor

AGREED TO AND ACCEPTED BY:

GENERAL RE-NEW ENGLAND PXRE GROUP LTD.
ASSET MANAGEMENT, INC.

/s/ Gerard T. Lynch /s/ Jeffrey L. Radke
- ------------------------- --------------------------------
By: Gerard T. Lynch (Signature)
Its President Jeffrey L. Radke
--------------------------------
(Name)

President
--------------------------------
(Title)

Pond View Corporate Center 99 Front Street
76 Batterson Park Road --------------------------------
Farmington, Connecticut 06032 Hamilton HM12, Bermuda
--------------------------------
(Principal Address)
98-0214719
--------------------------------
(Taxpayer Identification Number)

SCHEDULE A
I. ACCOUNT ASSETS.

A. Managed Assets - Client has deposited the following securities, cash
and other assets with the Custodian identified below to be managed under this
Agreement:

B. Unmanaged Assets - Client also deposited with the Custodian the
following assets which are not to be managed under this Agreement:

- -------------------------------------------------------------------------------
II. CUSTODY OF ACCOUNT ASSETS. The assets to be managed under this Agreement and
any Unmanaged Assets will be held by:

Custodial Account Number:
- ------------------------------------- ---------------
(Name)

SEE ATTACHED Custodian Contact:
- ------------------------------------- ---------------------
(Address)
Contact Phone Number:
- -------------------------------------- ------------------

- -------------------------------------------------------------------------------
III. FEES. Manager's fees for services provided under this Agreement, including
assistance with Schedule D preparation provided under this Agreement shall be as
follows:

Annual fee of .20% (twenty hundredths of one percent) of the first $200 million
of the Stat market value of the assets under management;

..15% (fifteen hundredths of one percent) of the next $200 million of the Stat
market value of the assets under management;

..10% (ten hundredths of one percent) of the Stat market value of the remaining
assets under management.

The assets of PXRE REINSURANCE COMPANY, PXRE REINSURANCE LTD. AND PXRE GROUP
LTD. shall be aggregated for fee purposes.

IV. BROKERAGE DIRECTION. Client directs Manager to cause all transactions for
the Account to be executed through the following broker, dealer or bank:

- -------------------------------------------------------------------------------
V. NAME OF CLIENT: VI. DATE:
PXRE GROUP LTD.

By: /s/ Jeffrey L. Radke April 8 2002
-------------------------- --------------------
J. L. Radke

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

- -------------------------------------------------------------------------------
INVESTMENT GUIDELINES: The investment guidelines to be followed by Manager in
managing Client's Account are set forth below:

- -------------------------------------------------------------------------------
NAME OF CLIENT: DATE:
PXRE GROUP LTD.

By: /s/ Jeffrey L. Radke April 8, 2002
-------------------------- --------------------
J. L. Radke

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

PXRE Group
Revised Draft Investment Policy Statement

Performance
Segment Driven By Benchmarks Investments Philosophy Permitted Investments
------- --------- ---------- ---------------------- ---------------------

Excess Capital Represents the balancing portion Weighting of: Maximize after tax reported Treasury Bonds
of portfolio that is in excess returns through investment in Agency Bonds
of all actual and projected - Zurich Hedge longer term debt investments, Municipal Bonds
obligations as represented by Fund of Funds hedge funds and other limited Corporate Bonds
the Liability and Primary Index partnerships. Securities and Mortgage-backed
Capital segments. Represents sectors likely to aggregate with Securities
surplus shareholder funds that - Lehman Aggregate insurance portfolio to be Asset-backed
can be more aggressively AA Bond Index avoided. Average maturities: securities
invested to achieve higher none Credit quality: Minimum Hedge Funds
returns. This portion of the Depending on actual BBB, Mortgage-backed and Other Limited
portfolio contains the non-bond allocation in period Asset-backed AA. Average AA or Partnerships
investments in hedge fund and higher. Diversification: No
other limited partnerships. This limit on U.S Government, Agency
portion of the portfolio is to or municipal obligations. No
be actively managed to maximize more than the greater of $20
reported return and value across million or 5% of portfolio any
the permitted bond universe. The one corporate issuer AA
Hedge Fund guidelines are or better, and no more than the
addressed separately. greater of $10 million or 2.5%
of portfolio for corporate
issuer below AA, across all
portfolio segments.

Exhibit 2 Page 6 of 9

PXRE Group
Investment Policy Statement

Performance
Segment Driven By Benchmarks Investments Philosophy Permitted Investments
------- --------- ---------- ---------------------- ---------------------

Primary Capital Need to maintain a level of Lehman AA Maximize after-tax reported Treasury Bonds U.S.
capital and surplus to maintain 7 year Index return while maintaining an Agency Bonds
licenses, for regulatory appropriate preservation of Municipal Bonds
purposes and to conduct capital. Allocation between bond Corporate Bonds
reinsurance operations. Amounts sectors should be managed so as Mortgage-backed
in this portfolio should be to earn maximum yields complying Securities
adequate to cover deficit in with overall investment Asset-backed
cash flows from operations guidelines. Securities and Securities
related to expected possible sectors likely to aggregate with
large loss events as defined in insurance portfolio to be
the Company's annual plan. The avoided. Due to the low
amount would be determined from probability of a large loss
the Company's annual plan by scenario, this portfolio should
subtracting net written be actively managed to reflect a
premiums, related reinstatement balance between return and
premiums from incurred losses liquidity and to maximize
net of reinsurance recoverable, returns in the intermediate term
(giving affect to an market (1-10 years) with an
anticipation delay in average maturity of 7 years. The
collection, related commission portfolio should be managed to
and brokerage and the projection produce investment income, while
of related payment patterns minimizing capital depreciation
associated with the loss. This and capital losses in the event
portfolio should be structured of a wholesale liquidation of
so as to maximize after-tax this portfolio to fund a large
reported returns, whilst loss. Average maturity: 7 years
maintaining an appropriate Credit quality: Average grade AA
preservation of capital, low - Minimum BBB. and minimum AA
credit risk, and relatively for asset-backed and
liquid in order to be easily mortgage-backed.
converted to cash and cash Diversification: No limit on US.
equivalents in the event of a Government, Agency or municipal
large loss. obligations. No more than the
greater of $20 million or 5% of
portfolio any one corporate
issuer AA or better, and no more
than the greater of $10 million
or 2.5% of portfolio for
corporate issuer below AA,
across all portfolio segments.

Exhibit 2 Page 7 of 9

PXRE Group
Investment Policy Statement

Performance
Segment Driven By Benchmarks Investments Philosophy Permitted Investments
------- --------- ---------- ---------------------- ---------------------

Liability Need to maintain investments Lehman AA Bond Investment grade, intermediate Treasury Bonds
Portfolio whose duration and cash flow is index with maturity bonds and money market Agency Bonds
reasonably matched to the weighted average investments. Maintain a Municipal Bands
Company's obligations with duration across portfolio of laddered years or Corporate Bonds
respect to losses and loss Catastrophe and directly matched to expected Mortgage-backed
expenses (net of reinsurance Finite and liabilities. Securities and Securities
recoverable) and other Exited Lines, sectors likely to aggregate with Asset backed
liabilities arising from initially 2.5 insurance portfolio to be Securities
reinsurance agreements. This years avoided. Average maturity: Treasury Bills &
segment can vary in size weighted average computed Notes
dependent upon the status of quarterly. Credit Quality: BBB Money Market
losses and therefore should be or better. Average credit Instruments:
adjusted to match the expected quality AA. Foreign, Commercial Paper
cash flow requirements of the Mortgage-backed and Asset-backed Bankers'
Company's liabilities quarterly. Securities minimum AA. Acceptances
Diversification: No limit on U.S. Certificates of
Government, Agency or municipal Deposit
obligations. No more than the Foreign
greater of $20 million or 5% of Securities
portfolio any one corporate
issuer AA or better, and no more
than the greater of $10 million
or 2.5% of portfolio for
corporate issuer below AA,
across all portfolio segments.
Foreign Securities: To match
foreign exchange exposure

Exhibit 2 Pages 8 of 9

SCHEDULE C

- --------------------------------------------------------------------------------
PROXY VOTING GUIDELINES: The proxy voting guidelines to be followed by Manager
in voting securities held in the Account are set forth below:

(If none, check here |X|)

- -------------------------------------------------------------------------------
NAME OF CLIENT: DATE:
PXRE Group Ltd.

By: /s/ Jeffrey L. Radke April 8, 2002
-------------------------- --------------------
Jeffrey L. Radke

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

SCHEDULE D

SECRETARY'S CERTIFICATE
-----------------------

I, I. S. Outerbridge, the Assistant Secretary of PXRE Group LTD, (the
"Corporation"), a Corporation organized and existing under the laws of BERMUDA
hereby certify that each of the following officers of the Corporation, acting
singly, is authorized in the name and on behalf of the Corporation, to give
instructions to General Re-New England Asset Management, Inc. ("Manager") with
respect to any and all matters, including investment and reinvestment of
securities, pertaining to the Investment Management Agreement between the
Corporation and Manager, and to execute and deliver any and all documents and to
take any and all other action to carry out the purposes of said Investment
Management Agreement. I further certify that the specimen signature set forth
next to the names of such officers, is the true and genuine signature of such
persons.

Name of Officer Title Signature

JEFFREY L. RADKE PRESIDENT /s/ Jeffrey L. Radke
- ----------------- ----------- -----------------------

LEATRICE J. ROMAN ASSIST. CONTROLLER /s/ Leatrice J. Roman
- ----------------- ------------------ -----------------------

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

This Certificate shall be in effect from the date hereof until written
notice is given on behalf of the Corporation to terminate or revise it.

IN WITNESS WHEREOF, I set my hand and seal of the Corporation.

/s/ I. S. Outerbridge April 8, 2002
- --------------------------------------- ----------------
Assistant Secretary Date

[SEAL]

Schedule E
PXRE Group LTD.

Accounting and Reporting Services

Periodic Reporting of All Investment Income and Transactions

Statutory Reporting

1. Assistance in preparation of Quarterly and Annual Statutory Schedule D
Reports
2. Quarterly and Annual NAIC pricing and designations
3. Securities Valuation Office ("SVO") filings

CUSTODY OF ACCOUNT ASSETS
-------------------------

1) Nations Funds
Bank of America Collateral Acct for
PXRE Reinsurance Ltd. (2)
P0 Box 34602, Charlotte
NC 28254 4602

Custodial Account Number: 857675
Custodian Contact: Anna Cannon
Contact Phone Number: 704 386 5601

2) JP Morgan
For PXRE Reinsurance Ltd.
2001 Bryan Street 11th Floor
Dallas, TX 75201

Custodial Account Number: PXRE Reinsurance Ltd. P 312909.2
Custodian Contact: Christopher Greene
Contact Phone Number: 214 946 8477

3) JP Morgan
4 New York Plaza, 2nd Floor
New York, NY 10004-2413

Custodial Account Number: PXRE Reinsurance Ltd. G08509
Custodian Contact: John Dipalo
Contact Phone Number: 212 623 0781

4) JP Morgan
4 New York Plaza, 2nd Floor
New York, NY 10004-2413

Custodial Account Number: PXRE Group Ltd. G08510
Custodian Contact: John Dipalo
Contact Phone Number: 212 623 0781

GENERAL RE - NEW ENGLAND ASSET MANAGEMENT, INC.

Investment Management Agreement
-------------------------------

This Agreement is made as of the 8th day of April, 2002, between

1. GENERAL RE - NEW ENGLAND ASSET MANAGEMENT, INC., a corporation
organized under the laws of the State of Delaware ("Manager"); and

2. PXRE REINSURANCE LTD., a corporation organized under the laws of
Bermuda (the "Client").

WHEREAS, Client desires to appoint Manager as the investment manager of
that portion of Client's assets constituting the Account (as defined below) for
fees agreed upon in Schedule A. III.;

NOW THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:

Section 1. The Account

The cash, securities and other assets placed by Client in the account
to be managed under this Agreement (the "Account") are listed on Section I.A.
of Schedule A. Assets may be added to the Account at any time. Client will
provide notification to the Manager of any such additions. The Account will
include these assets and any changes in them resulting from transactions
directed by Manager, withdrawals and additions made by Client, or dividends,
interest, stock splits and other earnings, gains or losses on the assets.

Section 2. Management of the Account

Manager will not be responsible for giving Client investment advice or
taking any other action with respect to Unmanaged Assets.

Section 3. Transactions for the Account

Client may direct all transactions for the Account to a particular
broker, dealer or bank, by writing the name and address of that broker, dealer
or bank in the space provided on Schedule A.

Section 4. Transaction Confirmations

Client may elect to receive individual confirmations at any time by
giving Manager written notice.

Section 5. Custody of Account Assets

Client will provide Manager with a copy of its agreement with the
Custodian, and will give Manager reasonable advance notice of any change of
Custodian.

Section 6. Reports to Client

Section 7. Account Valuation

Section 8. Manager's Fees

Client agrees to pay Manager's fees as follows:

|X| Client will be billed directly by Manager and will pay
Manager's fees within 30 days of receiving the bill.

Section 9. Proxy Voting

Proxies for securities in the Account should be voted as follows:

|_| Client directs Manager not to vote proxies for securities held
for the Account.

|X| Client directs Manager to vote all proxies for securities held
for Client's Account in accordance with --

|X| Manager's own discretion

|_| Client's proxy voting guidelines attached as Schedule
C.

These proxy voting instructions may be changed at any time by notifying
Manager in writing.

Section 10. Legal Proceedings

Manager will not advise or act for Client in any legal proceedings,
including bankruptcies or class actions, involving securities held in the
Account or issuers of those securities.

Section 11. Risk

Section 12. Standard of Care; Limitation of Liability

Federal and state securities laws impose liabilities under certain
circumstances on persons who act in good faith, and this Agreement does not
waive or limit Client's rights under those laws.

Section 13. Client Directions

Section 14. Confidentiality

Except as Client and Manager otherwise agree or as may be required by
law, all information concerning the Account and services provided under this
Agreement shall be kept confidential.

Section 15. Non-Exclusive Agreement

Section 16. Term of Agreement

Section 17. Agreement Not Assignable

This Agreement may not be assigned within the meaning of the Investment
Advisers Act of 1940 (the "Advisers Act") by Manager without Client's consent.

Section 18. Governing Law

The laws of the State of Connecticut will govern this Agreement.
However, nothing in this Agreement will be construed contrary to any provision
of the Advisers Act or the rules thereunder.

Section 19. Miscellaneous

Section 20. Notices

Section 21. Representations of Client

Section 22. Representations of Manager

Manager represents and warrants that (i) this Agreement has been duly
authorized, executed and delivered by Manager and is its valid and binding
obligation, (ii) it is registered with the United States Securities Exchange
Commission ("SEC") as an investment advisor under the Advisors Act; and (iii)
that it has all other licenses and registrations necessary to perform its
obligations under this Agreement.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

Section 23. Form ADV

Client has received and reviewed a copy of Part II of Manager's Form ADV
and a copy of this Agreement.

Section 24. Independent Contractor

AGREED TO AND ACCEPTED BY:

GENERAL RE-NEW ENGLAND PXRE REINSURANCE LTD.
ASSET MANAGEMENT, INC.

President
--------------------------------
(Title)

Pond View Corporate Center 99 Front Street
76 Batterson Park Road --------------------------------
Farmington, Connecticut 06032 Hamilton HM12, Bermuda
--------------------------------
(Principal Address)
98-0214718
--------------------------------
(Taxpayer Identification Number)

SCHEDULE A
I. ACCOUNT ASSETS.

A. Managed Assets - Client has deposited the following securities, cash
and other assets with the Custodian identified below to be managed under this
Agreement:

B. Unmanaged Assets - Client also deposited with the Custodian the
following assets which are not to be managed under this Agreement:

Custodial Account Number:
- ------------------------------------- ---------------
(Name)

SEE ATTACHED Custodial Contact:
- ------------------------------------- ---------------------
(Address)
Contact Phone Number:
- -------------------------------------- ------------------

Annual fee of .20% (twenty hundredths of one percent) of the first $200 million
of the Stat market value of the assets under management;

..15% (fifteen hundredths of one percent) of the next $200 million of the Stat
market value of the assets under management;

..10% (ten hundredths of one percent) of the Stat market value of the remaining
assets under management.

The assets of PXRE REINSURANCE COMPANY, PXRE REINSURANCE LTD. AND PXRE GROUP
LTD. shall be aggregated for fee purposes.

IV. BROKERAGE DIRECTION. Client directs Manager to cause all transactions for
the Account to be executed through the following broker, dealer or bank:

- -------------------------------------------------------------------------------
V. NAME OF CLIENT: VI. DATE:
PXRE REINSURANCE LTD.

By: /s/ Jeffrey L. Radke April 8, 2002
-------------------------- --------------------
Jeffrey L. Radke

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

- -------------------------------------------------------------------------------
NAME OF CLIENT: DATE:
PXRE REINSURANCE LTD.

By: /s/ Jeffrey L. Radke April 8 2002
-------------------------- --------------------
Jeffrey L. Radke

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

PXRE Group
Revised Draft Investment Policy Statement

Performance
Segment Driven By Benchmarks Investment Philosophy Permitted Investments
------- --------- ---------- --------------------- ---------------------

Excess Capital Represents the balancing portion Weighting of: Maximize after tax reported Treasury Bonds
of portfolio that is in excess returns through investment in Agency Bonds
of all actual and projected - Zurich Hedge longer term debt investments, Municipal Bonds
obligations as represented by Fund of Funds hedge funds and other limited Corporate Bonds
the Liability and Primary Index partnerships. Securities and Mortgage-backed
Capital segments. sectors likely to aggregate with Securities
Represents surplus shareholder - Lehman Aggregate insurance portfolio to be Asset-backed
funds that can be more AA Bond Index avoided. securities
aggressively invested to Average maturities: none Hedge Funds
achieve higher returns. This Depending on actual Credit quality: Minimum BBB, Other Limited
portion of the portfolio allocation in period Mortgage-backed and Asset-backed Partnerships
contains the non-bond AA. Average AA or higher.
investments in hedge fund and Diversification: No limit on U.S.
other limited partnerships. Government, Agency or municipal
This portion of the portfolio obligations. No more than the
is to be actively managed to greater of $20 million or 5% of
maximize reported return and portfolio any one corporate
value across the permitted issuer AA or better, and no more
bond universe. The Hedge Fund than the greater of $10 million
guidelines are addressed or 2.5% of portfolio for
separately. corporate issuer below AA, across
all portfolio segments.

Exhibit 2 Page 6 of 9

PXRE Group
Investment Policy Statement

Performance
Segment Driven By Benchmarks Investment Philosophy Permitted Investments
------- --------- ---------- --------------------- ---------------------

Primary Capital Need to maintain a level of Lehman AA Maximize after tax reported Treasury Bonds U.S.
capital and surplus to maintain 7 year Index return while maintaining an Agency Bonds
licenses, foe regulatory appropriate preservation of Municipal Bonds
purposes and to conduct capital. Corporate Bonds
reinsurance operations. Amounts Allocation between bond sectors Mortgage-backed
in this portfolio should be should be managed so as to earn Securities
adequate to cover deficit in maximum yields complying with Asset-backed
cash flows from operations overall investment guidelines. Securities
related to expected possible Securities and sectors likely to
large loss events as defined in aggregate with insurance
the Company's annual plan. The portfolio to be avoided.
amount would be determined from Due to the low probability of a
the Company's annual plan by large loss scenario, this
subtracting net written portfolio should be actively
premiums, related reinstatement managed to reflect a balance
premiums from incurred losses between return and liquidity and
net of reinsurance recoverable, to maximize returns in the
(giving affect to an intermediate term market (1-10
anticipation delay in years) with an average maturity
collection, related commission of 7 years. The portfolio should
and brokerage and the projection be managed to produce investment
of related payment patterns income, while minimizing capital
associated with the loss. This depreciation and capital losses
portfolio should be structured in the event of a wholesale
so as to maximize after-tax liquidation of this portfolio to
reported returns, whilst fund a large loss.
maintaining an appropriate Average maturity: 7 years Credit
preservation of capital, low quality: Average grade AA -
credit risk, and relatively Minimum BBB, and minimum AA for
liquid in order to be easily asset-backed and
converted to cash and cash mortgage-backed.
equivalents in the event of a Diversification: No limit on
large loss. U.S. Government, Agency or
municipal obligations. No more
than the greater of $20 million
or 5% of portfolio any one
corporate issuer AA or better,
and no more than the greater of
$10 million or 2.5% of portfolio
for corporate issuer below AA,
across all portfolio segments.

Exhibit 2 Page 7 of 9

PXRE Group

Investment Policy Statement

Performance
Segment Driven By Benchmarks Investment Philosophy Permitted Investments
------- --------- ---------- --------------------- ---------------------

Liability Need to maintain investments Lehman AA Bond Investment grade, intermediate Treasury Bonds
Portfolio whose duration and cash flow is index with maturity bonds and money market Agency Bonds
reasonably matched to the weighted average investments. Maintain a Municipal Bands
Company's obligations with duration across portfolio of laddered years or Corporate Bonds
respect to losses and loss Catastrophe and directly matched to expected Mortgage-backed
expenses (net of reinsurance Finite and liabilities. Securities Asset
recoverable) and other Exited Lines, Securities and sectors likely to backed
liabilities arising from initially 2.5 aggregate with insurance Securities
reinsurance agreements. years portfolio to be avoided Treasury Bills &
This segment can vary in size Average maturity: weighted Notes Money
dependent upon the status of average computed quarterly. Market
losses and therefore should be Credit Quality: BBB or better. Instruments:
adjusted to match the expected Average credit quality AA. Commercial Paper
cash flow requirements of the Foreign, Mortgage-backed and Bankers'
Company's liabilities quarterly. Asset-backed Securities minimum Acceptances
AA. Certificates of
Diversification: No limit on US. Deposit Foreign
Government, Agency or municipal Securities
obligations. No more than the
greater of $20 million or 5% of
portfolio anyone corporate
issuer AA or better, and no
more than the greater of $10
million or 2.5% of portfolio for
corporate issuer below AA,
across all portfolio segments.
Foreign Securities: To match
foreign exchange exposure

Exhibit 2 Page 8 of 9

SCHEDULE C

(If none, check here |X|)

- -------------------------------------------------------------------------------
NAME OF CLIENT: DATE:
PXRE REINSURANCE LTD.

By: /s/ Jeffrey L. Radke April 8, 2002
-------------------------- --------------------
Jeffrey L. Radke

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

SCHEDULE D

SECRETARY'S CERTIFICATE
-----------------------

I, DAVID J. DOYLE, the Secretary of PXRE REINSURANCE LTD, (the "Corporation"), a
Corporation organized and existing under the laws of BERMUDA hereby certify that
each of the following officers of the Corporation, acting singly, is authorized
in the name and on behalf of the Corporation, to give instructions to General
Re-New England Asset Management, Inc. ("Manager") with respect to any and all
matters, including investment and reinvestment of securities, pertaining to the
Investment Management Agreement between the Corporation and Manager, and to
execute and deliver any and all documents and to take any and all other action
to carry out the purposes of said Investment Management Agreement. I further
certify that the specimen signature set forth next to the names of such
officers, is the true and genuine signature of such persons.

Name of Officer Title Signature

JEFFREY L. RADKE PRESIDENT /s/ Jeffrey L. Radke
- ----------------- ----------- -----------------------

LEATRICE J. ROMAN ASSIST. CONTROLLER /s/ Leatrice J. Roman
- ----------------- ------------------ -----------------------

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

This Certificate shall be in effect from the date hereof until written
notice is given on behalf of the Corporation to terminate or revise it.

IN WITNESS WHEREOF, I set my hand and seal of the Corporation.

/s/ DAVID J. DOYLE April 8, 2002
- --------------------------------------- ----------------
Secretary Date

[SEAL]

Schedule E
PXRE REINSURANCE LTD.

Accounting and Reporting Services

Periodic Reporting of All Investment Income and Transactions

Statutory Reporting

1. Assistance in preparation of Quarterly and Annual Statutory Schedule D
Reports
2. Quarterly and Annual NAIC pricing and designations
3. Securities Valuation Office ("SVO") filings

CUSTODY OF ACCOUNT ASSETS
-------------------------

1) Nations Funds
Bank of America Collateral Acct for
PXRE Reinsurance Ltd. (2)
PO Box 34602, Charlotte
NC 28254 4602

Custodial Account Number: 857675
Custodian Contact: Anna Cannon
Contact Phone Number: 704 386 5601

2) JP Morgan
For PXRE Reinsurance Ltd.
2001 Bryan Street 11th Floor
Dallas, TX 75201

Custodial Account Number: PXRE Reinsurance Ltd. P 312909.2
Custodian Contact: Christopher Greene
Contact Phone Number: 212 946 8477

3) JP Morgan
4 New York Plaza, 2nd Floor
New York, NY 10004-2413

Custodial Account Number: PXRE Reinsurance Ltd. G08509
Custodian Contact: John Dipalo
Contact Phone Number: 212 623 0781

4) JP Morgan
4 New York Plaza, 2nd Floor
New York, NY 10004-2413

Custodial Account Number: PXRE Group Ltd. G08510
Custodian Contact: John Dipalo
Contact Phone Number: 212 623 0781