Rights Issue - Part 2

Amlin PLC
20 December 2001


PART TWO

Principal terms of the Rights Issue


Subject to the fulfilment of the conditions set out below and in the Prospectus 
expected to be posted to shareholders later today, Qualifying Shareholders 
(other than certain Overseas Shareholders) will be offered, by way of rights, 
New Amlin Shares at a price of 77 pence per New Amlin Share on the following 
basis:


2 New Amlin Shares for every 7 existing Amlin Shares


held by Qualifying Shareholders at the Record Date. Fractions of New Amlin 
Shares will not be allotted, each Qualifying Shareholder's entitlement being 
rounded down to the nearest whole number. The fractional entitlements will be 
aggregated and sold for the benefit of the Company. Accordingly Qualifying 
Shareholders with fewer than 4 existing Amlin Shares will not be entitled to any
New Amlin Shares.


The Rights Issue Price of 77 pence per New Amlin Share represents a 17.6 per 
cent. discount to the closing middle market price of 93.5 pence per Amlin Share 
on 19 December 2001, the last business day before the announcement of the Rights
Issue.


The Rights Issue is conditional, inter alia, upon:


(i) the passing of the Resolutions to be proposed at the Extraordinary General 
Meeting;


(ii) Admission becoming effective by not later than 8.00 a.m. on 15 January 2002
(or such later time and/or date as Hoare Govett and the Company may agree, not 
being later than 17 January 2002); and


(iii) the Underwriting Agreement becoming unconditional in all respects.


The Rights Issue will result in the issue of 59,582,887 New Amlin Shares 
(representing approximately 22.2 per cent. of the issued ordinary share capital 
of Amlin, as enlarged by the Rights Issue). The New Amlin Shares, when issued 
and fully paid, will rank pari passu in all respects with the existing Amlin 
Shares and will rank for all dividends or other distributions declared, made or 
paid after the date of issue of the New Amlin Shares.


Application for Admission has been made to the UK Listing Authority in respect 
of the New Amlin Shares. It is expected that Provisional Allotment Letters will,
subject to the Resolutions being passed, be despatched on 14 January 2002, 
immediately following the Extraordinary General Meeting, and that dealings will 
commence in the Nil Paid Rights on the London Stock Exchange at 8.00 a.m. on 15 
January 2002.


If, for any reason, the Provisional Allotment Letters are posted otherwise than 
on the day of the Extraordinary General Meeting, the times and dates referred to
in this announcement may be revised and the times and dates so revised will be 
contained in the Provisional Allotment Letters.


The latest time and date for acceptance and payment in full in respect of 
entitlements under the Rights Issue is 3.00 p.m. on 4 February 2002.


The full terms and conditions of the Rights Issue, including the procedure for 
acceptance and payment and the procedure in respect of Rights not taken up, are 
contained in the Prospectus expected to be posted to shareholders later today 
and will be included in the Provisional Allotment Letter.


Notice of Extraordinary General Meeting


A notice convening the Extraordinary General Meeting to be held at 12 noon on 
Monday 14 January 2002 at Amlin's offices at St. Helen's, 1 Undershaft, London 
EC3A 8ND, for the purpose of considering and, if thought fit, passing the 
Resolutions, is set out in the Prospectus expected to be sent to shareholders 
today. The Resolutions propose to:


(i) increase the authorised share capital of the Company from £75,000,000 to 
£91,250,000 by the creation of 65,000,000 additional Amlin Shares. This 
represents an increase of approximately 21.7 per cent. over the current 
authorised share capital of the Company. If this resolution is passed there will
be 96,877,007 authorised but unissued Amlin Shares following the Rights Issue;


(ii) subject to the resolution described in paragraph (i) above being passed and
becoming effective, authorise the Directors under section 80 of the Companies 
Act to allot relevant securities up to an aggregate nominal amount of 
£14,895,721.75 for the purposes of the Rights Issue and, in addition, up to an 
aggregate nominal amount of £22,343,582 other than for the purposes of the 
Rights Issue. If passed, these authorities will expire on the earlier of 15 
months after the passing of this resolution and the conclusion of the next 
annual general meeting of the Company and will give the Directors authority to 
allot relevant securities up to an aggregate nominal amount of £37,239,303.75, 
representing approximately 71.4 per cent. of the existing issued share capital. 
After accounting for the New Amlin Shares to be issued in connection with the 
Rights Issue, the Directors would have unutilised authority under section 80 of 
the Companies Act to allot relevant securities up to an aggregate nominal amount
of £22,343,582, representing just under one-third of the issued share capital as
enlarged pursuant to the Rights Issue.


Save in respect of the issue of New Amlin Shares pursuant to the Rights Issue 
and any issues of Amlin Shares which may be required to be made pursuant to the 
Amlin Share Option Schemes or as deferred consideration under the contract 
referred to in paragraph 8(e) of Part 5 of the Prospectus expected to be posted 
to shareholders later today, the Directors currently have no plans to allot 
relevant securities but the Directors believe it to be in the best interests of 
the Company for the Board to be granted these authorities to enable the Board to
take advantage of appropriate opportunities; and


(iii) subject to the resolution described in paragraph (ii) above being passed 
and becoming effective, disapply the pre-emption rights provisions of section 89
of the Companies Act in respect of the allotment of equity securities pursuant 
to the Rights Issue, pursuant to any other pre-emptive issues and, in respect of
other issues of equity securities for cash, up to an aggregate nominal value of 
£3,351,537, being just under five per cent. of the issued share capital as 
enlarged pursuant to the Rights Issue. If given, this authority will expire at 
the same time as the authorities referred to in paragraph (ii) expire.


Other than in relation to the issue of New Amlin Shares pursuant to the Rights 
Issue and the issues of Amlin Shares which will be required to be made as 
deferred consideration under the contract referred to in paragraph 8(e) of Part 
5 of the Prospectus expected to be posted to shareholders later today, the 
Directors have no present intention of issuing any equity securities pursuant to
the disapplication.

The resolutions described in paragraphs (i) and (ii) will be proposed as 
ordinary resolutions and the resolution described in paragraph (iii) will be 
proposed as a special resolution.



Intentions of Directors and of State Farm


Messrs Hextall, Kennedy, Mylvaganam, Sanders, Taylor and Lord Stewartby, who in 
aggregate hold 144,418 Amlin Shares (representing approximately 0.07 per cent. 
of Amlin's issued share capital), have irrevocably undertaken to take up in full
their entitlements to New Amlin Shares under the Rights Issue.

Mr Philipps, who holds 77,962 Amlin Shares (representing approximately 0.04 per 
cent. of Amlin's issued share capital), has stated his intention to apply for 
12,500 New Amlin Shares out of his entitlement to 22,274 New Amlin Shares. 
Messrs Carpenter and Holt, who in aggregate hold 2,341,434 Amlin Shares 
(representing approximately 1.12 per cent. of Amlin's issued share capital), 
intend to sell a maximum of such number of their entitlements to New Amlin 
Shares under the Rights Issue as will allow them to take up the balance of their
Rights, after providing for estimated costs and taxation.

State Farm Mutual Automobile Insurance Company, which holds 27,706,278 Amlin 
Shares (representing approximately 13.3 per cent. of Amlin's issued share 
capital), has irrevocably undertaken to take up in full its entitlement to New 
Amlin Shares under the Rights Issue.

Timetable:


Record Date for the Rights Issue                close of business on 9 January 
2002

Latest time and date for receipt of Forms of Proxy                              
                                                 12 noon on 12 January 2002

Extraordinary General Meeting                    12 noon on 14 January 2002

Despatch of Provisional Allotment Letters        14 January 2002

Dealings in the Nil Paid Rights commence         8.00 a.m. on 15 January 2002

Latest time and date for splitting Provisional 
Allotment Letters, nil paid                      3.00 p.m. on 31 January 2002

Latest time and date for acceptance and payment
in full and registration of renunciation         3.00 p.m. on 4 February 2002

Dealings in the New Amlin Shares commence, 
fully paid                                      8.00 a.m. on 5 February 2002

Expected date for crediting of CREST member accounts and despatch of definitive 
share certificates in respect of New Amlin Shares                               
                                                  5 February 2002


Further information


Full details of the Rights Issue, together with the notice of EGM are contained 
in the Prospectus which is expected to be posted to shareholders today.


Certain statements made in this announcement are forward looking statements.  
Such statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results and performance to 
differ materially from any expected further results or performances, express or 
implied, by the forward looking statements.  Factors that might cause forward 
looking statements to differ materially from actual results include, among other
things, regulatory and economic factors.  The Company assumes no responsibility 
to update any of the forward looking statements contained herein. Further, any 
indication in this announcement of the price at which Amlin Shares have been 
bought or sold in the past cannot be relied upon as a guide to future 
performance.


Neither the New Amlin Shares nor the Provisional Allotment letters have been or 
will be registered under the US Securities Act or under the relevant laws of any
State of the United States or any state, province or territory of Australia, 
Canada, Japan, New Zealand, the Republic of Ireland or South Africa.  Subject to
certain exceptions, neither the New Amlin Shares nor the Provisional Allotment 
Letter may be directly or indirectly offered, sold, taken up delivered renounced
or transferred in or into the United States,
Australia, Canada, Japan, New Zealand, the Republic of Ireland or South Africa 
or to, or for the account or benefit of, US persons.


Hoare Govett is acting for Amlin and for no one else in connection with the 
Rights Issues and will not be responsible to anyone other than Amlin for 
providing the protection afforded to clients of Hoare Govett or for providing 
advice in relation to the Rights Issue or any other matter referred to herein.


Appendix I - Assumptions and methodology underlying Amlin's estimate of losses 
resulting from the terrorist attacks of 11 September 2001




The terrorist attacks of 11 September 2001 have resulted in material losses for 
Amlin through its participation on the Managed Syndicates. A number of claim 
notifications have been received or probable exposures have been identified 
through a review of business underwritten and enquiries to insureds, reinsureds 
and brokers. Due to the nature and size of the loss events in New York, 
Washington D.C. and Pittsburgh, the estimation of likely loss is highly complex 
and involves assessments of many classes of business underwritten in the years 
ended 31 December 1999, 2000 and 2001. Therefore there is a greater degree of 
uncertainty relating to these loss estimates than would normally be the case.


Estimates of loss


The current projected net loss estimate to Amlin, in respect of the Group's own 
share of its Managed Syndicates' capacity on the relevant Lloyd's years of 
account, is £60 million, which is equivalent to 21 pence per existing Amlin 
Share after tax.


The gross estimate of loss emanating from the Managed Syndicates, on a 100 per 
cent. basis, is approximately US$690 million (approximately £463 million). The 
Board considers that the Managed Syndicates can be expected to recover 
approximately US$560 million (approximately £375 million) from their own 
reinsurance arrangements, net of reinstatement premiums payable to reinsurers to
reinstate cover for future losses. The net loss of approximately US$130 million 
to the Managed Syndicates equates to approximately £88 million. The conversion 
of amounts from US$ to £ in this paragraph assumes an exchange rate of 
£1:US$1.49, being the exchange rate adopted by Lloyd's as at 31 December 2000.


The Directors anticipate that the Group's share of the gross loss exposure is in
the following categories of business and will be as follows:



Class of business                                                         
Amlin's share of gross exposure US$m
Direct and facultative property                                           61.5

Property reinsurance and risk excess of loss                              189.3

Direct airline operators and airport contractors                          155.1

Reinsurance of airline, airport operators' and airline contractors' risks 19.1

Other                                                                     18.3

                                                                          443.3



After reinsurance recoveries, net of reinstatement costs of US$355.4 million, 
Amlin's share of the net exposure is US$87.9 million.


Method of estimation and assumptions


The gross loss estimate emanates mainly from the following sources:


Direct and facultative property contracts: Amlin has reviewed all direct and 
facultative property contracts underwritten in 2000 and 2001 to determine which 
contracts have property exposure in the vicinity of Lower Manhattan. Policy 
limits of relevant contracts have been assumed in the gross loss estimate unless
sufficient information has been received to indicate that an amount other than 
the policy limit should be assumed.


It is possible that Syndicate 2001 could receive contingent business 
interruption claims from direct and facultative property contracts in respect of
properties which are outside the Lower Manhattan or Pentagon vicinities but 
where the policyholder has suffered business interruption as a result of the 
events of 11 September. The Directors believe that the cost of such claims will 
not be material.


Property reinsurance contracts: The main property reinsurance contracts 
underwritten have been reviewed and assessed for likelihood of loss. The 
coverage granted under relevant contracts provides reinsurance cover for 
insurance companies' direct and facultative property portfolios of risks.  
Coverage granted is typically primary reinsurance and not retrocessional. The 
estimates of losses arising from such contracts are based on information 
obtained from the brokers who placed the contracts on behalf of the insurance 
companies, or directly from the relevant insurance companies.  Accordingly, the 
estimates are reliant on the completeness and accuracy of information provided 
by third parties. Where notified loss information is considered to be poor or 
unreliable, Amlin has added a margin for prudential purposes.


Airline, airport operators' and airport contractors' contracts: A number of 
clients may have claims under their liability insurance contracts, if, and to 
the extent that, they are deemed to be liable for negligence which has 
contributed to the loss. Such clients include airlines and airport operators and
security contractors. In some cases the liability of such parties appears 
remote. Where the potential for a claim has been identified, albeit speculative 
or unlikely, an estimate has been incorporated into the overall loss estimate. 
In the case of exposures related to the World Trade Center anticipated losses 
are based on policy limits. In the case of the Washington D.C. and Pittsburgh 
losses, anticipated losses are based on the management's estimates of the damage
caused and the number of lives lost.


The remaining loss is spread over a number of other classes, including war, 
specie and personal accident.


The net loss is arrived at by deducting from the gross loss the estimated 
reinsurance recoveries, net of reinstatement premiums, for each of the Managed 
Syndicates. Reinsurance recoveries have been estimated by mapping the estimated 
losses against the reinsurance cover available. The recovery estimate is based 
on the amount of recovery that can be made against the relevant policies. The 
cost of reinsurance premiums to reinstate reinsurance cover has been calculated 
under the terms of applicable policies and is included within the net estimate.


Recoveries under a number of reinsurance contracts are triggered by the overall 
market property insured loss reaching certain levels. The property market loss 
assumed is US$30 billion or greater. Should the overall insured property loss be
between US$25 billion and US$30 billion, then the Group's share of the net loss 
will increase by approximately £4 million.


The credit-worthiness of underlying security has been reviewed by the Directors.
Approximately 98 per cent. of Amlin's estimated reinsurance recoveries is due 
from counterparties which are rated A or better by Standard & Poor's. Included 
in the estimated reinsurance recoveries is an amount of US$99 million due from 
companies which authorised Fortress Re, Inc., a North Carolina, USA based 
managing general agent, to bind reinsurance in their names. The authority given 
to Fortress Re has been cancelled following the events of 11 September 2001 and 
the Directors believe that there may be disputes between Fortress Re and the 
insuring companies, namely the Nissan Fire and Marine Insurance Company, the 
Taisei Fire and Marine Insurance Company and Aioi Insurance Company. Syndicate 
2001 did not accept security (other than an exposure limited to £200,000) from 
the Taisei Fire and Marine Insurance Company in its 2001 year of account 
reinsurance programme and the Directors believe that the security of the other 
two companies remains sufficiently strong.


Other key assumptions include:



(*)         the terrorist attacks leading to the collapse of the World Trade 
Center towers in New York were one occurrence;



(*)         the Washington and Pittsburgh losses were two further distinct 
occurrences;



(*)         there will be no material failures of reinsurance security;



(*)         all reinsurers will reinstate reinsurance cover in accordance with 
the relevant contract provision;



(*)         there will be no material contractual disputes with any reinsurers;



(*)         there will be no subrogation recoveries or financial support from 
third parties, including the US government or associated agencies; and



(*)         war exclusions on policies do not apply and all of the occurrences 
were caused by terrorist action.






DEFINITIONS


The following definitions apply throughout this announcement, unless the context
requires otherwise:




the 'Act' or the 'Companies Act'             the Companies Act 1985, as amended

'Admission'                                  the admission of the Nil Paid      
                                             Rights (i) to the official list of 
                                             the UK Listing Authority and (ii)  
                                             to trading on the London Stock     
                                             Exchange's market for listed       
                                             securities becoming effective in   
                                             accordance with the Listing Rules

'Amlin Share Option Schemes'                 The Murray Lawrence Discretionary  
                                             Share Option Scheme 1997, the      
                                             Murray Lawrence Discretionary Share
                                             Option Scheme 1998, the Amlin      
                                             Executive Share Option Schemes     
                                             1997, and the Amlin Savings-Related
                                             Share Option Scheme 1998 and the   
                                             Amlin Share Bonus Plan. The
                                             Amlin Executive Share Option       
                                             Schemes 1997 comprise the Amlin    
                                             Inland Revenue Approved Share      
                                             Option Scheme 1997 and the Amlin   
                                             Unapproved Share Option Scheme 1997

'Amlin Shares'                               ordinary shares of 25 pence each in
                                             the capital of the Company

'Articles of Association' or 'Articles'      the articles of association of the 
                                             Company

'Board'                                      the board of Directors of the      
                                             Company

'Certificated' or 'Certificated Form'        not in Uncertificated Form

'Company' or 'Amlin'                         Amlin plc

'Computershare'                              Computershare Investor Services PLC

'CREST'                                      the relevant system for the        
                                             paperless settlement of trades and 
                                             the holding of uncertificated      
                                             securities operated by CRESTCo     
                                             Limited in accordance with the 
Regulations

'CRESTCo'                                    CRESTCo Limited the operator of    
                                             CREST

'Directors'                                  the directors of the Company at the
                                             date of this announcement whose    
                                             names are set out in paragraph 5(a)
                                             of Part 5 of the Prospectus        
                                             expected to be posted to           
                                             shareholders today.

'Extraordinary General Meeting'              the extraordinary general meeting  
                                             of the Company convened for 14     
                                             January 2002, notice of which is   
                                             set out at the end of this document

'FSA'                                        the Financial Services Authority

'Form of Proxy'                              the form of proxy sent to          
                                             Shareholders with this document

'Group'                                      the Company and its subsidiary     
                                             undertakings

'Hoare Govett'                               Hoare Govett Limited whose office  
                                             in the United Kingdom is at 250    
                                             Bishopsgate, London EC2M 4AA

'Listing Rules'                              the rules and regulations made by  
                                             the UK Listing Authority under Part
                                             VI of the Financial Services and   
                                             Markets Act 2000 (as amended from  
                                             time to time)

'London Stock Exchange'                      London Stock Exchange plc

'Managed Syndicates'                         Syndicate 902, Syndicate 1141 and  
                                             Syndicate 2001, all of which are   
                                             managed by Amlin Underwriting      
                                             Limited

'New Amlin Shares'                           59,582,887 new Amlin Shares to be  
                                             issued pursuant to the Rights Issue

'Nil Paid Rights'                            rights to acquire the New Amlin    
                                             Shares, nil paid

'Official List'                              the Official List of the UK Listing
                                             Authority

'Overseas Shareholders'                      Shareholders who are resident in,  
                                             or who are citizens of, or who have
                                             registered addresses in,           
                                             territories other than the
                                             United Kingdom and Shareholders who
                                             are US persons

'Provisional Allotment Letters'              the renounceable provisional       
                                             allotment
                                             letters to be despatched to        
                                             Qualifying Shareholders (other     
                                             than, subject to
                                             certain exceptions, Overseas       
                                             Shareholders with registered       
                                             addresses in the United States,    
                                             Australia, Canada, Japan, New      
                                             Zealand, the Republic of Ireland or
                                             South Africa) in respect of the New
                                             Amlin Shares to be provisionally   
                                             allotted to them pursuant to the   
                                             Rights Issue

'Qualifying Shareholders'                    holders of Amlin Shares on the     
                                             Company's  register of Shareholders
                                             at the Record Date

'Record Date'                                close of business on 9 January 2002

'Regulations'                                the Uncertificated Securities      
                                             Regulations 1995 (SI 1995/3272), as
                                             amended

'Resolutions'                                the resolutions set out in the     
                                             notice of Extraordinary General    
                                             Meeting at the end of the          
                                             Prospectus expected to be posted to
                                             shareholders today

'Rights'                                     rights to acquire New Amlin Shares 
                                             in the Rights Issue

'Rights Issue'                               the proposed issue to Qualifying   
                                             Shareholders of New Amlin Shares by
                                             way of rights on the basis of 2 New
                                             Amlin Shares for every 7 existing  
                                             Amlin Shares held on the Record    
                                             Date on the terms and subject to   
                                             the conditions contained or        
                                             referred to in this document and in
                                             the Provisional Allotment Letters

'Rights Issue Price'                         77 pence per New Amlin Share

'Shareholders'                               holders of Amlin Shares

'UK Listing Authority'                       the Financial Services Authority in
                                             its capacity as competent authority
                                             under the Financial Services and   
                                             Markets Act 2000

'Uncertificated' or 'Uncertificated Form'    Amlin Shares recorded on the       
                                             Company's register of Shareholders 
                                             as being held in uncertificated    
                                             form, title to which by virtue of  
                                             the Regulations may be transferred 
                                             by means of an instruction issued  
                                             in accordance with the rules of 
CREST

'Underwriting Agreement'                     the agreement dated 20 December    
                                             2001 between the Company and Hoare 
                                             Govett, details of which are set   
                                             out in paragraph 8(g) of Part 5 of 
                                             the Prospectus expected to be      
                                             posted to shareholders today.

'United Kingdom' or 'UK'                     the United Kingdom of Great Britain
                                             and  Northern Ireland

'United States' or 'US'                      the United States of America, its  
                                             territories and possessions and any
                                             state of the United States and the 
                                             District of Columbia

'US person'                                  has the meaning provided in section
                                             902(k) of Regulation S under the US
                                             Securities Act

'US Securities Act'                          the United States Securities Act of
                                             1933



GLOSSARY


This glossary sets out some of the commonly used terms and expressions relating 
to Lloyd's and London Insurance markets:

'capacity'                             underwriting capacity or stamp capacity, 
                                       as the context requires


'capital loading'                    adjustments to the theoretical risk based  
                                     capital, made to arrive at the actual risk 
                                     based capital, having regard for the
                                     specific syndicate's history and record

'cash call'                          a demand for further cash funding by a     
                                     syndicate in order to provide capital to   
                                     support continued underwriting after a     
                                     large loss or losses have eroded the       
                                     original capital in place to support that  
                                     syndicate's underwriting

'combined ratio'                     the ratio of the total of incurred claims  
                                     and costs (including acquisition costs),   
                                     net of all reinsurance effects, to gross   
                                     premiums

'corporate member'                   a member of Lloyd's which is a body        
                                     corporate or a Scottish limited partnership

'Council'                            the Council of Lloyd's and any person or   
                                     delegate acting under its authority,       
                                     including the Lloyd's Market Board and the 
                                     Lloyd's Regulatory Board

'Equitas'                            Equitas Reinsurance Limited, the company   
                                     into which all non-life liabilities in     
                                     relation to 1992 and Prior Business have   
                                     been reinsured

'Funds at Lloyd's'                   funds held in trust at Lloyd's to support a
                                     member's underwriting activities

'LATFs'                              Lloyd's American Trust Funds

'Lloyd's'                            the Society and Corporation of Lloyd's     
                                     created and governed by the Lloyd's Act    
                                     1871 - 1982

'managing agent'                     an underwriting agent which is listed as a 
                                     managing agent on the register of          
                                     underwriting agents maintained under the
                                     Underwriting Agents Byelaw (No. 4 of 1984) 
                                     and which is responsible for
                                     managing a syndicate and, among other      
                                     things, employing the active underwriter

'member' or 'member of Lloyd's'      except where the context otherwise         
                                     requires, an underwriting member at Lloyd's

'members' agent'                     an underwriting agent which is listed as   
                                     members' agent on the register of          
                                     underwriting agents maintained under the   
                                     Underwriting Agents Byelaw (No. 4 of 1984) 
                                     and which is appointed by a member to      
                                     administer his underwriting affairs at     
                                     Lloyd's, especially to place him on        
                                     syndicates

'Name' or 'individual member'        an individual carrying on underwriting     
                                     business as a member of Lloyd's with       
                                     unlimited liability

'naturally open year of account'     a year of account that has not reached the 
                                     date of its normal closure by reinsurance  
                                     to close

'New Central Fund'                   a fund established pursuant to the Central 
                                     Fund Byelaw (No. 23 of 1996) by Lloyd's    
                                     primarily as a policyholders' protection
                                     fund in the event of a member being unable 
                                     to meet his/its underwriting liabilities.  
                                     The New Central Fund may also be used, with
                                     certain exceptions, for any purpose which  
                                     may appear to the Council to further any   
                                   of the objects of Lloyds's

'Premiums Trust Fund'                the trust fund into which all premiums     
                                     received by or on behalf of the members    
                                     must be placed and which is available for
                                     payment of claims, reinsurance premiums,   
                                     syndicate expenses and, when the relevant  
                                     year of account has been closed, profits

'1992 and Prior Business'            all liabilities under contracts of         
                                     insurance(whether direct or otherwise) or  
                                     reinsurance underwritten at Lloyds (other  
                                     than long term business as defined in the  
                                     Insurance Companies Act 1982) and
                                     originally allocated to the 1992 year of   
                                     account or any earlier year of account     
                                      including, without limitation, any such   
                                     liabilities reinsured to close into the    
                                     1993 or any later year of account, but     
                                     excluding any liabilities re-signed, or    
                                     reallocated pursuant to a premium transfer,
                                     into the 1993 or later year of account

'open year'                          a year of account of a syndicate prior to  
                                     its usual date for closure by reinsurance  
                                      to close

'Reconstruction and Renewal Plan'    the plan for the reconstruction and renewal
                                     of Lloyd's described in the document       
                                     entitled 'Lloyd's: reconstruction and      
                                      renewal' sent by Lloyd's to Names in May  
                                     1995, as developed and finally incorporated
                                    into the Settlement Offer which was sent to 
                                    Names on 30 July 1996

'reinsurance'                        the insurance of contractual liabilities   
                                     incurred under contracts of insurance or 
reinsurance

'reinsurance to close' or 'RITC'     a reinsurance agreement under which
                                     underwriting members who are members of a  
                                     syndicate for a year of account to be      
                                     closed are reinsured, by underwriting      
                                     members who comprise that or another       
                                     syndicate for a later year of account or by
                                     an insurance company designated by the     
                                     Council, against all liabilities arising   
                                     out of insurance business underwritten by  
                                     the reinsured syndicate

'retrocessional'                     reinsurance of a reinsurer

'Settlement Offer'                   the document sent to Names on 30 July 1996 
                                     incorporating the Reconstruction and       
                                     Renewal Plan in its final form

'solvency ratio'                     the ratio of net premiums to regulatory    
                                     capital for an insurer

'stamp capacity'                     the maximum amount of premium income which 
                                     the members of a syndicate together may    
                                     accept in a given year of account

'subrogation'                        the process through which an insurer can   
                                     reduce the financial impact of claims made 
                                     against it by seeking and agreeing         
                                    recoveries from other parties, including    
                                    other insurers, if the loss which has given 
                                    rise to the claim was caused by a third     
                                    party

'syndicate'                          a group of members of a single corporate   
                                    member underwriting insurance business at   
                                    Lloyd's through the agency of a managing    
                                    agent to which a particular syndicate number
                                   is assigned by or with the authority of the  
                                   Council

'underwriting capacity'             the premium limit which determines the      
                                   maximum amount of business which a member may
                                   underwrite, based on the level of his funds  
                                   at Lloyd's, in any year of account

'year of account'                  an accounting year at Lloyd's,               
                                   corresponding with the calendar year, by     
                                   reference to which policies are allocated and
                                   accounts drawn up