Insurance Agreement

Proportional Excess of Loss Reinsurance Agreement

by Everest Re Group, Ltd.
October 3rd, 2000

                                                                    Exhibit 10.2


                                 Execution Copy

                PROPORTIONAL EXCESS OF LOSS REINSURANCE AGREEMENT

                  (hereinafter referred to as the "Agreement")

                                     between

               GIBRALTAR CASUALTY COMPANY, a Delaware Corporation

                   (hereinafter referred to as the "Company")

                                       and

   PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, an Indiana Corporation
                  (hereinafter referred to as the "Reinsurer")

          (Both the Company and the Reinsurer collectively are referred
                to as the "Parties" and individually as "Party")

WHEREAS,  The  Prudential  Insurance  Company  of  America ("Prudential") is the
ultimate parent of the Reinsurer;

WHEREAS  Prudential  and  Everest   Reinsurance   Holdings,   Inc.,  a  Delaware
corporation  ("Holdings"),  have executed a Stock Purchase Agreement dated as of
February  24,  2000 ("Sale  Agreement")  wherein  Holdings  will  purchase  from
Prudential  all issued and  outstanding  shares of the  Company,  a wholly owned
subsidiary of  Prudential,  effective as of the "Closing  Date" set forth in the
Sale Agreement.

WHEREAS,  as of the  "Closing  Date,"  as  this  term  is  defined  in the  Sale
Agreement,  the Company has outstanding  "Loss Reserves," as defined in the Sale
Agreement,  relating to all Policies, as defined herein, in the amount stated in
the "Closing Date Financial Statement," as defined in the Sale Agreement.

WHEREAS,  the Company  also has  potential  adverse  Loss  Reserves  development
("Adverse  Loss  Development"),  as  defined  herein,  and the  Company  desires
reinsurance coverage for such Adverse Loss Development.

NOW,   THEREFORE,   in  consideration  of  mutual  covenants,   representations,
warranties,  and  agreements  contained  herein and in the Sale  Agreement,  the
Parties agree as follows:


ARTICLE I - CLASSES OF BUSINESS COVERED

A.            By this  Agreement  and  subject to the terms and  conditions  set
              forth below, the Reinsurer agrees to indemnify the Company for the
              Adverse Loss  Development that may accrue to the Company under all
              policies,  contracts,  and  binders of  insurance  or  reinsurance
              (hereinafter "Policies") issued or renewed by the Company prior to
              the Closing Date.

B.            Adverse Loss Development is defined as the Company's  Ultimate Net
              Loss that is in excess of the Loss Reserves carried by the Company
              at the Closing Date. Subject to the Reinsurer's Limit of Liability
              set forth in Article V hereof,  the Reinsurer  shall reimburse the
              Company  for  the  Adverse  Loss Development  paid by the Company,
              provided that the Company has paid an  amount  equal  to  the Loss
              Reserves carried by  the  Company  at the Closing Date.  Provided,
              however, that this Agreement  shall  not  apply  to the first four
              million dollars  ($4,000,000)  of any  Settlement  Concessions  on
              Gibraltar-Sourced  Business,  as those  terms  are defined  in the
              Quota Share Reinsurance  Agreement  between  the  Parties  ("Quota
              Share Reinsurance Agreement"), in excess of Settlement Concessions
              listed on Schedule A to the Quota Share Reinsurance Agreement.

C.            "Ultimate Net Loss" is defined as the Company's  determination  of
              the sum or sums (including Loss  Adjustment  Expenses,  as defined
              herein)  incurred  by the Company in  settlement  of claims and in
              satisfaction of judgments rendered on account of such claims under
              all Policies,  after  deduction of all  reinsurance  and insurance
              recoveries and  subrogation and salvage  recoveries  collected and
              received by the Company and losses paid prior to the Closing Date.
              Nothing  herein  shall be construed to mean that losses under this
              Agreement are not  recoverable  until the  Company's  Ultimate Net
              Loss has been  ascertained.  Ultimate  Net Loss shall not  include
              Loss in Excess of Policy Limits or Extra  Contractual  Obligations
              (as defined herein) incurred by the Company.

ARTICLE II - COMMENCEMENT AND TERMINATION

A.            This  Agreement  shall  become  effective on the Closing Date  and
              shall continue in force  thereafter  until two (2) years after the
              earlier of  when  (i)  the  Company  settles  all claims under all
              Policies, or (ii) the  Reinsurer  exhausts its Limits of Liability
              as set forth in Article V.

B.            Neither Party may terminate this Agreement.

ARTICLE III - TERRITORY

The  territorial  scope  of this  Agreement  shall be  identical  to that of the
Policies reinsured hereunder.


ARTICLE IV - CONSIDERATION

The consideration for the reinsurance  coverage is deemed paid as of the Closing
Date and, with respect to the Reinsurer,  includes,  among other things, certain
operational  and other  assistance (i)  previously  provided to the Reinsurer by
Prudential, which is deemed paid as of the Closing Date, and (ii) to be provided
to the  Reinsurer in connection  with this  Agreement by  Prudential,  including
pursuant to the Keepwell  Agreement between Prudential and the Reinsurer of even
date herewith. No further consideration shall be due to the Reinsurer.

ARTICLE V - REINSURER'S LIMIT OF LIABILITY AND COMPANY'S RETENTION

The Reinsurer  shall pay to the Company an 80% quota share interest of the first
two hundred million dollars  ($200,000,000)  of Adverse Loss Development paid by
the Company, with the Reinsurer's maximum liability under this Agreement limited
to one  hundred  and sixty  million  dollars  ($160,000,000).  The  Company  may
reinsure its 20% quota share  retention in the first two hundred million dollars
($200,000,000)  of Adverse Loss  Development  only with an affiliate  within its
insurance  holding  company  system,  with  `affiliate'  and `insurance  holding
company system' having the meanings set forth under Section 5001 of the Delaware
Insurance  Code.  Such  reinsurance by the Company of any share of its 20% quota
share retention with an affiliate is permissible only if the assuming  affiliate
fully retains and does not further cede or retrocede any share of its assumption
of the 20% quota share  retention,  except to another  affiliate of the Company;
and any  affiliate of the Company  which assumes some share of the Company's 20%
quota  share  retention  under  this  provision  shall  be  subject  to the same
prohibition on ceding or retroceding  any share of the Company's 20% quota share
retention to any person or entity that is not an affiliate of the Company.

ARTICLE VI - LOSS IN EXCESS OF POLICY LIMITS/EXTRA CONTRACTUAL OBLIGATIONS

Ultimate Net Loss shall not include any amounts that the Company pays or is held
liable to pay in excess of its Policy limit,  but otherwise  within the terms of
its Policy  ("Loss in Excess of Policy  Limits"),  or any  punitive,  exemplary,
compensatory or consequential damages ("Extra Contractual Obligations"), because
of  alleged  or  actual  bad  faith or  negligence  on its part in  rejecting  a
settlement within Policy limits, or in discharging its duty to defend or prepare
the  defense  in  the  trial  of  an  action  against  its  policyholder,  or in
discharging  its duty to prepare or prosecute an appeal  consequent upon such an
action, or in otherwise handling a claim under a Policy.

ARTICLE VII - OTHER REINSURANCE

Subject  always to the retention  provision set forth in Article V above,  on or
after  the  Closing  Date,  the  Company  shall be  permitted  to  obtain  other
reinsurance,  recoveries  under which  shall inure  solely to the benefit of the
Company  and all  recoveries  under such  other  reinsurance  shall be  entirely
disregarded  in applying  all of the  provisions  of this  Agreement;  provided,
however,  that the Quota Share Reinsurance  Agreement shall inure to the benefit
of this Agreement.


ARTICLE VIII - LOSS ADJUSTMENT EXPENSES

Loss  Adjustment  Expenses  shall include both  allocated and  unallocated  loss
expenses and shall be included in the Ultimate Net Loss,  and are defined as all
expenses of the Company,  including  expenses for declaratory  judgment actions,
monitoring of underlying  litigation or claims, and coverage opinions,  incurred
by the Company in the settlement,  investigation,  defense, or adjustment of all
claims under all Policies.

ARTICLE IX - SUBROGATION AND SALVAGE

The  Reinsurer  shall be credited  with  subrogation  and salvage  collected and
received by the Company,  less the actual cost,  excluding salaries and expenses
of  officials  and  employees  of the  Company  respecting  their  time spent on
subrogation and salvage  recoveries and also excluding sums paid to any attorney
as a retainer  in  obtaining  such  reimbursement  or making such  recovery,  on
account of claims and settlements  involving the reinsurance coverage hereunder.
Enforcement of subrogation and salvage rights shall be determined  solely by the
Company.

ARTICLE X - ORIGINAL CONDITIONS

A.            The  Reinsurer  shall  follow  the  fortunes of the Company for it
              Ultimate  Net  Loss  for  all  loss  settlements  and shall pay as
              paid by the Company.

B.            The reinsurance coverage  provided  under  this Agreement shall be
              subject  to  all  interpretations,  modifications,  waivers,   and
              alterations  of  the  Policies;   provided,   however,   that  the
              agreements set forth on Exhibit A  hereto  that are in force as of
              the   Closing   Date  shall  remain,  or  shall  for  purposes  of
              determining  the   parties'  rights  and  obligations  under  this
              Agreement be deemed to have remained,  in force during the term of
              this  Agreement  and shall not be  modified  or  altered, or shall
              for  purposes  of  determining the parties' rights and obligations
              under  this  Agreement  be  deemed  not  to have been  modified or
              altered, during the  term  of  this  Agreement,  unless  otherwise
              mutually agreed by the Parties.

C.            Nothing  herein  shall in  any manner  create any  obligations  or
              establish any rights against the Reinsurer in favor of  any  third
              party or any person not a Party to this Agreement.

ARTICLE XI - REPORTS AND REMITTANCES

A.            The first statement of account shall be due to the Reinsurer  from
              the Company forty-five  (45) days  after  the  close of the  first
              fiscal quarter that includes the Closing Date.

B.            Thereafter,  the  Company  shall  submit  quarterly  statements of
              account  ("quarterly  reports")  within forty-five (45) days after
              the end of each calendar quarter.


C.            Such   quarterly   reports   shall  be  sent  by   both  facsimile
              transmission  and  United  States  Postal  Service  or  any  other
              delivery service used by the Company.

D.            Such quarterly  reports  shall be in the form  attached  hereto as
              Exhibit B, or in any other  form  mutually  agreed by the Parties.

E.            Remittances  shall  be  on  a "Net Basis," defined as amounts owed
              between the Parties under this Agreement.

F.            Remittances shall be due to the Company from the Reinsurer  within
              forty-five (45) days from the date of  receipt  of  the  facsimile
              transmission of each quarterly report.

G.            Failure  of  a  Party  to  pay  amounts  owed  when due under this
              Agreement shall result in imposition  on that Party of an interest
              penalty equal  to  the  rate of interest  announced  by  Citibank,
              N.A. as  its prime or  base  rate  as  of  the  due  date  of  any
              remittance, calculated on the basis of the  actual number of  days
              elapsed past the due date of  any  remittance  divided  by  three-
              hundred-and-sixty-five (365) days and  payment  of  other  losses,
              costs, and expenses accrued or incurred by the  other  Party as  a
              result of the late payment.

ARTICLE XII - OFFSET

The  Company  and the  Reinsurer  shall have the right to offset any  balance or
amounts due from one Party to the other under this Agreement.

ARTICLE XIII - ACCESS TO RECORDS

A.            The Company shall place at the disposal  of the  Reinsurer  at all
              reasonable  times,  and  the  Reinsurer  will  have  the  right to
              inspect,  all  books,  records,  and  papers  of  the  Company  in
              connection with any  reinsurance  coverage hereunder or any claims
              in connection herewith.

B.            All  records  reviewed  by the  Reinsurer  are deemed  proprietary
              and confidential property of the Company. Further, unless pursuant
              to the express, written  permission of the Company,  the Reinsurer
              shall not  disclose  the contents of such information to any other
              person, persons, entity, or entities; provided, that the Reinsurer
              may disclose such information  or portions  thereof in  connection
              with any arbitration hereunder or any legal or regulatory process,
              or to its directors,  officers  and  employees  and the directors,
              officers  and  employees  of  its  affiliates  and  to its agents,
              representatives,  attorneys,  accountants,  auditors,   reinsurers
              (collectively, "the Reinsurer's Representatives"), in  each  case,
              who have a  legitimate  need to know such information (which would
              include, but not be limited to the right to dispute and/or  assess
              in  furtherance  of  a  dispute) and who are informed of and agree
              to be  bound  by the  confidentiality  terms  of  this  Agreement.
              The  Reinsurer  shall  indemnify and hold harmless the Company for
              all damages  resulting  from any  unauthorized  disclosure  by the


              Reinsurer or the Reinsurer's Representatives of  records  obtained
              pursuant to this  Article.  Nothing  contained  in this  Agreement
              shall be construed to prevent the Company from applying to a court
              of   competent   jurisdiction   for   equitable  relief  including
              injunction and specific performance as a remedy  if the  Reinsurer
              or any of the Reinsurer's Representatives  breach or  threaten  to
              breach any of the provisions of this Article. Without prejudice to
              the rights and remedies otherwise available at law  or  equity  to
              the Company, it is understood and agreed that  the  Company  would
              be  irreparably  injured by a breach of this Article,  that  money
              damages  would  not  be  a  sufficient  remedy  for  any actual or
              threatened breach of this Article by the  Reinsurer  or any of the
              Reinsurer's Representatives  and that the Company  shall  (without
              proof of actual damages) be entitled to equitable  relief.  In the
              event of litigation relating  to  this  Article,  if  a  court  of
              competent jurisdiction determines that the Reinsurer or any of the
              Reinsurer's Representatives  have breached this Article,  then the
              Reinsurer shall be liable and pay  to the Company  the  reasonable
              legal fees incurred by the Company in  connection with the subject
              litigation, including any appeal therefrom.

ARTICLE XIV - ERRORS AND OMISSIONS

Inadvertent delays, errors or omissions in connection with this Agreement or any
transaction  hereunder  shall not relieve  either Party of any  liability  which
would have  attached had such delay,  error or omission not  occurred,  provided
always  that such error or  omission  is  rectified  as soon as  possible  after
discovery.

ARTICLE XV - SECURITY

A.       If the  Company is or becomes  unable to take  credit in any  financial
         statement  filed  with  its  domiciliary  insurance  regulator  or with
         insurance  regulators  in New Jersey,  California or any other state in
         which it  currently  is  approved  as a surplus  lines  insurer (or any
         successors to said  regulators) for the reinsurance  coverage  provided
         hereunder,  or if Prudential's  Financial  Strength Rating published by
         A.M. Best becomes less than "A-," the  Reinsurer  agrees to fund within
         thirty (30) days from  receipt of notice from the Company  that funding
         is required  its share of Adverse  Loss  Development  (and to replenish
         such funding from time to time as necessary) by:

         1.   Clean, irrevocable and unconditional  letters of credit issued and
              confirmed, if confirmation is required by the insurance regulatory
              authorities  involved,  by  a  qualified  United  States financial
              institution  acceptable to said insurance regulatory authorities;

         2.   cash; and/or

         3.   a  Trust in compliance with the requirements of and  acceptable to
              said insurance regulatory authorities.


B.       With regard to funding in whole or in part by letters of credit,  it is
         agreed  that  each  letter of  credit  will be in a form that  would be
         acceptable to the Company's domiciliary insurance regulatory authority,
         will be  issued  for a term of at least  one year and will  include  an
         "evergreen  clause," that  automatically  extends the term for at least
         one additional  year at each  expiration  date unless written notice of
         non-renewal is given to the Company not less than 30 days prior to said
         expiration date. The Company and the Reinsurer  further agree that said
         letters of credit may be drawn upon by the Company or its successors in
         interest at any time,  without  diminution because of the insolvency of
         the Company or the Reinsurer, but only for one or more of the following
         purposes:

         1.   To reimburse itself for the Reinsurer's share of paid Adverse Loss
              Development, unless paid in cash by the Reinsurer;

         2.   To reimburse itself for the Reinsurer's share of any other amounts
              claimed to be due hereunder, unless paid in cash by the Reinsurer;

         3.   To  fund  a  cash  account in an amount  equal to the  Reinsurer's
              share  of  Adverse  Loss  Development  funded by means of a letter
              of  credit  that  is  under non-renewal  notice, if said letter of
              credit  has  not  been  renewed  or replaced by the  Reinsurer  10
              days prior to its expiration date;

         4.   To  refund  to  the  Reinsurer  any  sum  in excess of the  actual
              amount  required  to  fund  the Reinsurer's  share of Adverse Loss
              Development  and  other  amounts  claimed to be due hereunder,  if
              so requested by the Reinsurer.

C.       In the event the amount drawn by the Company on any letter of credit is
         in excess of the actual  amount  required for B (1), B (3) or B (4), or
         in the case of B (2),  the  actual  amount  determined  to be due,  the
         Company  shall  promptly  return to the  Reinsurer the excess amount so
         drawn.

D.       In the event of funding through a  Trust:

         1.   The  Reinsurer  shall  establish  a  Trust Account for the benefit
              of  the   Company  to  fund   the  amounts  receivable  under  the
              Agreement  in  a  qualified  United States  financial  institution
              reasonably  acceptable  to  the  Company  and  to  said  insurance
              regulatory authorities.

         2.   The  assets  deposited  into  the Trust  Account  shall  be valued
              according  to  their  current fair  market value and shall consist
              only  of  cash  (United  States  legal  tender),  certificates  of
              deposit  (issued  by  a  United  States bank and payable in United
              States legal  tender)  and  investments of  the  type permitted by
              and  acceptable to  said insurance  regulatory authorities  or any
              combination  of the  above,  provided  that such  investments  are
              issued by  an institution that is  not the  parent, subsidiary  or
              affiliate of either the Reinsurer or the Company;


         3.   The  Reinsurer,  prior  to  depositing  assets  with  the trustee,
              shall  execute  assignments,  endorsements  in  blank, or transfer
              legal  title  to  the  trustee of all shares,  obligations  or any
              other  assets  requiring  assignments,  in order that the Company,
              or  the  trustee   upon  the  Company's  direction,  may  whenever
              necessary   negotiate  any   such   assets   without  consent   or
              signature from the Reinsurer or any other entity;

         4.   All  settlements  of account between the Reinsurer and the Company
              shall be in cash or its equivalent;

         5.   The  assets  in   the  trust  account  may  be  withdrawn  by  the
              Company at  any  time,  notwithstanding  any  other  provisions in
              this  Agreement,  and  shall  be  utilized  by  the Company or any
              successor  by  operation  of  law,  including  without  limitation
              any  liquidator,  rehabilitator,  receiver  or  conservator of the
              Company,  for  the purposes  set forth  in  paragraphs  B(1) -B(4)
              above.

ARTICLE XVI - INSOLVENCY

In the  event  of  the  insolvency  of the  Company,  the  reinsurance  coverage
hereunder  shall  be  payable  directly  to the  Company  or to its  domiciliary
liquidator,  receiver,  conservator  or statutory  successor on the basis of the
amount of claim  allowed in the  insolvency  proceeding  without  diminution  by
reason of the  inability of the Company to pay all or any part of the claim.  It
is agreed,  however,  that the  liquidator,  receiver,  conservator or statutory
successor  of the Company  shall give  written  notice to the  Reinsurer  of the
pendency of a claim against the Company,  indicating  the Policy or bond covered
hereunder  which claim  would  involve a possible  liability  on the part of the
Reinsurer,   within  a  reasonable  time  after  such  claim  is  filed  in  the
conservation or liquidation  proceeding or in the receivership,  and that during
the  pendency  of such  claim,  the  Reinsurer  may  investigate  such claim and
interpose,  at its own  expense,  in the  proceeding  where  such claim is to be
adjudicated,  any defense or defenses that it may deem  available to the Company
or its liquidator,  receiver,  conservator or statutory  successor.  The expense
thus incurred by the Reinsurer  shall be chargeable,  subject to the approval of
the Court,  against  the  Company  as part of the  expense  of  conservation  or
liquidation to the extent of a pro rata share of the benefit which may accrue to
the Company solely as a result of the defense undertaken by the Reinsurer.

ARTICLE XVII - ARBITRATION

A.       Except  with  respect to  disputes  arising  solely out of or solely in
         connection with Article XIII above (Access to Records),  as a condition
         precedent to any right of action hereunder, in the event of any dispute
         or  difference  of  opinion  hereafter  arising  with  respect  to this
         Agreement,  including its formation and validity, it is hereby mutually
         agreed that such dispute or difference of opinion shall be submitted to
         arbitration.


B.       Except as provided  in  subsections  A. and D. of this  Article or with
         respect to judicial proceedings instituted in aid of arbitration,  this
         Article shall constitute a waiver of the Parties' rights to commence an
         action in any court of competent  jurisdiction in the United States, to
         remove  an  action  to a United  States  District  Court,  or to seek a
         transfer of a case to another court as might  otherwise be permitted by
         the laws of the United States or of any State or other  jurisdiction in
         the United States.

C.       One Arbiter shall be chosen by the Company, the other by the Reinsurer,
         and an Umpire  shall be chosen by the two  Arbiters  before  they enter
         upon arbitration,  all of whom shall be active or retired disinterested
         executive officers of United States domiciled  insurance or reinsurance
         companies.  In the event that  either  Party  should  fail to choose an
         Arbiter within 30 days  following a written  request by the other Party
         to do so, the  requesting  Party may choose two  Arbiters  who shall in
         turn choose an Umpire  before  entering  upon  arbitration.  If the two
         Arbiters  fail to agree upon the  selection of an Umpire within 30 days
         following  their   appointment,   each  Arbiter  shall  nominate  three
         candidates  within  10 days  thereafter,  two of whom the  other  shall
         decline, and the decision shall be made by drawing lots.

D.       The Arbiters and the Umpire ("the  Arbitration  Panel") shall  consider
         this Agreement as an honorable engagement rather than merely as a legal
         obligation,  and they are relieved of all judicial  formalities and may
         abstain from  following the strict rules of law. The majority  decision
         of the  Arbitration  Panel shall be final and binding on both  Parties.
         Judgment  upon the  final  decision  of the  Arbitration  Panel  may be
         entered in any court of competent jurisdiction.

E.       Except as provided in sub-section G. of this Article,  each Party shall
         bear the expense of its own Arbiter, and shall jointly and equally bear
         with the other the expense of the Umpire and of the arbitration. In the
         event that the two Arbiters are chosen by one Party, as above provided,
         the expense of the Arbiters,  the Umpire and the  arbitration  shall be
         equally divided between the two Parties.

F.       Any  arbitration  pursuant to this  Article  shall be  conducted in New
         York,  New York  unless  otherwise  agreed  by the  parties;  provided,
         however,  that the Arbitration Panel may choose to take evidence and/or
         convene a hearing in a place other than New York for the convenience of
         the parties, the witnesses or the Arbitration Panel.

G.       The  Arbitration  Panel shall have the power to  award costs, expenses,
         and interest to the prevailing Party in an arbitration.

ARTICLE XVIII - SERVICE OF SUIT

A.       It is agreed that in the event of the failure of the  Reinsurer  to pay
         any amount  claimed to be due  hereunder  or to  otherwise  perform its
         obligations  hereunder,  the  Reinsurer  will,  at the  request  of the
         Company,   submit  to  the  jurisdiction  of  any  court  of  competent


         jurisdiction  within the State of New Jersey or such other jurisdiction
         within the United States as the Company can select as a forum, and will
         comply with all requirements  necessary to give such court jurisdiction
         and all matters  arising  hereunder  shall be  determined in accordance
         with the law and practice of such court.

B.       Service of process in such suit may be made on the Reinsurer by serving
         the  Commissioner  of Insurance  of the State of New Jersey,  who shall
         forward such process to the Reinsurer in accordance  with Article XXIII
         or at such other  address as the Reinsurer  shall  advise.  In any suit
         instituted,  the  Reinsurer  will abide by the final  decision  of such
         court.

C.       Further,  pursuant to any statute of any state,  territory, or district
         of the United States of America which makes provisions  therefore,  the
         Reinsurer herein hereby designates the superintendent,  commissioner or
         director of insurance or other  officer  specified  for that purpose in
         the statute,  or his successor or successors in office, as its true and
         lawful  attorney  upon whom may be served  any  lawful  process  in any
         action, suit or proceeding instituted by or on behalf of the Company or
         any beneficiary  hereunder arising out of this Agreement of reinsurance
         and hereby designates the above-named person to whom the said office is
         authorized to mail such process or a true copy thereof.

D.       This Article is not meant to supersede  Article XVII of this  Agreement
         or override the obligation of the parties to arbitrate  their  disputes
         in accordance with Article XVII.

ARTICLE XIX - ENTIRE AGREEMENT

This  Agreement,  the Sale Agreement and the Guaranty,  and any exhibits to such
agreements,  collectively  constitute the entire  agreement  between the Parties
regarding  the subject  matter hereof and  supercede  all prior  agreements  and
understandings,  both  written and oral and do not confer any rights or remedies
to any other party or any other person.

ARTICLE XX - AMENDMENTS AND ALTERATIONS

This Agreement shall not be changed,  supplemented,  modified, or amended except
by an endorsement/addendum signed by the Parties and attached hereto.

ARTICLE XXI - NO WAIVER

No  forbearance  to enforce any provision or right  hereunder  shall be deemed a
waiver thereof, and no waiver of any breach of any term or covenant herein shall
be construed  as a waiver of any other breach of the same,  or any other term or
covenant herein.


ARTICLE XXII - CONSTRUCTION

This Agreement is the result of arms-length negotiations between the Parties and
has been  prepared  jointly by the  Parties.  In applying and  interpreting  the
provisions  of this  Agreement,  there shall be no  presumption  that either the
Company or the Reinsurer  prepared this Agreement,  or that this Agreement shall
be construed in favor of or against either the Company or the Reinsurer.

ARTICLE XXIII - NOTICES

Any notice or other  communication  required or permitted  hereunder shall be in
writing  and  shall  be  delivered  personally,  telegraphed,  telexed,  sent by
facsimile  transmission,  or sent by  certified,  registered  or  express  mail,
postage prepaid, to:

         If to the Reinsurer, to:

         Richard Green,
         Vice President
         Prudential Property and Casualty Insurance Company
         23 Main St., 4th Floor
         Holmdel, NJ  07032
         Phone: 732-946-5082
         Fax:   732-946-5029

         with a copy to:

         Doreen Faga
         President, Gibraltar Operations
         The Prudential Insurance Company of America
         Eisenhower Corporate Center, Building 3
         290 West Mt. Pleasant Avenue
         Livingston, NJ  07039
         Phone: 973-548-5980
         Fax:   973-548-5950


         If to the Company, to:

         Janet J. Burak
         Senior Vice President and General Counsel
         Everest Reinsurance Holdings
         477 Martinsville Road
         P.O. Box 830
         Liberty Corner, NJ  07938
         Phone: 908-604-3170
         Fax:   908-604-3450


or in each case to such  other  address as a party may  designate  for itself by
like notice to the other party.

ARTICLE XXIV - GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York.

IN WITNESS  WHEREOF,  the Company,  by its duly authorized  representative,  has
executed this Agreement as of the date undermentioned at:

Livingston, New Jersey, this 19th day of September 2000.

/S/  DOREEN FAGA
     ---------------------------------
     Doreen Faga
     President, Gibraltar Casualty Co.


IN WITNESS WHEREOF, the Reinsurer,  by its duly authorized  representative,  has
executed this Agreement as of the date undermentioned at:

Holmdel, New Jersey, this 19th day of September 2000.

/S/  RICHARD M. GREEN
     ---------------------------------
     Richard M. Green


                                   EXHIBIT A

Aggregate  Stop  Loss  Retrocession  Agreement  between  Prudential  Reinsurance
Company and Gibraltar Casualty Company (effective 10/6/95)

Quota  Share  Reinsurance  Agreement  issued to  Gibraltar  Casualty  Company by
Prudential  Reinsurance  Company  (dated  May 1, 1985)  (Gibraltar's  cession to
Prudential Reinsurance for MUF eligible business)

Direct Excess Quota Share Reinsurance  Agreement between Prudential  Reinsurance
Company and Gibraltar Casualty Company (effective January 1, 1986)

Quota Share Reinsurance  Agreement between  Prudential  Reinsurance  Company and
Gibraltar Casualty Company ("Med Mal") effective 1/1/89

MUF  Commutation  Agreements  between  Gibraltar  Casualty  Company,  Prudential
Reinsurance Company and various MUF participants executed between 1985 and 1987,
the "MUF Buybacks"