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Platinum Underwriters Holdings Ltd – ‘10-K’ for 12/31/02 – EX-2.1

On: Monday, 3/31/03, at 12:46pm ET · For: 12/31/02 · Accession #: 950123-3-3615 · File #: 1-31341

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/31/03  Platinum Underwriters Holdin… Ltd 10-K       12/31/02   70:6.9M                                   RR Donnelley/FA

Annual Report — Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Platinum Underwriters Holdings, Ltd.                 138    768K 
 2: EX-2.1      Formation and Separation Agreement                   301   1.41M 
 3: EX-3.2      Restated Bye-Laws                                     54    170K 
 4: EX-4.1      Form of Certificate of Common Shares                   2     20K 
 5: EX-4.2      Indenture                                             75    361K 
 6: EX-4.3      Indenture Supplement                                  20     83K 
 7: EX-4.4      Purchase Contract Agreement                          125    487K 
 8: EX-4.5      Pledge Agreement                                      43    179K 
 9: EX-4.6      Form of Senior Note                                   13     58K 
10: EX-4.7      Form of Guarantee                                      3     25K 
11: EX-4.8      Form of Normal Unit                                   17     74K 
12: EX-4.9      Form of Stripped Unit                                 16     65K 
13: EX-10.1     Share Unit Plan for Non-Employee Directors             6     34K 
16: EX-10.15    Letter Agreement                                       3     26K 
17: EX-10.16    364-Day Credit Agreement                              53    237K 
18: EX-10.17    Letter Amendment #1 to 364-Day Credit Agreement        3     25K 
19: EX-10.18    Letter Amendment #2 to 364-Day Credit Agreement        5     28K 
20: EX-10.19    Capital Support Agreement                             10     45K 
14: EX-10.2     2002 Share Incentive Plan                             13     67K 
21: EX-10.20    Capital Support Agreement                              4     25K 
22: EX-10.21    Registration Rights Agreement                         17     89K 
23: EX-10.22    Option Agreement                                      14     70K 
24: EX-10.23    Option Agreement                                      15     72K 
25: EX-10.24    Option Agreement                                      14     71K 
26: EX-10.25    Employee Benefits & Compensation Matters Agreement    29     79K 
27: EX-10.26    Master Services Agreement                             13     57K 
28: EX-10.27    U.K. Master Services Agreement                        18     64K 
29: EX-10.28    Runoff Services Agreement                             23    125K 
30: EX-10.29    U.K. Runoff Services Agreement                        18     65K 
15: EX-10.3     Capital Accumulation Plan                             11     57K 
31: EX-10.30    Underwriting Management Agreement                      9     31K 
32: EX-10.31    U.K. Underwriting Agency & Management Agreement       21     62K 
33: EX-10.32    U.K. Business Transfer Agreement                      59    163K 
34: EX-10.33    Intra-Group Asset Transfer Agreement                   6     24K 
35: EX-10.34    Transitional Trademark License Agreement              10     42K 
36: EX-10.35    Investment Agreement                                 325   1.50M 
37: EX-10.36    1st Amendment to Investment Agreement                  4     27K 
38: EX-10.37    Transfer Restrictions Reg. Righst & Standstill Agr    23    109K 
39: EX-10.38    Option Agreement                                      14     69K 
40: EX-10.39    Services & Capacity Reservation Agreement              8     40K 
41: EX-10.40    100% Quota Share Retrocession Agreement              110    618K 
42: EX-10.41    100% Quota Share Retrocession Agreement               41    149K 
43: EX-10.42    100% Quota Share Retrocession Agreement               44    157K 
44: EX-10.43    100% Quota Share Retrocession Agreement               42    151K 
45: EX-10.44    100% Quota Share Retrocession Agreement               42    154K 
46: EX-10.45    100% Quota Share Retrocession Agreement               42    153K 
47: EX-10.46    100% Quota Share Retrocession Agreement               36    131K 
48: EX-10.47    100% Quota Share Retrocession Agreement               41    152K 
49: EX-10.48    100% Quota Share Retrocession Agreement               43    171K 
50: EX-10.49    100% Quota Share Retrocession Agreement               41    153K 
51: EX-10.50    100% Quota Share Retrocession Agreement               41    153K 
52: EX-10.51    100% Quota Share Retrocession Agreement               43    157K 
53: EX-10.52    Uk 100% Quota Share Retrocession Agreement            85    397K 
54: EX-10.53    Uk 100% Quota Share Retrocession Agreement            42    156K 
55: EX-10.54    Uk 100% Quota Share Retrocession Agreement            42    159K 
56: EX-10.55    100% Quota Share Retrocession Agreement              114    387K 
57: EX-10.56    Security Agreement                                    20     79K 
58: EX-10.57    Control Agreement                                     31    111K 
59: EX-10.58    Discretionary Investment Advisory Agreement           14     57K 
60: EX-10.59    Revised & Amended Trust Agreement                     28     79K 
61: EX-10.60    Discretionary Investment Advisory Agreement           18     76K 
62: EX-10.61    Revised and Amended Trust Agreement                   26     73K 
63: EX-10.62    Discretionary Investment Advisory Agreement           18     77K 
64: EX-10.63    Letter Amend. to Revised & Amended Trust Agreement     2     22K 
65: EX-10.64    Quota Share Retrocession Agreement                   100    331K 
66: EX-10.65    Security Agreement                                    22     86K 
67: EX-10.66    Control Agreement                                     34    125K 
68: EX-10.67    Discretionary Investment Advisory Agreement           15     61K 
69: EX-99.1     Certification of CEO                                   1     17K 
70: EX-99.2     Certification of CFO                                   1     18K

EX-2.1 — Formation and Separation Agreement
Exhibit Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Adjustments Available Information Bermuda Business Business Arrangements Capitalization Certain Relationships and Related Transactions Certain Tax Considerations Change in Control Common Shares Critical Accounting Policies Description of Our Common Shares Description of the Equity Security Units Dilution Dividend Policy Employee Benefits and Compensation Matters Agreement Enforceability of Civil Liabilities Under United States Federal Securities Laws and Other Matters Excluded Classes Exhibits and Financial Statement Schedules Experts Finite Risk Formation and Separation Agreement Geographic Diversification Global Casualty Income Tax Indemnification and Waiver Indemnification of Directors and Officers Index to Consolidated Financial Statements and Financial Information Investment Agreement Investments Limitation on Voting Rights Liquidity and Capital Resources Losses and loss adjustment expenses Management Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results Miscellaneous Net Premiums Earned Net premiums written Number and Terms of Directors Other Expenses of Issuance and Distribution Our Business Our Facilities Passive Foreign Investment Companies Platinum Bermuda Platinum Holdings Platinum's Strategy Platinum UK Platinum US Predecessor Business, The Pre-emptive Rights Pro Forma Combined Statements of Underwriting Results for the six months ended June 30, 2002 and 2001, and the year ended December 31, 2001 Pro Forma Financial Information Proposed Limits on Concentration of Reinsurance Exposures Prospectus Prospectus Summary Quota Share Retrocession Agreements Recent Sales of Unregistered Securities Registration Rights Registration Rights Agreement with St. Paul Regulation RenaissanceRe Investment, The RenaissanceRe Option RenaissanceRe Option Agreement Restrictions on Dividend Payments from our Operating Subsidiaries Restrictions on Transfer Risk Factors RPII Companies Section 10.01 General Cross Indemnification Section 10.02 Registration Statement Indemnification and Contribution Section 10.03 Limitations on Indemnification Obligations Section 10.04 Procedures for Indemnification of Third Party Claims Section 10.05 Remedies Cumulative Section 10.06 Survival of Indemnities Section 1.01 Definitions Section 1.02 Other Definitional Provisions Section 11.01 Access to Information Section 11.02 Retention of Records Section 11.03 St. Paul Confidential Information Section 11.04 Further Assurances; No Agency; Specific Performance Section 12.01 Pre-Emptive Rights Section 12.02 Share Buy-Back Programs Section 12.03 Transfer Restrictions; Standstill Provisions Section 13.01 Survival Section 13.02 Governing Law; Dispute Resolution Section 13.03 Notices Section 13.04 Amendment and Modification Section 13.05 Successors and Assigns Section 13.06 No Third Party Beneficiaries Section 13.07 Headings Section 13.08 Severability Section 13.09 Waiver Section 13.10 Expenses Section 13.11 Public Announcement Section 13.12 Entire Agreement Section 13.13 Assignment of this Agreement Section 13.14 Counterparts Section 13.15 Limit on Recovery from Company Directors and Officers Section 2.01 Transfer of Assets Section 2.02 Renewal Rights Information Section 2.03 Joint Ownership Section 2.04 Assumption and Retention of Liabilities Section 2.05 St. Paul Investment Section 2.06 Third Party Consents Section 3.01 Ancillary Agreements Section 3.02 Payment of Expenses Section 3.03 Closing Section 3.04 Closing Deliveries by St. Paul Section 3.05 Closing Deliveries by the Company Section 3.06 Subsequent Exercise of Over-Allotment Option Section 4.01 Settlement of Intercompany Accounts Section 4.02 Removal of Platinum US from Intercompany Agreements and Representation Section 4.03 Discontinuing of Insurance Coverage Section 5.01 Organization, Authority and Qualification Section 5.02 Financial and Convention Statements Section 5.03 No Conflict Section 5.04 Transferred Assets Section 5.05 St. Paul Investment Section 5.06 Taxes Section 5.07 Contracts of Platinum US Section 5.08 No Other Representations or Warranties Section 6.01 Organization, Authority and Qualification Section 6.02 No Conflict Section 6.03 St. Paul Investment Section 6.04 Internal Retrocession Agreements Section 6.05 No Other Representations or Warranties Section 7.01 Non-Competition Section 7.02 Use of Names; Non-Disparagement Section 7.03 Standard for Administration of Run-off Business Section 7.04 Quotations for Certain Insurance Coverage Section 8.01 Taxes of Platinum US Section 8.02 Conveyance Taxes Section 8.03 Tax Proceedings Section 8.04 Allocation of Consideration Section 8.05 Section 197 Election Section 8.06 Indemnification as Adjustment Section 9.01 Conditions to Obligations of St. Paul and the Company Section 9.02 Conditions to Obligations of St. Paul Section 9.03 Conditions to Obligations of the Company Selected Pro Forma Financial Information and Operating Data Services and Capacity Reservation Agreement Shared Information Shares Eligible For Future Sale Share Units St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor), The St. Paul Information St. Paul Investment, RenaissanceRe Investment and Principal Shareholders St. Paul Investment, The St. Paul Option Agreement St. Paul's Share Ownership Sublease Agreements Table of Contents Taxation of Shareholders The Predecessor Business The RenaissanceRe Investment The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor) The St. Paul Investment Total Transfer Restrictions, Registration Rights and Standstill Agreement UK Business Transfer Agreement U.K. Regulation Undertakings Underwriting Underwriting and Risk Management Underwriting expenses United States shareholders United States Taxation of U.S. and Non-U.S. Shareholders Units Use of Proceeds Validity of Common Shares
1	1st Page - Filing Submission
"	Formation and Separation Agreement
2	Table of Contents
4	Miscellaneous
9	Section 1.01 Definitions
18	Section 1.02 Other Definitional Provisions
"	Section 2.01 Transfer of Assets
20	Section 2.02 Renewal Rights Information
"	Section 2.03 Joint Ownership
"	Section 2.04 Assumption and Retention of Liabilities
"	Section 2.05 St. Paul Investment
21	Section 2.06 Third Party Consents
22	Section 3.01 Ancillary Agreements
26	Section 3.02 Payment of Expenses
27	Section 3.03 Closing
"	Section 3.04 Closing Deliveries by St. Paul
"	Section 3.05 Closing Deliveries by the Company
28	Section 3.06 Subsequent Exercise of Over-Allotment Option
"	Section 4.01 Settlement of Intercompany Accounts
29	Section 4.02 Removal of Platinum US from Intercompany Agreements and Representation
"	Section 4.03 Discontinuing of Insurance Coverage
"	Section 5.01 Organization, Authority and Qualification
30	Section 5.02 Financial and Convention Statements
"	Section 5.03 No Conflict
31	Section 5.04 Transferred Assets
"	Section 5.05 St. Paul Investment
32	Section 5.06 Taxes
33	Section 5.07 Contracts of Platinum US
"	Section 5.08 No Other Representations or Warranties
"	Section 6.01 Organization, Authority and Qualification
34	Section 6.02 No Conflict
"	Section 6.03 St. Paul Investment
35	Section 6.04 Internal Retrocession Agreements
"	Section 6.05 No Other Representations or Warranties
"	Section 7.01 Non-Competition
38	Section 7.02 Use of Names; Non-Disparagement
"	Section 7.03 Standard for Administration of Run-off Business
"	Section 7.04 Quotations for Certain Insurance Coverage
"	Section 8.01 Taxes of Platinum US
40	Section 8.02 Conveyance Taxes
"	Section 8.03 Tax Proceedings
41	Section 8.04 Allocation of Consideration
"	Section 8.05 Section 197 Election
"	Section 8.06 Indemnification as Adjustment
"	Section 9.01 Conditions to Obligations of St. Paul and the Company
42	Section 9.02 Conditions to Obligations of St. Paul
43	Section 9.03 Conditions to Obligations of the Company
"	Section 10.01 General Cross Indemnification
44	Section 10.02 Registration Statement Indemnification and Contribution
47	Section 10.03 Limitations on Indemnification Obligations
"	Section 10.04 Procedures for Indemnification of Third Party Claims
49	Section 10.05 Remedies Cumulative
"	Section 10.06 Survival of Indemnities
"	Section 11.01 Access to Information
50	Section 11.02 Retention of Records
51	Section 11.03 St. Paul Confidential Information
"	Section 11.04 Further Assurances; No Agency; Specific Performance
52	Section 12.01 Pre-Emptive Rights
54	Section 12.02 Share Buy-Back Programs
"	Section 12.03 Transfer Restrictions; Standstill Provisions
55	Section 13.01 Survival
"	Section 13.02 Governing Law; Dispute Resolution
56	Section 13.03 Notices
57	Section 13.04 Amendment and Modification
"	Section 13.05 Successors and Assigns
58	Section 13.06 No Third Party Beneficiaries
"	Section 13.07 Headings
"	Section 13.08 Severability
"	Section 13.09 Waiver
"	Section 13.10 Expenses
"	Section 13.11 Public Announcement
"	Section 13.12 Entire Agreement
"	Section 13.13 Assignment of this Agreement
"	Section 13.14 Counterparts
59	Section 13.15 Limit on Recovery from Company Directors and Officers
90	St. Paul Information
92	Common Shares
93	Prospectus Summary
99	Platinum's Strategy
101	St. Paul's Share Ownership
104	Units
108	Selected Pro Forma Financial Information and Operating Data
112	Net Premiums Earned
113	Net premiums written
114	Risk Factors
125	Platinum Holdings
"	Platinum US
"	Platinum UK
126	Platinum Bermuda
135	Dilution
137	Use of Proceeds
140	Dividend Policy
141	Capitalization
142	Pro Forma Financial Information
144	Pro Forma Combined Statements of Underwriting Results for the six months ended June 30, 2002 and 2001, and the year ended December 31, 2001
146	Adjustments
148	Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results
151	Critical Accounting Policies
153	Investments
155	Income Tax
158	Losses and loss adjustment expenses
161	Global Casualty
"	Finite Risk
"	Total
164	Underwriting expenses
168	Liquidity and Capital Resources
169	Restrictions on Dividend Payments from our Operating Subsidiaries
"	Bermuda
173	Business
177	Our Business
185	Underwriting and Risk Management
187	Geographic Diversification
194	Our Facilities
"	Regulation
202	U.K. Regulation
205	Proposed Limits on Concentration of Reinsurance Exposures
206	Management
208	Number and Terms of Directors
214	Share Units
215	Change in Control
217	St. Paul Investment, RenaissanceRe Investment and Principal Shareholders
220	Certain Relationships and Related Transactions
"	The St. Paul Investment
225	Pre-emptive Rights
226	Quota Share Retrocession Agreements
228	UK Business Transfer Agreement
229	Employee Benefits and Compensation Matters Agreement
231	Registration Rights Agreement with St. Paul
"	Sublease Agreements
232	St. Paul Option Agreement
233	The RenaissanceRe Investment
"	Investment Agreement
"	RenaissanceRe Option
234	Indemnification and Waiver
235	Transfer Restrictions, Registration Rights and Standstill Agreement
"	Registration Rights
237	RenaissanceRe Option Agreement
238	Business Arrangements
"	Services and Capacity Reservation Agreement
239	Description of Our Common Shares
"	Limitation on Voting Rights
241	Restrictions on Transfer
246	Shares Eligible For Future Sale
247	Description of the Equity Security Units
250	Certain Tax Considerations
253	Taxation of Shareholders
"	United States Taxation of U.S. and Non-U.S. Shareholders
"	United States shareholders
254	RPII Companies
258	Passive Foreign Investment Companies
261	Underwriting
264	Validity of Common Shares
"	Experts
"	Available Information
265	Enforceability of Civil Liabilities Under United States Federal Securities Laws and Other Matters
266	The Predecessor Business
287	Index to Consolidated Financial Statements and Financial Information
"	The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor)
288	Prospectus
289	Item 13. Other Expenses of Issuance and Distribution
"	Item 14. Indemnification of Directors and Officers
"	Item 15. Recent Sales of Unregistered Securities
290	Item 16. Exhibits and Financial Statement Schedules
292	Item 17. Undertakings
300	Shared Information
301	Excluded Classes

EX-2.1 1st Page of 301 TOC ↑Top Previous Next ↓Bottom Just 1st
EXHIBIT 2.1

EXECUTION COPY

FORMATION AND SEPARATION AGREEMENT

between

THE ST. PAUL COMPANIES, INC.

and

PLATINUM UNDERWRITERS HOLDINGS, LTD.

dated as of October 28, 2002

EX-2.1 2nd Page of 301 TOC 1st Previous Next ↓Bottom Just 2nd
TABLE OF CONTENTS

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Page

ARTICLE I

DEFINITIONS

SECTION 1.01 Definitions.................................................... 2
SECTION 1.02 Other Definitional Provisions.................................. 11

ARTICLE II

CONTRIBUTION OF ASSETS; ST. PAUL INVESTMENT

SECTION 2.01 Transfer of Assets............................................. 11
SECTION 2.02 Renewal Rights Information..................................... 13
SECTION 2.03 Joint Ownership................................................ 13
SECTION 2.04 Assumption and Retention of Liabilities........................ 13
SECTION 2.05 St. Paul Investment............................................ 13
SECTION 2.06 Third Party Consents........................................... 14
SECTION 2.07 Cash Contribution.............................................. 14

ARTICLE III

INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE; CLOSING

SECTION 3.01 Ancillary Agreements........................................... 15
SECTION 3.02 Payment of Expenses............................................ 19
SECTION 3.03 Closing........................................................ 20
SECTION 3.04 Closing Deliveries by St. Paul................................. 20
SECTION 3.05 Closing Deliveries by the Company.............................. 20
SECTION 3.06 Subsequent Exercise of Over-Allotment Option................... 21

ARTICLE IV

SEPARATION

SECTION 4.01 Settlement of Intercompany Accounts............................ 21
SECTION 4.02 Removal of Platinum US from Intercompany Agreements and
Representation................................................. 22
SECTION 4.03 Discontinuing of Insurance Coverage............................ 22

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF ST. PAUL

SECTION 5.01 Organization, Authority and Qualification...................... 22
SECTION 5.02 Financial and Convention Statements............................ 23
SECTION 5.03 No Conflict.................................................... 23
SECTION 5.04 Transferred Assets............................................. 24
SECTION 5.05 St. Paul Investment............................................ 24
SECTION 5.06 Taxes.......................................................... 25
SECTION 5.07 Contracts of Platinum US....................................... 26
SECTION 5.08 No Other Representations or Warranties......................... 26

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

SECTION 6.01 Organization, Authority and Qualification...................... 26
SECTION 6.02 No Conflict.................................................... 27
SECTION 6.03 St. Paul Investment............................................ 27
SECTION 6.04 Internal Retrocession Agreements............................... 26
SECTION 6.05 No Other Representations or Warranties......................... 28

ARTICLE VII

NON-COMPETITION; USE OF NAME; ADMINISTRATION OF RUN-OFF CONTRACTS;
INSURANCE MATTERS

SECTION 7.01 Non-Competition................................................ 28
SECTION 7.02 Use of Names; Non-Disparagement................................ 31
SECTION 7.03 Standard for Administration of Run-off Business................ 31
SECTION 7.04 Quotations for Certain Insurance Coverage...................... 31

ARTICLE VIII

TAX MATTERS

SECTION 8.01 Taxes of Platinum US........................................... 31
SECTION 8.02 Conveyance Taxes............................................... 33
SECTION 8.03 Tax Proceedings................................................ 33
SECTION 8.04 Allocation of Consideration.................................... 34
SECTION 8.05 Section 197 Election........................................... 34
SECTION 8.06 Indemnification as Adjustment.................................. 34

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ARTICLE IX

CONDITIONS TO CLOSING

SECTION 9.01 Conditions to Obligations of St. Paul and the Company.......... 34
SECTION 9.02 Conditions to Obligations of St. Paul.......................... 35
SECTION 9.03 Conditions to Obligations of the Company....................... 36

ARTICLE X

INDEMNIFICATION

SECTION 10.01 General Cross Indemnification.................................. 36
SECTION 10.02 Registration Statement Indemnification and Contribution........ 37
SECTION 10.03 Limitations on Indemnification Obligations..................... 40
SECTION 10.04 Procedures for Indemnification of Third Party Claims........... 40
SECTION 10.05 Remedies Cumulative............................................ 42
SECTION 10.06 Survival of Indemnities........................................ 42

ARTICLE XI

ACCESS TO INFORMATION; FURTHER ASSURANCES

SECTION 11.01 Access to Information.......................................... 42
SECTION 11.02 Retention of Records........................................... 43
SECTION 11.03 St. Paul Confidential Information.............................. 44
SECTION 11.04 Further Assurances; No Agency; Specific Performance............ 44

ARTICLE XII

PRE-EMPTIVE RIGHTS; REPURCHASE PROGRAMS; TRANSFER RESTRICTIONS;
STANDSTILL

SECTION 12.01 Pre-Emptive Rights............................................. 45
SECTION 12.02 Share Buy-Back Programs........................................ 47
SECTION 12.03 Transfer Restrictions; Standstill Provisions................... 47

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01 Survival....................................................... 48
SECTION 13.02 Governing Law; Dispute Resolution.............................. 48
SECTION 13.03 Notices........................................................ 49
SECTION 13.04 Amendment and Modification..................................... 50
SECTION 13.05 Successors and Assigns......................................... 50

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SECTION 13.06 No Third Party Beneficiaries................................... 51
SECTION 13.07 Headings....................................................... 51
SECTION 13.08 Severability................................................... 51
SECTION 13.09 Waiver......................................................... 51
SECTION 13.10 Expenses....................................................... 51
SECTION 13.11 Public Announcement............................................ 51
SECTION 13.12 Entire Agreement............................................... 51
SECTION 13.13 Assignment of this Agreement................................... 51
SECTION 13.14 Counterparts................................................... 51
SECTION 13.15 Limit on Recovery from Company Directors and Officers.......... 52

Exhibit 3.01(a) Forms of Quota Share Retrocession Agreements

(i) One hundred percent quota share retrocession agreement
(traditional) between St. Paul Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc.

(ii) One hundred percent quota share retrocession agreement
(non-traditional) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(iii) One hundred percent quota share retrocession agreement
(non-traditional B-1) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(iv) One hundred percent quota share retrocession agreement
(non-traditional B-2) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(v) One hundred percent quota share retrocession agreement
(non-traditional C) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(vi) One hundred percent quota share retrocession agreement
(non-traditional D-1) between Mountain Ridge Insurance
Company and Platinum Underwriters Reinsurance, Inc.

(vii) One hundred percent quota share retrocession agreement
(non-traditional D-2) between Mountain Ridge Insurance
Company and Platinum Underwriters Reinsurance, Inc.

(viii) One hundred percent quota share retrocession agreement
(non-traditional D-3) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

-iv-

EX-2.1 6th Page of 301 TOC 1st Previous Next ↓Bottom Just 6th
(ix) One hundred percent quota share retrocession agreement
(non-traditional D-4) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(x) One hundred percent quota share retrocession agreement
(non-traditional D-Stop Loss) between Mountain Ridge
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(xi) One hundred percent quota share retrocession agreement
(non-traditional D-Spread Loss) between St. Paul Fire
and Marine Insurance Company and Platinum Underwriters
Reinsurance, Inc.

(xii) One hundred percent quota share retrocession agreement
(non-traditional E) between St. Paul Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.

(xiii) One hundred percent quota share retrocession agreement
(traditional) between St. Paul Reinsurance Company
Limited and Platinum Underwriters Reinsurance, Inc.

(xiv) One hundred percent quota share retrocession agreement
(non-traditional A) between St. Paul Reinsurance Company
Limited and Platinum Underwriters Reinsurance, Inc.

(xv) One hundred percent quota share retrocession agreement
(non-traditional B-1) between St. Paul Reinsurance
Company Limited and Platinum Underwriters Reinsurance,
Inc.

(xvi) One hundred percent quota share retrocession agreement
between St. Paul Reinsurance Company Limited and
Platinum Re (UK) Limited.

Exhibit 3.01(b)(i) Form of Master Services Agreement
Exhibit 3.01(b)(ii) Form of UK Master Services Agreement
Exhibit 3.01(c)(i) Form of Run-off Services Agreement
Exhibit 3.01(c)(ii) Form of UK Run-off Services Agreement
Exhibit 3.01(d) Form of Option Agreement
Exhibit 3.01(e) Form of Transitional Trademark License Agreement
Exhibit 3.01(f) Form of Registration Rights Agreement
Exhibit 3.01(g) Form of Employee Benefits and Compensation Matters
Agreement
Exhibit 3.01(h) Form of Underwriting Management Agreement
Exhibit 3.01(i) Form of
(i) Assignment and Assumption Agreement among
Metropolitan Life Insurance Company, St. Paul Re
and Platinum US

(ii) Assignment and Assumption Agreement among WHCHC
Real Estate Limited Partnership, St. Paul Re and
Platinum US

-v-

EX-2.1 7th Page of 301 TOC 1st Previous Next ↓Bottom Just 7th
(iii) Sublease Agreement between St. Paul Re and
Platinum US

(iv) Assignment and Assumption Agreement among Taisei
Fire & Marine Insurance Co., St. Paul Re and
Platinum US

(v) License Agreement between St. Paul Re UK and
Platinum UK

(vi) Agreement to Enter into Sublease Agreement between
St. Paul Re UK and Platinum UK

Exhibit 3.01(j) Form of UK Business Transfer Agreement
Exhibit 3.01(k) Form UK Underwriting Agency and Underwriting Management
Agreement
Exhibit 3.04(b) Form of Bill of Sale
Exhibit 6.04 Form of Quota Share Retrocession Agreements between
Platinum US, as Retrocedent, and Platinum Bermuda, as
Retrocessionnaire

Schedule 1.01 List of Classes of Business Included in the Transferred
Lines
Schedule 2.01(b) Transferred Personal Property
Schedule 2.01(c) Intellectual Property
Schedule 2.01(g) Exceptions to Renewal Rights
Schedule 2.01(i) Information in Respect of Transferred Assets
Schedule 2.01(j) Information to be Provided in Respect of Reinsurance
Agreements
Schedule 2.02 Information in Respect of Renewal Rights
Schedule 3.02(a) Expenses Payable by the Company
Schedule 3.02(b) Expenses Payable by St. Paul
Schedule 4.02 Agreements between Platinum US and St. Paul Subsidiaries
to be Terminated
Schedule 5.04(a)(i) Exceptions to Good and Marketable Title of Transferred
Assets
Schedule 5.04(a)(ii) Encumbrances on Transferred Assets
Schedule 5.06(c) Statutory Periods of Limitations
Schedule 5.06(d) Tax-related Agreements
Schedule 5.06(f) Tax Delinquencies, Claims, Audits, Examinations,
Actions, Suits, Proceedings or Investigations in
Progress or Pending
Schedule 5.06(h) Platinum US Affiliated Group Membership for Tax Filings
Schedule 5.07 Contracts of Platinum US
Schedule 6.02(b) Regulatory Approvals Required to be Obtained by the
Company or its Post-Closing Subsidiaries Prior to the
Closing
Schedule 7.01(a)(ii) Hiring Restrictions
Schedule 9.02(e) Form of Release
Schedule 10.02(b) St. Paul Information
Schedule 10.02(c) Shared Information
Schedule 11.01 Excluded Classes

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FORMATION AND SEPARATION AGREEMENT

THIS FORMATION AND SEPARATION AGREEMENT (this "Agreement") is
made and entered into as of October 28, 2002, by and between THE ST. PAUL
COMPANIES, INC., a Minnesota corporation ("St. Paul"), and PLATINUM UNDERWRITERS
HOLDINGS, LTD., a Bermuda company (the "Company").

RECITALS

WHEREAS, St. Paul has sponsored the formation of the Company;

WHEREAS, the Company intends to conduct an initial public
offering (the "Public Offering") of its common shares, par value $0.01 per share
(the "Common Shares") and a concurrent initial public offering of its equity
security units (the "Units") having a stated amount of $25 per Unit (the "ESU
Offering");

WHEREAS, contingent upon the consummation of the Public
Offering, at the times specified herein and in the Reinsurance Agreements, St.
Paul will make the Cash Contribution (as defined herein) to the Company and will
cause certain of its subsidiaries to, among other things, transfer and retrocede
to certain subsidiaries of the Company assets and liabilities under the
Reinsurance Agreements and transfer the Transferred Assets to the Company and
its subsidiaries, as consideration for which the Company will issue to St. Paul
or its designee pursuant to the St. Paul Investment (as defined herein), (i) a
number of Common Shares equal to 15% of all Common Shares outstanding following
consummation of the Public Offering, the ESU Offering and the St. Paul
Investment and (ii) an option pursuant to the Option Agreement (as defined
herein) under which St. Paul or its designee will have the right to purchase
additional Common Shares of the Company for the prices and in the circumstances
set forth in the Option Agreement;

WHEREAS, St. Paul and the Company wish to provide herein for
certain transactions to be entered into in connection with the Public Offering,
the ESU Offering and the St. Paul Investment and to set forth herein certain
arrangements that will, following the consummation of the Public Offering and
the St. Paul Investment, govern the relationship between them and their
Subsidiaries; and

WHEREAS, St. Paul, the Company, and RenaissanceRe Holdings
Ltd. ("RenaissanceRe"), a Bermuda company, have entered into an Investment
Agreement (as defined herein), which sets forth the terms of the RenaissanceRe
Investment (as defined herein) as well as certain continuing relationships
between the Company and RenaissanceRe following the completion of the Public
offering and the ESU Offering, the St. Paul Investment and the RenaissanceRe
Investment.

NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements set forth herein, the sufficiency of which is
acknowledged, the parties hereby agree as follows:

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ARTICLE I

DEFINITIONS

SECTION 1.01 Definitions. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

"Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency or commission or any arbitration tribunal.

"Affiliate" of any Person or entity means any Person which,
directly or indirectly, controls, is under common control with, or is controlled
by, such Person.

"Ancillary Agreements" means the Option Agreement, the
Registration Rights Agreement, the Employee Benefits and Compensation Matters
Agreement, the Underwriting Management Agreement, the Master Services Agreement,
the Sublease Agreements, the Run-off Services Agreement, the Transitional
Trademark License Agreement, the Quota Share Retrocession Agreements, and the UK
Agreements, in each case as defined and described in more detail in Section 3.01
hereof.

"Arbitrators" has the meaning specified in Section 13.02(b).

"Beneficial Owner" and "beneficially own" means, with respect
to any Person:

(i) securities that such Person or any of such
Person's Affiliates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), including
without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates until such tendered
securities are accepted for payment, purchase or exchange, (B) any
security as a result of an oral or written agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or

(ii) securities that are beneficially owned,
directly or indirectly, by any other Person (or any Affiliate thereof)
with which such Person (or any of such Person's Affiliates) has any
agreement, arrangement or understanding (whether or not in writing, but
excluding customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities until the expiration of forty days after the date of such
acquisition), for the purpose of acquiring, holding, voting

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(except pursuant to a revocable proxy as described in the proviso to
subparagraph (i) above) or disposing of any Voting Securities.

"Bills of Sale" means the Bills of Sale and Assignment (or
other appropriate instruments of transfer, including instruments of assignment
suitable for recording at the U.S. Patent & Trademark Office, the U.S. Copyright
Office or equivalent agencies in other relevant jurisdictions where applicable),
to be executed by St. Paul or its Subsidiaries, as applicable, and to be
acknowledged by the Company or its Subsidiaries, as applicable) on the Closing
Date, substantially in the form of Exhibit 3.04(b).

"Business" means the reinsurance business of St. Paul, as
conducted through its division, St. Paul Re.

"Business Day" means any day excluding Saturday, Sunday and
any day on which banks in New York, New York, have the option by law or other
governmental action to close.

"Cash Contribution" has the meaning specified in Section
2.07(a).

"Closing" has the meaning specified in Section 3.03.

"Closing Balance Sheet" has the meaning specified in Section
4.01(b).

"Closing Date" has the meaning specified in Section 3.03.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the Securities and Exchange Commission.

"Common Shares" has the meaning specified in the Recitals.

"Company" has the meaning specified in the preamble of this
Agreement.

"Company Indemnitee" has the meaning specified in Section
10.01(a).

"Company Information" has the meaning specified in Section
10.02(a).

"Company Liabilities" means collectively, except as otherwise
provided for in this Agreement or the Ancillary Agreements, any and all
Liabilities that arise out of any act, omission, event or condition occurring or
arising on or after the Closing Date relating to the ownership, operation or use
of the business of the Company or any of its Post-closing Subsidiaries or the
Transferred Assets by the Company or any of its Post-closing Subsidiaries. For
the avoidance of doubt, the Company Liabilities do not include any Liabilities
under the federal or any other securities laws relating to the Public Offering
but do include all Liabilities relating to the Employment Agreements
irrespective of whether occurring or arising prior to, on or after the Closing
Date and all Liabilities relating to any Renewal Obligations.

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"Company Registration Indemnitee" has the meaning specified in
Section 10.02(b).

"Company Subsidiary" means any Subsidiary of the Company as of
the date hereof or at any time hereafter.

"Convertible New Securities" has the meaning specified in
Section 12.01(d)(iv).

"Dilutive Transaction" has the meaning specified in Section
12.01(a).

"Dispute" has the meaning specified in Section 13.02(b)(i).

"DOJ" means the Department of Justice.

"Employee Benefits and Compensation Matters Agreement" has the
meaning specified in Section 3.01(g)(i).

"Employment Agreements" means, collectively, (i) the
employment agreement, dated as of March 3, 2002, between St. Paul and Jerome T.
Fadden, as amended, (ii) the agreement, dated as of March 1, 2002, between St.
Paul and Steven H. Newman, as amended, (iii) the consulting agreement, dated as
of March 1, 2002, between St. Paul and Steven H. Newman, (iv) the employment
agreement, dated as of May 2, 2002, between St. Paul and Michael D. Price, as
amended, (v) the employment agreement, dated as of July 3, 2002, between St.
Paul and William A. Robbie, as amended, and (vi) the employment agreement, dated
as of July 5, 2002, between St. Paul and Michael E. Lombardozzi, as amended.

"Encumbrance" means any security interest, pledge,
hypothecation, mortgage, lien (including, without limitation, environmental and
tax liens), violation, charge, lease, license, encumbrance, servient easement,
adverse claim, reversion, reverter, preferential arrangement, restrictive
covenant, condition or restriction of any kind, including, without limitation,
any restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership.

"ESU Offering" has the meaning specified in the Recitals.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.

"Excluded Classes" are those types of reinsurance contracts
previously underwritten by St. Paul Re and included in the list of classes of
business set forth in Schedule 11.01.

"Fire and Marine" means St. Paul Fire and Marine Insurance
Company, a Minnesota corporation and a wholly owned subsidiary of St. Paul.

"Firm Public Offering Shares" means the Company's Common
Shares issued in the Public Offering, other than Common Shares issued as a
result of exercise of the Over-Allotment by the underwriters of the Public
Offering.

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"Firm St. Paul Shares" has the meaning specified in Section
2.05(a)(i).

"Firm Units" means the Company's Units issued in the ESU
Offering, other than Units issued as a result of exercise of the over-allotment
option by the underwriters of the ESU Offering.

"Foreign Corporation" means a foreign corporation within the
meaning of Section 7701(a)(3) and (5) of the Code.

"FTC" means the Federal Trade Commission.

"Governmental Authority" means any self-regulatory
organization having jurisdiction over the parties hereto or any of the parties
to any of the Ancillary Agreements, any United States or non-United States
federal, national, supranational, state, provincial, local or similar
government, governmental, regulatory (including, without limitation, insurance
regulatory) or administrative authority, legislative body, agency or commission
or any court, tribunal or judicial or arbitral body.

"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.

"Indemnifying Party" has the meaning specified in Section
10.03.

"Indemnitee" has the meaning specified in Section 10.03.

"Information" has the meaning specified in Section 11.01(b).

"Insurance Proceeds" means those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier on behalf
of the insured, in either case net of any applicable premium adjustments,
retrospectively rated premium adjustments, deductibles, retentions or costs paid
by such insured.

"Investment Agreement" means the Investment Agreement by and
among the Company, St. Paul and RenaissanceRe, dated as of September 20, 2002,
pursuant to which RenaissanceRe will, under the terms and conditions specified
therein, purchase up to 3,960,000 Common Shares of the Company in a private
placement that will close concurrently with the Public Offering, the ESU
Offering and the St. Paul Investment plus as many additional Common Shares as
are required in order for it to retain its 9.9% interest (up to a maximum of
594,000 Common Shares) and will receive, pursuant to the RenaissanceRe Option, a
ten-year option to purchase up to an additional 2,500,000 Common Shares of the
Company.

"Liabilities" means any and all debts, liabilities and
obligations, payments, costs and expenses, whether accrued or unaccrued,
absolute or contingent, matured or unmatured, disclosed or undisclosed, known or
unknown, liquidated or unliquidated or determined or determinable, including,
without limitation, those arising under any law and regulations

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thereunder (including, without limitation, any insurance law but excluding any
Tax law), Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.

"Losses" means any and all losses, Liabilities, claims,
damages, obligations, payments, costs and expenses, matured or unmatured,
absolute or contingent, disclosed or undisclosed, determined or determinable,
accrued or unaccrued, liquidated or unliquidated, known or unknown (including,
without limitation, the costs and expenses of any Action, threatened Action,
demand, assessment, judgment, settlement and compromise relating thereto and
attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Action or threatened
Action).

"Mountain Ridge" means Mountain Ridge Insurance Company, a
Vermont insurance company.

"Newly Hired Employees" has the meaning specified in Section
3.01(g)(i).

"New Securities" has the meaning specified in Section
12.01(a).

"Option Agreement" has the meaning specified in Section
3.01(d).

"Optional Cash Contribution" has the meaning specified in
Section 2.07(b).

"Optional Public Offering Shares" means additional Common
Shares offered upon the exercise of the Over-Allotment Option.

"Optional St. Paul Shares" has the meaning specified in
Section 2.05(a)(ii).

"Over-Allotment Option" means the over-allotment option that
may be exercised by the underwriters of the Public Offering pursuant to the
underwriting agreement relating to the Public Offering.

"Permitted Acquiree" has the meaning specified in Section
7.01(b)(ii).

"Person" includes an individual, a partnership, a joint
venture, a limited liability company, a corporation, a trust, an unincorporated
organization, a group and a government or other department or agency thereof.

"Platinum Bermuda" means Platinum Underwriters Bermuda, Ltd.,
a Bermuda insurance company and a wholly owned subsidiary of the Company.

"Platinum Finance" means Platinum Underwriters Finance, Inc.,
a Delaware corporation and a wholly owned subsidiary of Platinum Regency.

"Platinum Regency" means Platinum Regency Holdings, an Irish
private unlimited company and a wholly owned subsidiary of the Company.

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"Platinum UK" means Platinum Re (UK) Limited, an English
insurance company and a wholly owned subsidiary of Platinum Regency.

"Platinum US" means Platinum Underwriters Reinsurance, Inc., a
Maryland insurance company and a wholly owned indirect subsidiary of St. Paul
prior to the Closing Date, and a wholly owned subsidiary of Platinum Finance
following the Closing.

"Platinum US Shares" means all the issued and outstanding
shares of common stock, par value $100 per share, of Platinum US.

"Post-Closing Subsidiaries", with respect to either St. Paul
or the Company, means collectively all of the Subsidiaries of such entity
following the Closing Date.

"Pre-Closing Periods" has the meaning specified in Section
8.01(a).

"Pre-Closing Taxes" has the meaning specified in Section
8.01(a).

"Private Offering Memorandum" means the private offering
memorandum relating to the RenaissanceRe Investment.

"Prospectus" means any preliminary prospectus, as amended and
supplemented from time to time, and any final prospectus filed pursuant to Rule
424(b) under the Securities Act, in each case relating to one of the
Registration Statements.

"Public Offering" has the meaning specified in the Recitals.

"Purchase Contract" means the contract to purchase Common
Shares issued as part of the Units in the ESU Offering.

"Purchase Contract Agreement" means the purchase contract
agreement between the Company and JPMorgan Chase Bank, as purchase contract
agent.

"Quota Share Retrocession Agreements" has the meaning
specified in Section 3.01(a).

"Registration Indemnitee" has the meaning specified in Section
10.02(b).

"Registration Rights Agreement" has the meaning specified in
Section 3.01(f).

"Registration Statements" means the registration statements on
Form S-1, as amended and supplemented from time to time, to be filed with the
Commission under the Securities Act of 1933, as amended, relating to each of the
Public Offering and the ESU Offering.

"Regulations" means the Treasury Regulations (including
temporary Regulations) promulgated by the United States Department of Treasury
with respect to the Code or other federal tax statutes.

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"Reinsurance Agreements" means the reinsurance agreements
retroceded to one of the Company's Post-Closing Subsidiaries pursuant to the
applicable Quota Share Retrocession Agreements.

"RenaissanceRe" has the meaning specified in the Recitals of
this Agreement.

"RenaissanceRe Investment" means the private placement to
RenaissanceRe of Common Shares and the RenaissanceRe Option pursuant to the
Investment Agreement.

"RenaissanceRe Option" means the ten-year option to purchase
up to 2,500,000 Common Shares at a price per share equal to 120% of the initial
public offering price that the Company has granted to RenaissanceRe pursuant to
the Investment Agreement.

"Renewal Obligations" means any obligations of St. Paul and
its Subsidiaries to write or renew reinsurance treaties, contracts and
agreements incepting on or after January 1, 2002 relating to the Transferred
Lines and arising from the operation of the reinsurance business conducted by
St. Paul Re prior to the Closing.

"Renewal Rights" means all the direct and indirect rights of
St. Paul and its Subsidiaries to seek to renew reinsurance treaties, contracts
and agreements underwritten by St. Paul Re and in force on the Closing Date
relating to the Transferred Lines, other than treaties, contracts and agreements
identified or described in Schedule 2.01(g).

"Representatives" has the meaning specified in Section 11.01.

"Restricted Period" has the meaning specified in Section
7.01(a).

"Run-off Business" has the meaning specified in Section
7.01(b)(i).

"Run-off Services" has the meaning specified in Section
3.01(c)(i).

"Second Closing" has the meaning specified in Section 3.06(a).

"Second Closing Date" has the meaning specified in Section
3.06(a).

"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.

"Shared Information" has the meaning specified in Section
10.02(c).

"St. Paul" has the meaning specified in the preamble of this
Agreement.

"St. Paul Confidential Information" has the meaning specified
in Section 11.03(a).

"St. Paul Designee" means an Affiliate of St. Paul designated
as a party to the Option Agreement or the Registration Rights Agreement.

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"St. Paul Group" means any "affiliated group" (as defined in
Section 1504(a) of the Code) or any other consolidated, combined, unitary or
similar group for any other Tax purpose that includes St. Paul.

"St. Paul Indemnitee" has the meaning specified in Section
10.01(b).

"St. Paul Information" has the meaning specified in Section
10.02/(b).

"St. Paul Investment" means the private placement to St. Paul
of Common Shares and the St. Paul Option pursuant to Section 2.05 of this
Agreement.

"St. Paul Investment Opinion" has the meaning specified in
Section 9.02(d).

"St. Paul Liabilities" means collectively, except as otherwise
provided for in this Agreement or the Ancillary Agreements, any and all
Liabilities that arise out of any act, omission, event or condition occurring or
arising prior to the Closing Date relating to (i) the ownership, operation or
use of the business of St. Paul Re or the Transferred Assets by St. Paul or any
of its Subsidiaries and (ii) Platinum US. For the avoidance of doubt, the St.
Paul Liabilities do not include any Liabilities under the federal or any other
securities laws relating to the Public Offering or any Renewal Obligations. For
the further avoidance of doubt, St. Paul Liabilities do not include Liabilities
arising out of any act or omission occurring or arising prior to the Closing
Date of any of Steven H. Newman, Jerome T. Fadden, Michael D. Price, William A.
Robbie or Michael E. Lombardozzi taken in furtherance of the organization of
Platinum Holdings or its Subsidiaries, the Public Offering, this Agreement, the
Registration Statements, the Ancillary Agreements or the transactions related
thereto but otherwise do include Liabilities arising out of any act or omission
occurring or arising prior to the Closing Date of any of such individuals in
their capacities as officers of St. Paul Re.

"St. Paul Licensor" has the meaning specified in Section
3.01(e).

"St. Paul Option" means the option to be granted to St. Paul
pursuant to the Option Agreement.

"St. Paul Pre-Closing Subsidiaries" has the meaning specified
in Article V.

"St. Paul Re" means the reinsurance operations of St. Paul
reported in the Reinsurance segment of St. Paul, as reflected in its 2001 Annual
Report on Form 10-K.

"St. Paul Re (UK)" means St. Paul Reinsurance Company Limited,
a U.K. insurance company and a wholly owned subsidiary of St. Paul.

"St. Paul Registration Indemnitee" has the meaning specified
in Section 10.02(a).

"St. Paul Shares" means the Firm St. Paul Shares, the Optional
St. Paul Shares and any Common Shares issuable to St. Paul pursuant to Section
2.05 of this Agreement collectively.

"Straddle Periods" has the meaning specified in Section
8.01(a).

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"Sublease Agreements" means the sublease agreements and
assignments of leases between Affiliates of St. Paul and Affiliates of the
Company; substantially in the forms attached to this Agreement as Exhibits
3.01(i)(i)-(v).

"Subsidiary" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any other Person in which such Person
and/or one or more Subsidiaries of such Person has more than a 50% equity
interest at the time.

"Tax" means all federal, state, local and foreign income,
profits, franchise, gross receipts, premium, environmental, customs duty,
capital stock, severances, stamp, payroll, sales, employment, unemployment,
disability, use, property, withholding, excise, production, value added,
occupancy and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to such
amounts and any interest in respect of such penalties and additions.

"Tax Proceeding" has the meaning specified in Section 8.03(a).

"Tax Returns" means all returns, reports or similar statements
(including any related exhibits and schedules) required to be filed with respect
to any Taxes, including any information return, claim or refund, amended return
or declaration of estimated tax.

"Third Party Claim" has the meaning specified in Section
10.04(a).

"Transferred Assets" has the meaning specified in Section
2.01.

"Transferred Business" means the Reinsurance Agreements and
the Transferred Assets, collectively.

"Transferred Business Confidential Information" means the
information set forth in Section 2.01(i), Section 2.01(j) and Section 2.02. For
the avoidance of doubt, Transferred Business Confidential Information does not
include any information relating to Excluded Classes to made available to the
Company pursuant to Section 11.01.

"Transferred Lines" are those types of reinsurance contracts
underwritten by St. Paul Re and included in the list of classes of business set
forth in Schedule 1.01(a).

"UK Agreements" means the UK Business Transfer Agreement, the
UK Master Services Agreement, the UK Run-off Services Agreement, the UK
Underwriting Agency and Underwriting Management Agreement and the UK Quota Share
Retrocession Agreements.

"UK Business Transfer Agreement" has the meaning specified in
Section 3.01(j).

"UK Master Services Agreement" has the meaning specified in
Section 3.01(b)(ii).

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"UK Quota Share Retrocession Agreements" means the quota share
retrocession agreements referred to in Sections 3.01(a)(xiii) through (xv).

"UK Run-off Services Agreement" has the meaning specified in
Section 3.01(c)(ii).

"UK Underwriting Agency and Underwriting Management Agreement"
has the meaning specified in Section 3.01(k).

"Underwriting Agreement" means the underwriting agreement
among St. Paul, the Company and Goldman, Sachs & Co. and the other underwriters
named therein relating to the Public Offering.

"Units" has the meaning specified in the Recitals.

"USF&G" has the meaning specified in Section 5.04(b).

"Voting Securities" means the Common Shares and all other
securities of the Company of any kind or class having power generally to elect a
majority of the Company's directors (irrespective of whether or not at the time
stock of any class or classes of the Company shall have or might have voting
power by reason of the happening of any contingency).

"Wholly Owned Post-Closing Subsidiaries", with respect to
either St. Paul or the Company, means collectively all of the Wholly Owned
Subsidiaries of such entity following the Closing Date.

"Wholly Owned Subsidiary" means, as to any Person, (i) any
corporation 100% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or one
or more Wholly Owned Subsidiaries of such person and (ii) any other Person in
which such person and/or one or more Wholly Owned Subsidiaries of such Person
has a 100% equity interest at the time.

SECTION 1.02 Other Definitional Provisions. The words
"hereof", "hereto", "herein" and "hereunder" and words of similar import when
used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; and references to any Article, Section,
Exhibit or Schedule are references to Articles, Sections, Exhibits or Schedules
in or to this Agreement unless otherwise specified.

ARTICLE II

CONTRIBUTION OF ASSETS; ST. PAUL INVESTMENT

SECTION 2.01 Transfer of Assets. Effective as of the Closing
Date, and immediately after the delivery of the Firm Public Offering Shares
against payment therefor, St. Paul shall, and (as necessary) shall cause its
Subsidiaries to, sell, assign, transfer, convey and deliver to the Company or
its designees, which shall acquire at the Closing from St. Paul or its

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Subsidiaries, as the case may be, the following assets and properties together
with any related Company Liabilities (such assets and Company Liabilities are
collectively referred to as the "Transferred Assets"):

(a) the Platinum US Shares;

(b) the furniture, fixtures, computers, equipment,
machinery and other tangible personal property, and all contracts and agreements
relating thereto listed on Schedule 2.01(b);

(c) the licensed rights to the intellectual property
listed on Schedule 2.01(c), which includes intellectual property used in the
offices subject to the subleases and assignments of leases listed in Section
3.01(i) as well as on the premises leased by St. Paul in Tokyo and in London (it
being understood that certain rights may not be transferred without the consent
of a third party, and that while St. Paul and its relevant Subsidiaries will use
commercially reasonable efforts to obtain such consents, they shall not have any
liability to the Company or any Subsidiary of the Company to the extent any such
consent is not obtained by the Closing Date and, for greater certainty, none of
St. Paul nor any Subsidiary of St. Paul shall be required to make any payment to
a third party to procure the transfer of rights to any intellectual property);

(d) the Employment Agreements, as follows:

(i) the employment agreement, dated as of March
3, 2002, between St. Paul and Jerome T. Fadden, as amended, shall be
assigned to the Company;

(ii) the agreement, dated as of March 1, 2002,
between St. Paul and Steven H. Newman, as amended, shall be assigned to
the Company;

(iii) the consulting agreement, dated as of March
1, 2002, between St. Paul and Steven H. Newman shall be assigned to
Platinum US;

(iv) the employment agreement, dated as of May 2,
2002, between St. Paul and Michael D. Price, as amended, shall be
assigned to Platinum US;

(v) the employment agreement, dated as of July
3, 2002, between St. Paul and William A. Robbie, as amended, shall be
assigned to the Company; and

(vi) the employment agreement, dated as of July
5, 2002, between St. Paul and Michael E. Lombardozzi, as amended, shall
be assigned to the Company.

(e) the rights to occupy the premises that are the
subject of the Sublease Agreements as specified by such Sublease Agreements;

(f) the Newly Hired Employees and the U.K. Newly Hired
Employees;

(g) the Renewal Rights other than as set forth on
Schedule 2.01(g);

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(h) the licensed rights to certain intellectual property
provided pursuant to the Transitional Trademark License Agreements;

(i) Information in respect of the Transferred Assets set
forth in Section 2.01(a) through (h) set forth in Schedule 2.01(i); and

(j) Information in respect of Reinsurance Agreements set
forth in Schedule 2.01(j).

The Transferred Assets (i) include any and all Business Assets
as defined in the UK Business Transfer Agreement, but (ii) exclude any and all
assets and properties of St. Paul or any of its Affiliates other than the assets
specifically identified above.

SECTION 2.02 Renewal Rights Information. Effective as of the
Closing Date, and promptly after the delivery of the Firm Public Offering Shares
against payment therefor, St. Paul shall cause to be delivered to the Company or
its Subsidiaries the information in respect of Renewal Rights set forth in
Schedule 2.02.

SECTION 2.03 Joint Ownership. The parties agree that they
shall be joint owners of the information and records referenced in Section
2.01(i) and (j), whether they have originals or copies of the various components
thereof.

SECTION 2.04 Assumption and Retention of Liabilities.
Effective as of the Closing Date, the Company or one of its Post-Closing
Subsidiaries shall assume and pay, perform and discharge (when due and payable)
the Company Liabilities, and St. Paul shall retain and, pay, perform and
discharge (when due and payable) the St. Paul Liabilities.

SECTION 2.05 St. Paul Investment. (a) Subject to clause (b) of
this Section 2.05, the Company hereby agrees that, contingent upon the
consummation of the Public Offering, it shall sell, transfer, convey and deliver
to St. Paul or its designee and St. Paul agrees that it shall purchase from the
Company in a transaction exempt from the registration requirements of the
Securities Act:

(i) at the time of the delivery of the Firm
Public Offering Shares, 6,000,000 Common Shares (the "Firm St. Paul
Shares"), the St. Paul Option and the right to receive the Optional St.
Paul Shares in the circumstances described in Section 2.05(a)(ii), in
exchange for the transfer of the Transferred Assets by St. Paul
pursuant to Section 2.01 and the payment of the Cash Contribution by
St. Paul pursuant to Section 2.07(a), and the various agreements and
undertakings of St. Paul herein and the entering into the Ancillary
Agreements by St. Paul and its Subsidiaries; and

(ii) in the event of any exercise of the
Over-Allotment Option by the underwriters in the underwriters'
discretion in whole or in part, at the time of delivery of the Optional
Public Offering Shares, a number of Common Shares (the "Optional St.
Paul Shares"), to be determined in St. Paul's discretion and notice
thereof to be provided to the Company by St. Paul a reasonable time
prior to the Second Closing of the sale of the Optional Public Offering
Shares, such Optional St. Paul Shares not to exceed the lesser of (I)
the number of Common Shares required for St. Paul to retain a 15%
ownership

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interest in the Company and (II) 900,000 Common Shares if the
Over-Allotment Option is exercised in full, in exchange for the payment
of the Optional Cash Contribution pursuant to Section 2.07(b),

such that in case (i) above, and in case (ii) above if St. Paul exercises in
full its right to purchase Optional St. Paul Shares, upon consummation of the
Public Offering, the ESU Offering, the St. Paul Investment and the RenaissanceRe
Investment, St. Paul will have beneficial ownership of 15% of all Common Shares
outstanding, the precise number of shares to be issued to St. Paul to be rounded
down to the nearest round lot number of shares.

(b) In the event the Company and the underwriters agree
to alter the number of Firm Public Offering Shares and Optional Public Offering
Shares after the date hereof, the number of Firm St. Paul Shares and Optional
St. Paul Shares will be proportionately adjusted.

SECTION 2.06 Third Party Consents. (a) St. Paul shall use
commercially reasonable efforts to obtain prior to the Closing Date any consent,
approval or authorization necessary for the transfer of the Transferred Assets
to the Company as contemplated by this Agreement.

(b) If St. Paul has not obtained any consent, approval or
authorization necessary for the transfer of any of the Transferred Assets as
contemplated by this Agreement prior to the Closing Date, St. Paul, for a period
of up to 12 months subsequent to the Closing Date, shall reasonably cooperate
with the Company in attempting to obtain such consents, approvals or
authorizations as promptly thereafter as practicable, provided that the Company
shall promptly reimburse St. Paul for any reasonable legal and other expenses
incurred in connection with such cooperation as such expenses are incurred.

(c) St. Paul may not exercise any of its rights under any
of the Transferred Assets with respect to which such consent, approval or
authorization to the transfer thereof has not been obtained by the Closing Date
except at the direction of or on behalf of the Company or its Post-Closing
Subsidiaries, and the Company and its Post-Closing Subsidiaries shall be
responsible for any Company Liabilities in respect of such Transferred Assets
after the Closing Date provided that St. Paul shall not be required to take any
action directed by the Company under any agreement relating to a Transferred
Asset that would cause a breach of such Agreement and St. Paul or a St. Paul
Post-Closing Subsidiary reasonably believes that it retains liability for such
breach.

SECTION 2.07 (a) Cash Contribution. At the Closing, St. Paul
shall pay to the Company the amount in cash (the "Cash Contribution") specified
as the Cash Contribution in the final Prospectus to be filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act in connection
with the Public Offering. St. Paul shall make such Cash Contribution to the
Company in U.S. dollars, in immediately available funds, payable by wire
transfer to a bank account outside the United States of America notified by the
Company to St. Paul two Business Days prior to the Closing Date.

(b) Upon delivery of the Optional St. Paul Shares, St.
Paul shall pay to the Company the amount in cash (the "Optional Cash
Contribution") equal to the product of (i) the

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Cash Contribution and (ii) a fraction, the numerator of which is the number of
Optional St. Paul Shares and the denominator of which is the number of Firm St.
Paul Shares. St. Paul shall make such Optional Cash Contribution to the Company
in U.S. dollars, in immediately available funds, payable by wire transfer to a
bank account outside the United States of America notified by the Company to St.
Paul two Business Days prior to the date of delivery of the Optional St. Paul
Shares.

ARTICLE III

INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE; CLOSING

SECTION 3.01 Ancillary Agreements. The parties hereto agree to
enter into, and (as necessary) shall cause their respective Subsidiaries to
enter into, the Ancillary Agreements, in each case (unless otherwise specified
in this Article III) effective as of the Closing Date contingent upon and
immediately after the time of the completion of the Public Offering and the ESU
Offering as follows:

(a) the following retrocession agreements (collectively,
the "Quota Share Retrocession Agreements"), all of which shall go into effect as
of the later of 12:01 A.M., local time, on the Business Day immediately
following the Closing Date or October 1, 2002:

(i) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(i), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the traditional reinsurance
contracts entered into by Fire and Marine incepting on or after January
1, 2002 and the Closing Date as specified in an exhibit thereto, and
the traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(ii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(ii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form A)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(iii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(iii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form B-1)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

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(iv) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(iv), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form B-2)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(v) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(v), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form C)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(vi) a Quota Share Retrocession Agreement between
Mountain Ridge and Platinum US, substantially in the form of Exhibit
3.01(a)(vi), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-1)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(vii) a Quota Share Retrocession Agreement between
Mountain Ridge and Platinum US, substantially in the form of Exhibit
3.01(a)(vii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-2)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(viii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(viii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-3)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(ix) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(ix), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-4)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(x) a Quota Share Retrocession Agreement between
Mountain Ridge and Platinum US, substantially in the form of Exhibit
3.01(a)(x), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-Stop
Loss) reinsurance contracts incepting on or after January 1,

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2002 and the Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(xi) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(xi), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-Spread
Loss) reinsurance contracts incepting on or after January 1, 2002 and
the Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(xii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of Exhibit
3.01(a)(xii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form E)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;

(xiii) a UK Quota Share Retrocession Agreement
between St. Paul Re UK and Platinum US, substantially in the form of
Exhibit 3.01(a)(xiii), pursuant to which Platinum US will reinsure 100%
of the liabilities of St. Paul Re UK under the traditional reinsurance
contracts written by St. Paul Re UK incepting on or after January 1,
2002, as specified therein;

(xiv) a UK Quota Share Retrocession Agreement
between St. Paul Re UK and Platinum US, substantially in the form of
Exhibit 3.01(a)(xiv), pursuant to which Platinum US will reinsure 100%
of the liabilities of St. Paul Re UK under the non-traditional (Form A)
reinsurance contracts written by St. Paul Re UK incepting on or after
January 1, 2002, as specified therein;

(xv) a UK Quota Share Retrocession Agreement
between St. Paul Re UK and Platinum US, substantially in the form of
Exhibit 3.01(a)(xv), pursuant to which Platinum US will reinsure 100%
of the liabilities of St. Paul Re UK under the non-traditional (Form
B-1) reinsurance contracts written by St. Paul Re UK incepting on or
after January 1, 2002, as specified therein; and

(xvi) a UK Quota Share Retrocession Agreement
between St. Paul Re UK and Platinum UK, substantially in the form of
Exhibit 3.01(a)(xvi), pursuant to which Platinum UK will reinsure 100%
of the liabilities of St. Paul Re UK under the reinsurance contracts
written by St. Paul Re UK incepting on or after the day following
receipt by Platinum UK of permission from the Financial Services
Authority under Part IV of the Financial Services and Markets Act 2000,
as specified therein.

(b) (i) a Master Services Agreement substantially in
the form of Exhibit 3.01(b)(i) between St. Paul and the Company
pursuant to which St. Paul and/or its Post-Closing Subsidiaries other
than St. Paul Re UK will provide the Company and its Subsidiaries other
than Platinum UK the Transition Services (as defined in the Master
Services Agreement), including, without limitation, payroll
administration, human

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resources management and electronic systems support, in each case as
specified in the applicable service schedule to the Master Services
Agreement, for a specified period of time;

(ii) a UK Master Services Agreement substantially
in the form of Exhibit 3.01(b)(ii) between St. Paul Re UK and Platinum
UK pursuant to which St. Paul Re UK will provide Platinum UK with the
Transitional Services (as defined in the UK Master Services Agreement),
including, without limitation, payroll administration and electronic
systems support, in each case as specified in the service schedule to
the UK Master Services Agreement, for a specified period of time;

(c) (i) a Run-off Services Agreement substantially
in the form of Exhibit 3.01(c)(i), between Fire and Marine and Platinum
US pursuant to which the Company and/or its Post-Closing Subsidiaries
other than Platinum UK will provide certain services (the "Run-off
Services") to St. Paul and/or its Post-Closing Subsidiaries other than
St. Paul Re UK for a specified period of time;

(ii) a UK Run-off Services Agreement
substantially in the form of Exhibit 3.01(c)(ii), between St. Paul Re
UK and Platinum UK pursuant to which Platinum UK will provide Run-off
Services to St. Paul Re UK for a specified period of time;

(d) an Option Agreement, substantially in the form of
Exhibit 3.01(d), between St. Paul or a St. Paul Designee and the Company,
pursuant to which St. Paul or such St. Paul Designee will, under the terms and
conditions specified therein, have the right to purchase up to 6,000,000
additional Common Shares of the Company;

(e) one or more Transitional Trademark License
Agreements, substantially in the form of Exhibit 3.01(e), between St. Paul and
its relevant Subsidiaries (the "St. Paul Licensors") and the Company and its
Post-Closing Subsidiaries pursuant to which the St. Paul Licensors will grant to
the Company and/or its Post-Closing Subsidiaries licenses to use service marks,
trademarks and other intellectual property rights specified in such agreement
for a specified period of time;

(f) a Registration Rights Agreement, substantially in the
form of Exhibit 3.01(f), between St. Paul or a St. Paul Designee and the Company
with respect to all Common Shares of the Company held by or optioned to St. Paul
or such St. Paul Designee as of the Closing Date;

(g) an Employee Benefits and Compensation Matters
Agreement (which shall go into effect on the Business Day immediately following
the Closing Date), substantially in the form of Exhibit 3.01(g)(i), between St.
Paul and Platinum US to allocate assets, liabilities and responsibilities
relating to the hiring of certain employees of St. Paul and its Subsidiaries
other than St. Paul Re UK by the Company and its Post-Closing Subsidiaries other
than Platinum UK (the "Newly Hired Employees") and the continued participation
by the Newly Hired Employees in the benefit plans, that St. Paul currently
sponsors and maintains;

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(h) an Underwriting Management Agreement, substantially
in the form of Exhibit 3.01(h)(i) pursuant to which the Company or one of its
Post-Closing Subsidiaries will provide to Fire and Marine certain underwriting
services, as specified in the Underwriting Management Agreement; and

(i) the following sublease agreements or assignments of
lease (collectively, the "Sublease Agreements"):

(i) an Assignment and Assumption Agreement
(Miami), substantially in the form of Exhibit 3.01(i)(i), among
Metropolitan Life Insurance Company, St. Paul Re and Platinum US;

(ii) an Assignment and Assumption Agreement
(Chicago), substantially in the form of Exhibit 3.01(i)(ii), among
WHCHC Real Estate Limited Partnership, St. Paul Re and Platinum US;

(iii) a Sublease Agreement (New York),
substantially in the form of Exhibit 3.01(i)(iii), between St. Paul Re
and Platinum US;

(iv) an Assignment and Assumption Agreement
(Tokyo), substantially in the form of Exhibit 3.01(i)(iv), among Taisei
Fire & Marine Insurance Co., St. Paul Re and Platinum US; and

(v) a License Agreement (Lime Street, London),
substantially in the form of Exhibit 3.01(i)(v), between St. Paul Re UK
and Platinum UK.

(j) a U.K. Business Transfer Agreement, substantially in
the form of Exhibit 3.01(j), among St. Paul Re UK, Platinum UK and St Paul
Management Limited, pursuant to which St. Paul Re UK will transfer the assets
specified therein to Platinum UK.

(k) a U.K. Underwriting Agency and Underwriting
Management Agreement, substantially in the form of Exhibit 3.01(k), between St.
Paul Re UK and Platinum UK, pursuant to which Platinum UK will act as the
underwriting agent for St. Paul Re UK in the U.K. until the first anniversary of
the completion of the Public Offering, and pursuant to which Platinum UK will
provide certain underwriting services to St. Paul Re UK.

SECTION 3.02 Payment of Expenses. (a) The Company shall pay
(or, to the extent incurred by and paid for by St. Paul or any Affiliate thereof
prior to the Closing Date, shall, on the Closing Date, and, if incurred on or
following the Closing Date, promptly reimburse St. Paul and any such Affiliate
for any and all amounts so paid) the costs, fees, disbursements and expenses set
forth in Schedule 3.02(a).

(b) St. Paul shall pay (or, to the extent incurred by and
paid for by the Company or any of its Post-Closing Subsidiaries on or prior to
the Closing Date shall, on the Closing Date, and, if incurred following the
Closing Date, promptly reimburse the Company and any such Post-Closing
Subsidiary for any and all amounts so paid) the costs, fees, disbursements and
expenses set forth in Schedule 3.02(b).

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SECTION 3.03 Closing. Subject to the terms and conditions of
this Agreement, all transactions contemplated by this Agreement shall be
consummated at a closing (the "Closing") to be held at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York at 9:00 A.M., New York time, on
the date of the delivery of the Firm Public Offering Shares or at such other
place (outside the United Kingdom) or at such other time or on such other date
as St. Paul and the Company may mutually agree upon in writing (the day on which
the Closing takes place being the "Closing Date"); provided, however, that
except for the Quota Share Retrocession Agreements and the Employee Benefits and
Compensation Matters Agreement, the Ancillary Agreements shall become effective
immediately after delivery of the Firm Public Offering Shares and Firm St. Paul
Shares and the Quota Share Retrocession Agreements and the Employee Benefits and
Compensation Matters Agreement shall become effective at 12:01 A.M. on the
Business Day immediately following the Closing Date or, if later, on October 1,
2002.

SECTION 3.04 Closing Deliveries by St. Paul. At the Closing,
St. Paul shall deliver and shall cause its Post-Closing Subsidiaries to deliver
to the Company:

(a) executed copies of all Ancillary Agreements;

(b) executed copies of the Bills of Sale substantially in
the form of Exhibit 3.04(b) and such other instruments, in form and substance
reasonably satisfactory to the Company, as may be reasonably requested by the
Company to transfer, convey and assign the Transferred Assets (including,
without limitation, the Platinum US Shares and the Employment Agreements) to the
Company or its designee or evidence of such transfer on the public records;

(c) a certificate representing all of the Platinum US
Shares, duly endorsed or accompanied by stock powers (in form reasonably
satisfactory to the Company) in favor of Platinum Regency; and

(d) the certificate specified in Section 9.03(c);

(e) evidence reasonably satisfactory to the Company that
all consents and approvals as set forth on Schedule 6.02(b) have been obtained
and are in full force and effect;

(f) the balance sheet of Platinum US dated May 31, 2002,
which shall have been prepared in accordance with accounting practices
prescribed or permitted for insurance companies by the Maryland insurance
regulatory authorities, which have been applied consistent with the financial
statements of past periods and shall in all material respects fairly present the
financial condition of Platinum US as of its date;

(g) a statement setting forth the amounts remitted to and
from Platinum US pursuant to Section 4.01(a); and

(h) the Cash Contribution.

SECTION 3.05 Closing Deliveries by the Company. At the
Closing, the Company shall deliver to St. Paul:

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EX-2.1 28th Page of 301 TOC 1st Previous Next ↓Bottom Just 28th
(a) executed copies of all Ancillary Agreements;

(b) certificates representing the St. Paul Shares
acquired by St. Paul or a St. Paul Designee, registered in the name of St. Paul
or the appropriate St. Paul Designees;

(d) evidence reasonably satisfactory to St. Paul that all
consents and approvals as set forth in Schedule 6.02(b) have been obtained and
are in full force and effect;

(e) the certificate specified in Section 9.02(c); and

(f) a receipt evidencing receipt of the Cash
Contribution.

SECTION 3.06 Subsequent Exercise of Over-Allotment Option. (a)
If the Underwriters exercise their Over-Allotment Option at any time after the
Closing Date, a second closing (the "Second Closing") will be held at the
offices of Sullivan & Cromwell, 125 Broad Street, New York, New York, at 9:00
A.M., New York time, on the date of the delivery of the Optional Public Offering
Shares or at such other place (outside the United Kingdom) or such other time or
on such other date as St. Paul and the Company may agree upon in writing (the
day on which the Second Closing takes place being the "Second Closing Date").

(b) On the Second Closing Date, the Company shall deliver
to St. Paul (i) a certificate representing the Optional St. Paul Shares acquired
by St. Paul or one or more St. Paul Designees, registered in the name of St.
Paul or the appropriate St. Paul Designees, (ii) an opinion with respect to the
Optional St. Paul Shares in form and substance identical to the St. Paul
Investment Opinion and (iii) a bring-down certificate in form and substance
identical to the certificate specified in Section 9.02(c).

(c) On the Second Closing Date, St. Paul shall deliver to
the Company (i) a bring-down certificate in form and substance identical to the
certificate specified in Section 9.03(c) and (ii) Optional Cash Contribution.

ARTICLE IV

SEPARATION

SECTION 4.01 Settlement of Intercompany Accounts. (a) Shortly
prior to the Closing Date, Platinum US shall remit to St. Paul and any
Post-Closing Subsidiaries of St. Paul, as applicable, all amounts estimated to
be owing as of the Closing Date by Platinum US to St. Paul or such Post-Closing
Subsidiaries, and St. Paul and all Post-Closing Subsidiaries of St. Paul, as
applicable, shall remit to Platinum US all amounts estimated to be owing as of
the Closing Date by St. Paul or such Post-Closing Subsidiaries of St. Paul to
Platinum US.

(b) As soon as reasonably practicable, but in no event
later than 45 days following the Closing Date, St. Paul covenants that it shall
prepare and deliver to the Company a balance sheet as of the Closing Date (the
"Closing Balance Sheet"). The Closing Balance Sheet shall be prepared in
accordance with accounting practices prescribed or permitted for insurance

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companies by the Maryland insurance regulatory authorities, which have been
applied consistent with the financial statements of past periods, including the
May 31, 2002 balance sheet delivered pursuant to Section 3.04(f) and shall in
all material respects fairly present the financial condition of Platinum US as
of its date.

SECTION 4.02 Removal of Platinum US from Intercompany
Agreements and Representation. Except as contemplated herein, effective as of
the Closing Date, all agreements between or among St. Paul and its Post-Closing
Subsidiaries, on the one hand, and Platinum US, on the other hand, shall
terminate as to Platinum US, and Platinum US shall cease being a party to any of
the agreements specified on Schedule 4.02. After the Closing Date, Platinum US
shall not have any liability under any such agreement to St. Paul or any
Post-Closing Subsidiary of St. Paul and neither St. Paul nor any Post-Closing
Subsidiary of St. Paul shall have any liability under any such agreement to
Platinum US. St. Paul represents that such agreements are the only agreements
that it or any St. Paul Subsidiary has with Platinum US.

SECTION 4.03 Discontinuing of Insurance Coverage. Effective as
of the Closing Date, Platinum US will cease to be covered under any insurance
policy covering St. Paul and any of its affiliates, including directors' &
officers' and errors & omissions insurance.

ARTICLE V

REPRESENTATIONS AND WARRANTIES
OF ST. PAUL

St. Paul represents and warrants to the Company, as to itself,
each of Fire and Marine, Platinum US, Mountain Ridge, St. Paul Re (UK), each St.
Paul Designee and each St. Paul Licensor (such subsidiaries, the "St. Paul
Pre-Closing Subsidiaries"), that the statements contained in this Article V are
true and correct as of the date of this Agreement and will be true and correct
as of the Closing Date:

SECTION 5.01 Organization, Authority and Qualification.

(a) Each of St. Paul and the St. Paul Pre-Closing
Subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and in good standing in all
jurisdictions in which the failure to qualify or be in good standing could
materially adversely affect the consummation or the validity of the transactions
provided for in this Agreement or any of the Ancillary Agreements.

(b) St. Paul has full corporate power and authority and
has taken all corporate action necessary to execute and deliver this Agreement
and will have taken all corporate action necessary to execute and deliver the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder. This Agreement has been, and each of the Ancillary
Agreements to which St. Paul is a party will be, duly authorized, executed and
delivered by St. Paul; and, assuming due authorization, execution and delivery
by all other parties to such agreement, each of this Agreement and such
Ancillary Agreements constitutes or will constitute, as the case may be, the
valid and legally binding obligation of St. Paul, enforceable against St. Paul
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer,

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reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles, except that no
representation or warranty is made regarding the indemnification and
contribution provisions of this Agreement or of the Registration Rights
Agreement.

(c) Each of the St. Paul Pre-Closing Subsidiaries has
full corporate power and authority and will have taken all corporate action
necessary to execute and deliver each of the Ancillary Agreements to which it is
a party and to perform its obligations thereunder. Each of the Ancillary
Agreements to which any of the St. Paul Pre-Closing Subsidiaries is a party will
be duly authorized, executed and delivered by the appropriate St. Paul
Pre-Closing Subsidiary and, assuming due authorization, execution and delivery
by all other parties to such agreement, and, in the case of Platinum US,
assuming also that the Maryland Insurance Commission shall have issued an order
permitting Platinum US to underwrite accident and health insurance prior to
completion of the Public Offering, will constitute the valid and legally binding
obligation of such St. Paul Pre-Closing Subsidiary, enforceable against such St.
Paul Pre-Closing Subsidiary in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.

SECTION 5.02 Financial and Convention Statements. The Annual
Convention Statements required to be filed by Platinum US for the years 2000 and
2001, and the Quarterly Convention Statements required to be filed by Platinum
US during the period January 1, 2002 to the date hereof, (i) have been duly
filed with the Maryland insurance regulatory authorities and with all other
insurance regulatory authorities as required, (ii) were prepared in accordance
with accounting practices prescribed or permitted for insurance companies by the
Maryland insurance regulatory authorities, which have been applied on a basis
consistent with the past periods, and (iii) present fairly, in accordance with
such practices, the statutory financial position of Platinum US as at the date
of, and the results of its operations for the period covered by, such Annual or
Quarterly Convention Statements.

SECTION 5.03 No Conflict. The authorization, execution,
delivery and performance of this Agreement and the Ancillary Agreements by St.
Paul and the St. Paul Pre-Closing Subsidiaries, as applicable, do not and will
not:

(a) violate, conflict with or result in the breach of any
provision of the certificate of incorporation or by-laws (or similar
organizational documents) of St. Paul or the St. Paul Pre-Closing Subsidiaries,

(b) conflict with or violate in any material respect any
law or Governmental Order applicable to St. Paul or the St. Paul Pre-Closing
Subsidiaries or any of their respective assets, properties or businesses, or

(c) materially conflict with, result in any material
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or require any
authorization from, or notification to, any Governmental Authority, or any
consent under, any note, bond, mortgage or indenture, contract, agreement,
lease, sublease, license, permit, franchise or other instrument or arrangement
to which St. Paul or any

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of the St. Paul Pre-Closing Subsidiaries is a party or by which any of
such assets or properties is bound or affected, which would have a material
adverse effect on the ability of St. Paul or any of the St. Paul Pre-Closing
Subsidiaries to consummate the transactions contemplated by this Agreement or
the Ancillary Agreements.

SECTION 5.04 Transferred Assets. (a) St. Paul, directly or
indirectly has, and at the Closing the Company or its designees will receive,
good and marketable title to all of the Transferred Assets (other than the Newly
Hired Employees and the Renewal Rights and the related information) except as
provided in Schedule 5.04(a)(i), in each case free and clear of any Encumbrance,
except as set forth on Schedule 5.04(a)(ii).

(b) With respect to the Platinum US Shares, United States
Fidelity and Guaranty Company ("USF&G"), an indirect wholly owned Subsidiary of
St. Paul, has good and marketable title to the Platinum US Shares, free and
clear of any Encumbrances. Assuming Platinum Finance has the requisite power and
authority to be the lawful owner of the Platinum US Shares, upon delivery to
Platinum Finance at the Closing of certificates representing the Platinum US
Shares, duly endorsed by USF&G for transfer to Platinum Finance, good and
marketable title to the Platinum US Shares will pass to Platinum Finance, free
and clear of any Encumbrances, other than those arising from acts of the Company
or Platinum Finance. The Platinum US Shares constitute validly issued, fully
paid and non-assessable shares of the capital stock of Platinum US and are not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of the Platinum US Shares and there are no
options, warrants or any other rights to acquire the Platinum US Shares are
outstanding.

SECTION 5.05 St. Paul Investment. (a) St. Paul represents and
warrants that (i) it is capable of evaluating the merits and risks of the
acquisition of the St. Paul Shares and the St. Paul Option, (ii) it is acquiring
the St. Paul Shares and the St. Paul Option for its own account, as principal,
(iii) it is acquiring the St. Paul Shares and the St. Paul Option for investment
and not with a view to the resale or distribution in a public offering of all or
any part of the St. Paul Shares or the St. Paul Option, and (iv) it has not
sought the advice of the Company with respect to the tax, accounting, legal or
other regulatory or investment issues relating to the St. Paul Shares or the St.
Paul Option it expects to acquire pursuant to the St. Paul Investment and has
relied only on the advice of its own legal counsel and other advisors.

(b) St. Paul acknowledges that (i) the sale of the St.
Paul Shares and the St. Paul Option and the Common Shares issuable upon exercise
of the St. Paul Option will not be registered under any U.S. federal or state
securities laws, (ii) the St. Paul Shares and the St. Paul Option will be
offered and sold in reliance upon the exemptions from registration provided by
the no-action letters regarding Black Box Incorporated (publicly available June
26, 1990) and Squadron, Ellenoff, Plesent & Lehrer (publicly available February
28, 1992), and applicable exemptions under state securities laws, and (iii) that
the certificates for the Common Shares and the St. Paul Option purchased
hereunder and the Common Shares issuable upon exercise of the St. Paul Option
will bear a legend noting that they may not be resold or transferred unless
registered under the Securities Act or pursuant to a valid exemption therefrom.

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SECTION 5.06 Taxes.

(a) No material Tax liens with respect to the Transferred
Assets or assets of Platinum US have been filed.

(b) All material Tax Returns filed by or with respect to
Platinum US have been timely filed, and all such Tax Returns are true, correct
and complete in all material respects. Platinum US has timely paid (or there has
been paid on its behalf) all material Taxes that are due, or claimed or asserted
by any taxing authority to be due, from or with respect to it for the
Pre-Closing Periods.

(c) Except as disclosed in Schedule 5.06(c), there are no
outstanding agreements, waivers, or arrangements extending the statutory period
of limitation applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to Platinum US for any taxable
period.

(d) Except as disclosed in Schedule 5.06(d), Platinum US
is not a party to, is not bound by, and has no obligation under, any Tax
allocation or sharing agreement or similar contract or arrangement.
Notwithstanding any disclosure contained in the Schedules to the Agreement, St.
Paul represents and warrants that at the Closing Platinum US shall not be a
party to, be bound by or have any obligation under, any Tax allocation or
sharing agreement or similar contract or arrangement.

(e) Platinum US has materially complied with all
applicable laws, rules, and regulations relating to the payment and withholding
of Taxes and has timely withheld from employee wages and paid over to the proper
governmental authorities all material amounts required to be so withheld and
paid over.

(f) Except as disclosed in Schedule 5.06(f), there is no
deficiency, claim, audit, examination, action, suit, proceeding or investigation
in progress or pending or, to the knowledge of Platinum US, threatened against
or with respect to Platinum US in respect of any Taxes.

(g) No claim has ever been made by any taxing authority
with respect to Platinum US in a jurisdiction where Platinum US does not file
Tax Returns that Platinum US is or may be subject to taxation by that
jurisdiction which has not been resolved.

(h) Except as disclosed in Schedule 5.06(h), Platinum US
has not been a member of an affiliated group filing consolidated, combined or
unitary Tax Returns other than a group for which St. Paul was the common parent.

(i) Platinum US has not distributed the stock of any
corporation in a transaction satisfying the requirements of Section 355 of the
Code since April 16, 1997, and the stock of Platinum US has not been distributed
in a transaction satisfying the requirements of Section 355 of the Code since
April 16, 1997.

(j) Platinum US is not a party to any agreement, contract
or arrangements that could result, directly or indirectly, on account of the
transactions contemplated hereunder,

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separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code, except for Platinum
US's consulting contract with Mr. Newman.

(k) Between the date of this Agreement and the Closing
Date, without the prior written consent of the Company (such consent not to be
unreasonably withheld), Platinum US will not change any Tax accounting method or
change any material Tax election or settle or compromise any material Tax
liability.

(l) Platinum US has no Subsidiaries.

SECTION 5.07 Contracts of Platinum US. Except for the
contracts listed on Schedule 5.07, Platinum US is not party to any contract with
any Person other than St. Paul or a St. Paul Subsidiary.

SECTION 5.08 No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement and the
Ancillary Agreements, neither St. Paul nor any other Person makes any express or
implied representation or warranty on behalf of or with respect to St. Paul or
the Transferred Business, and St. Paul hereby disclaims any representation or
warranty not contained herein or therein.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants, as to itself and as to
its Post-Closing Subsidiaries except as to Platinum US, to St. Paul that the
statements contained in this Article VI are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date:

SECTION 6.01 Organization, Authority and Qualification.

(a) The Company and each of its Post-Closing Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation, and in good standing in all jurisdictions in
which the failure to qualify or be in good standing could materially adversely
affect the consummation or the validity of the transactions provided for in this
Agreement.

(b) The Company has full corporate power and authority
and has taken all corporate action necessary to execute and deliver this
Agreement and will have taken all corporate action necessary to execute and
deliver the Ancillary Agreements to which it is a party and to perform its
obligations hereunder and thereunder. This Agreement has been, and each of the
Ancillary Agreements to which the Company is a party will be, duly authorized,
executed and delivered by the Company; and, assuming due authorization,
execution and delivery by all other parties to such agreement, each of this
Agreement and such Ancillary Agreements constitutes or will constitute, as the
case may be, the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general

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applicability relating to or affecting creditors' rights and to general equity
principles, including the exercise of judicial discretion in connection
therewith except that no representation or warranty is made regarding the
indemnification and contribution provisions of this Agreement or the
Registration Rights Agreement.

(c) Each of the Company's Post-Closing Subsidiaries will
have full corporate power and authority and will have taken all corporate action
necessary to execute and deliver each of the Ancillary Agreements to which it is
a party and to perform its obligations thereunder. Each of the Ancillary
Agreements to which any of the Company's Post-Closing Subsidiaries is a party
will be duly authorized, executed and delivered by the appropriate Post-Closing
Subsidiary of the Company and, assuming due authorization, execution and
delivery by all other parties to such agreement, will constitute the valid and
legally binding obligation of such Post-Closing Subsidiary of the Company,
enforceable against such Post-Closing Subsidiary in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, including the exercise of
judicial discretion in connection therewith.

SECTION 6.02 No Conflict. The execution, delivery and
performance of this Agreement and the Ancillary Agreements by the Company and
its Post-Closing Subsidiaries, as applicable, do not and will not:

(a) violate, conflict with or result in the breach of any
provision of the certificate of incorporation, by-laws (or similar
organizational documents) of the Company and its Post-Closing Subsidiaries, as
applicable,

(b) conflict with or violate any law or Governmental
Order applicable to the Company or its Post-Closing Subsidiaries or any of their
respective assets, properties or businesses, except that the performance of this
Agreement and the execution, delivery and performance of certain of the
Ancillary Agreements by the Company and its Post-Closing Subsidiaries may not
occur until the regulatory approvals specified in Schedule 6.02(b) are obtained,
or

(c) conflict with, result in any material breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or require any authorization from or
notification to, any Governmental Authority, or any consent under, any note,
bond, mortgage or indenture, contract, agreement, lease, sublease, license,
permit, franchise or other instrument or arrangement to which the Company and
its Post-Closing Subsidiaries, as applicable, are party or by which any of such
assets or properties is bound or affected, which would have a material adverse
effect on the ability of the Company or any of its Post-Closing Subsidiaries to
consummate the transactions contemplated by this Agreement except that the
performance of this Agreement and the execution, delivery and performance of
certain of the Ancillary Agreement by the Company and its Post-Closing
Subsidiaries may not occur until the regulatory approvals specified in Schedule
6.02(b) are obtained.

SECTION 6.03 St. Paul Investment. (a) The Company represents
and warrants to St. Paul that, assuming St. Paul has the requisite power and
authority to be the lawful owner of the St. Paul Shares, upon issuance and
delivery to St. Paul or its designees at the Closing of

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certificates representing the Firm St. Paul Shares and the Optional St. Paul
Shares, as applicable, (i) good and marketable title to such St. Paul Shares
will pass to St. Paul or its designees free and clear of any Encumbrances other
than those arising from acts of the Company or its Post-Closing Subsidiaries,
and (ii) the St. Paul Shares will constitute duly and validly issued, fully paid
and non-assessable shares of the capital stock of the Company.

(b) The Company acknowledges that (i) the sale of the St.
Paul Shares, the St. Paul Option and any Common Shares issuable upon exercise of
the St. Paul Shares will not be registered under any U.S. federal or state
securities laws, (ii) the St. Paul Shares and the St. Paul Option will be
offered and sold in reliance upon the exemptions from registration provided by
the no-action letters regarding Black Box Incorporated (publicly available June
26, 1990) and Squadron, Ellenoff, Plesent & Lehrer (publicly available February
28, 1992), and applicable exemptions under state securities laws, and (iii) that
the certificates for the Common Shares and St. Paul Option purchased hereunder,
and any Common Shares issued upon exercise of the St. Paul Option, will bear a
legend noting that they may not be resold or transferred unless registered under
the U.S. Securities Act of 1933 or pursuant to a valid exemption therefrom.

SECTION 6.04 Internal Retrocession Agreements. The Company
represents that it intends to cause each of Platinum US and Platinum UK to enter
into a Quota Share Retrocession Agreement between such subsidiary and Platinum
Bermuda, substantially in the form of Exhibit 6.04, pursuant to which Platinum
Bermuda will reinsure a portion of the reinsurance liabilities of such
subsidiary under all reinsurance contracts written by such subsidiary after the
Closing Date excluding business subject to the Quota Share Retrocession
Agreements.

SECTION 6.05 No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement and the
Ancillary Agreements, neither the Company nor any other Person make any express
or implied representation or warranty on behalf of or with respect to the
Company or any of the Post-Closing Subsidiaries, and the Company hereby
disclaims any representation or warranty not contained herein or therein.

ARTICLE VII

NON-COMPETITION; USE OF NAME;
ADMINISTRATION OF RUN-OFF
CONTRACTS; INSURANCE MATTERS

SECTION 7.01 Non-Competition. (a) Except as set forth in this
Agreement or any of the Ancillary Agreements, for a period of two years
following the Closing Date (the "Restricted Period") neither St. Paul nor any of
its Post-Closing Subsidiaries nor any of their respective directors, officers or
agents may

(i) offer, issue, sell, refer or promote,
directly or indirectly, any contracts, treaties or agreements of
reinsurance of the same type as the Reinsurance Agreements or of the
same type as those for which St. Paul has granted Renewal Rights

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to the Company provided that the Company or its Post-Closing
Subsidiaries continue to provide, during the Restricted Period,
reinsurance coverage of such types to third parties;

(ii) employ, offer to employ or solicit with a
view to employment any of the individuals listed or individuals holding
positions listed on Schedule 7.01(a)(ii) to this Agreement; or

(iii) use or disclose to any Person other than the
Company or its Post-Closing Subsidiaries, any Transferred Business
Confidential Information except in connection with the administration
of (x) the Reinsurance Agreements, (y) the Run-Off Business or (z) any
retained Liabilities provided that St. Paul, its Post-Closing
Subsidiaries and their respective directors, officers and agents will
disclose Transferred Business Confidential Information only in the
ordinary course of business, consistent with past practice including in
connection with resolving claims and the purchase of retrocessional
coverage and provided, further, that St. Paul, its Post-Closing
Subsidiaries and their respective directors, officers and agents shall
use reasonable efforts to avoid providing Transferred Business
Confidential Information to a competitor of the Company under
circumstances reasonably likely to materially impair the value of the
Renewal Rights;

provided that, in the case of Transferred Business Confidential Information that
relates to the Reinsurance Agreements, the Restricted Period shall be
indefinite.

(b) Notwithstanding any other provision of this Section
7.01 to the contrary, neither St. Paul nor any of its Post-Closing Subsidiaries
is prohibited from:

(i) engaging in any line of business in which it
is engaged immediately after the completion of the Public Offering and
for which Renewal Rights were not transferred hereunder, including,
without limitation, the administration of reinsurance contracts with
inception dates prior to January 1, 2002 (the "Run-off Business") and
the Reinsurance Agreements (but not including any renewals thereof),
purchasing reinsurance for its own account, reinsurance business
written through St. Paul's Discover Re operation and Lloyd's of London
operation and property catastrophe facultative reinsurance business
written by St. Paul's CATRisk Property division;

(ii) acquiring any Person or, subject to the
limitation in (iii) below, any interest in any Person engaged in any
line of business except for an acquisition of an interest of more than
49% of any Person that generated 50% or more of its gross revenues,
excluding investment income and realized investment gains and losses,
in its most recent fiscal year for which financial statements are
available, by writing property or casualty reinsurance (a "Permitted
Acquiree"), provided that any Permitted Acquiree may not use any marks,
designs, logos, slogans, names, words or letters which include the
words "St. Paul", "USF&G" or "F&G" or those that are suggestive or,
derivative thereof, or any logo or mark identified with "St. Paul",
"USF&G" or "F&G" (except as may be required by law) in connection with
its reinsurance business, if any, provided further, however, that St.
Paul and any of its Post-Closing Subsidiaries may acquire an

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interest of more than 49% of a Person that is not a Permitted Acquiree
if St. Paul or such Post-Closing Subsidiary promptly divests the
property or casualty reinsurance operations of such Person; or

(iii) soliciting, offering, issuing, selling,
purchasing or referring any contracts of reinsurance of any type to,
from or with any of its Affiliates or engaging in any reinsurance
activities in connection with the Run-off Business (other than renewals
thereof) or with finite business which is either covered by a Quota
Share Retrocession Agreement or which the Company and its Post-Closing
Subsidiaries declines to reinsure.

(c) During the Restricted Period neither St. Paul nor any
of its Post-Closing Subsidiaries shall sponsor or assist, directly or
indirectly, in the sponsorship of a newly formed property or casualty reinsurer
for so long as St. Paul continues to own 10% or more of the outstanding Common
Shares.

(d) Section 7.01(a)(i) and (ii) shall not be binding upon
a Post-Closing Subsidiary of St. Paul after the time such Person ceases to be a
Post-Closing Subsidiary of St. Paul. For avoidance of doubt, Section 7.01(a)
also does not apply to any Person which on or after the Closing Date becomes an
Affiliate (other than a Post-Closing Subsidiary) of St. Paul, including any
Person that acquires all or substantially all of the capital stock or assets of
St. Paul through merger, consolidation, tender offer, acquisition of assets or
otherwise, provided, however, that Section 7.01(a)(ii) and (iii) shall apply to
such Person.

(e) Transferred Business Confidential Information shall
not include information relating to the Transferred Business which is or becomes
generally known on a non-confidential basis provided that the source of such
information was not bound by a confidentiality agreement or other obligation of
confidentiality. If St. Paul, any of its Post-Closing Subsidiaries or any of
their respective directors, officers or agents or any Affiliate of St. Paul is
legally requested or required under an order or subpoena issued by a court,
administrative agency or arbitration panel (through oral examination,
interrogatories, requests for information or documents, civil investigation
demand or other legal, administrative or arbitration processes) to disclose any
Transferred Business Confidential Information, St. Paul shall provide the
Company with prompt written notice of the request, requirement, subpoena or
order to permit the Company (if it so elects) to seek an appropriate protective
order preventing or limiting disclosure. If the Company seeks such an order or
takes other steps to avoid or limit disclosure, St. Paul shall cooperate with
the Company at the Company's expense. If, in the absence of such protective
order, St. Paul, is compelled to disclose any Transferred Business Confidential
Information, St. Paul may disclose such Transferred Business Confidential
Information without liability hereunder.

(f) St. Paul and its Post-Closing Subsidiaries shall
treat any Transferred Business Confidential Information with the same degree of
care with which it treats its own confidential information.

(g) The Company and St. Paul agree that money damages
would not be a sufficient remedy for any breach of this Section 7.01 by St. Paul
or any of its Post-Closing Subsidiaries or any of its or such Post-Closing
Subsidiaries' directors, officers or agents, and

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that, in addition to all other remedies, the Company shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach.

SECTION 7.02 Use of Names; Non-Disparagement. (a) Commencing
on the Closing Date, neither the Company nor any of its Post-Closing
Subsidiaries and Affiliates may use any marks, designs, logos, slogans, names,
words or letters which include the words "United States Fidelity and Guaranty",
"St. Paul", "Fire and Marine" or those that are suggestive or derivative
thereof, except (i) as may be required by Law, (ii) for the purposes of
historical identification in materials not designed as advertising or
solicitation, (iii) as provided under the Transitional Trademark License
Agreement, and (iv) pursuant to the Underwriting Management Agreement and the UK
Underwriting Management Agreement.

(b) The Company shall not use and shall cause its
Post-Closing Subsidiaries to refrain from using any printed materials or other
means of communication which state, suggest or imply any affiliation with St.
Paul or any of its Subsidiaries following the Closing other than references to
St. Paul's ownership of the St. Paul Shares or to this Agreement, the
Reinsurance Agreements or the Ancillary Agreements or the subject matter
thereof, except as provided pursuant to the UK Underwriting Management
Agreement.

(c) The Company and St. Paul each agree that neither it
nor any of its Subsidiaries shall make any statement that would reasonably be
viewed as intended to be disparaging of the business, reputation or good name of
the other.

SECTION 7.03 Standard for Administration of Run-off Business.
St. Paul shall cause its Post-Closing Subsidiaries to administer the Run-off
Business at levels of care and attention and with operating procedures that are
consistent with, the practices of St. Paul in respect of other business of St.
Paul. St. Paul shall maintain all licenses and authorization required for it to
administer the Run-off Business.

SECTION 7.04 Quotations for Certain Insurance Coverage. St.
Paul agrees that one or more of its Post-Closing Subsidiaries shall provide
quotations to the Company and its Subsidiaries, at normal market rates for
similarly situated Persons, for workers compensation, general liability and
property insurance coverages for the period commencing on the Closing Date and
ending December 31, 2003.

ARTICLE VIII

TAX MATTERS

SECTION 8.01 Taxes of Platinum US. (a) St. Paul shall be
responsible for, shall pay or cause to be paid, and shall indemnify the Company
and each of its Post-Closing Subsidiaries against any and all Pre-Closing Taxes.
"Pre Closing Taxes" shall mean any and all Taxes (i) imposed on the St. Paul
Group (other than Platinum US) for any taxable year, (ii) that relate to
Platinum US or for which Platinum US could be liable and that in both cases are
for taxable periods or portions thereof ending on or before the Closing Date, or
(iii) to the extent not covered by clauses (i) and (ii) above, directly related
to the Transferred Assets and arising in taxable periods or portions thereof
ending on or before the Closing Date ("Pre-Closing Periods");

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provided, however, that in each case under clauses (i), (ii) and (iii) above
Taxes shall not include Taxes covered by Section 8.02. In the case of Taxes
attributable to taxable periods beginning on or before and ending after the
Closing Date ("Straddle Periods"), if any, the Taxes for the Pre-Closing Period
shall be computed as if such taxable period ended on the date of the Closing.
Not later than five Business Days before the due date for the payment (including
in connection with estimated payments) of any Pre-Closing Taxes, St. Paul shall
pay to the Company or any of its Post-Closing Subsidiaries an amount equal to
any such Pre-Closing Taxes which are payable by the Company or any of its
Post-Closing Subsidiaries.

(b) The Company shall be responsible for (i) any and all
Taxes of Platinum US that relate to Platinum US or for which Platinum US could
be liable other than Pre-Closing Taxes and (ii) any and all Taxes directly
related to the Transferred Assets and arising in taxable periods or portions
thereof beginning on or after the Closing Date. To the extent that any Taxes
other than Pre-Closing Taxes have been pre-paid on or before the Closing, the
Company shall pay to St. Paul the amount of such prepaid Taxes that do not
constitute Pre-Closing Taxes.

(c) St. Paul shall include the income of Platinum US for
the Pre-Closing Period in St. Paul's federal consolidated Tax Returns and any
state consolidated, combined or unitary Tax Returns that are required and that
include (i) Platinum US and (ii) any other member of St. Paul's affiliated group
other than Platinum US (the "Consolidated Returns"), and shall file and be
responsible for remitting all Taxes reflected on such Consolidated Returns. St.
Paul shall file or cause to be filed all Tax Returns required to be filed by or
with respect to Platinum US on or before the Closing Date and shall pay all
Taxes due with respect thereto. All items relating to Platinum US and included
in Tax Returns of or with respect to Platinum US for Pre-Closing Periods
(including the Platinum US pro forma with respect to Consolidated Returns)
prepared by St. Paul pursuant to this Section 8.01 shall be reflected in a
manner consistent with past practices. St. Paul shall provide to the Company, at
least 10 days prior to the due date (including extensions) for the filing of St.
Paul's federal consolidated tax return for the taxable year 2002, a copy of the
2002 pro forma federal income tax return of Platinum US prepared consistent with
past practice. St. Paul shall not amend a pro forma income tax return of
Platinum US for a Pre-Closing Period in which Platinum US was included in the
federal consolidated income tax return of St. Paul or in any other consolidated,
combined or group tax return with St. Paul or any of its Affiliates, in a manner
which causes an increase in Taxes of Platinum US for a period ending after the
Closing, without the consent of the Company, which shall not be unreasonably
withheld. The Company shall file or cause to be filed all other Tax Returns
required to be filed by or with respect to Platinum US. With respect to Tax
Returns for Straddle Periods, such Tax Returns will be duly and timely filed by
the Company, and the Company will use its commercially reasonable best efforts
to assure that such Tax Returns will be correct, accurate and complete in all
material respects. The Company shall furnish a completed copy of such Tax
Returns to St. Paul for St. Paul's approval (not to be unreasonably withheld or
delayed) within a reasonable time prior to the due date of such returns. Except
as required by applicable law, the Company shall not take a position with
respect to any item on any Tax Return of Platinum US for any Straddle Period
which it is notified in writing by St. Paul is inconsistent with the position
taken with respect to such item on a prior Tax Return or, if inconsistent, will
obtain St. Paul's prior written consent which shall not be unreasonably
withheld.

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(d) Any refunds of Taxes with respect to Platinum US paid
for any period ending on or before the Closing Date (treating such date as the
end of a short taxable year for this purpose) shall be for the account of St.
Paul. The Company shall, if St. Paul so requests and at St. Paul's expense,
cause the relevant entity (the Company, Platinum US or any successor) to file
for and obtain any refunds to which St. Paul is entitled hereunder, including
through the prosecution of any administrative or judicial proceeding which St.
Paul, in its sole and absolute discretion, chooses to direct such entity to
pursue. The Company shall permit St. Paul to control (at St. Paul's expense) the
prosecution of any such refund claimed, and when deemed appropriate by St. Paul,
shall cause the relevant entity to authorize by appropriate power of attorney
such person as St. Paul shall designate to represent such entity with respect to
such refund claimed. Without imposing any duty of investigation on the Company,
the Company shall, and shall cause Platinum US to, notify St. Paul of the
existence of any facts known to the Company that would constitute a reasonable
basis for claiming a refund of Taxes to which St. Paul is entitled hereunder.
The Company shall forward to St. Paul any such refund promptly after the refund
is received.

SECTION 8.02 Conveyance Taxes. The Company and St. Paul shall
each be severally liable for one half of any real property transfer or gains,
sales, use, transfer, value added, stock transfer, and stamp taxes, any
transfer, recording, registration, and other fees and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement. Except with respect to any U.K. stamp duty that may arise relating to
the UK Business Transfer Agreement, with the cooperation of St. Paul, the
Company shall file such applications and documents as shall permit any such Tax
to be assessed and paid on or prior to the Closing Date in accordance with any
available pre-sale filing procedure. St. Paul shall execute and deliver all
instruments and certificates necessary to enable the Company to comply with the
foregoing. The Company shall complete and execute a resale or other exemption
certificate with respect to the inventory items sold hereunder, and shall
provide St. Paul with executed copies thereof.

SECTION 8.03 Tax Proceedings. (a) The Company shall promptly
notify St. Paul in writing upon receipt by the Company or any of its Affiliates,
including Platinum US, of notice of any pending or threatened audit, assessment,
or judicial or administrative proceeding involving Taxes ("Tax Proceeding") with
respect to Platinum US for which St. Paul would be required to indemnify the
Company pursuant to Section 8.01, provided that the failure of the Company to
give such notice shall not relieve St. Paul of its indemnification obligation
under Section 8.01, except to the extent St. Paul is materially prejudiced
thereby.

(b) St. Paul shall have the right to assume sole control
over a Tax Proceeding to the extent it relates to Pre-Closing Taxes which may be
the subject of indemnification by St. Paul pursuant to Section 8.01 and to
employ counsel of its choice at its expense. St. Paul shall not compromise or
settle any such Tax Proceeding without the prior written consent of the Company,
which consent shall not be unreasonably withheld. If St. Paul shall not assume
the defense of such Tax Proceeding, then the Company may assume sole control
over such Tax Proceeding, without relieving St. Paul of its indemnification
obligation under Section 8.01, provided that St. Paul may participate in the
defense at its own expense.

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(c) St. Paul shall have the right to participate in, but
not control, at its own expense, the defense of any Tax Proceeding with respect
to a Straddle Period which may be the subject of indemnification by St. Paul
pursuant to Section 8.01(a) and, with the written consent of the Company, and at
St. Paul's sole expense, may assume the entire defense of such Tax Proceeding.
Neither party may agree to settle any such Tax Proceeding without the prior
written consent of the other party.

SECTION 8.04 Allocation of Consideration. St. Paul shall
deliver to the Company a statement setting forth the allocation of the aggregate
consideration received by St. Paul under this Agreement within 30 days of the
receipt by St. Paul of a third party appraisal of the Transferred Assets. Such
allocation shall be determined in accordance with Section 1060 of the Code and
the Regulations promulgated thereunder, to the extent applicable. The Company,
St. Paul and the Parties each agree to prepare and file all Tax Returns in
respect of all affected Taxable Periods in a manner consistent with the
allocation statement prepared by St. Paul.

SECTION 8.05 Section 197 Election. Upon the request of the
Company and to the extent applicable, St. Paul agrees to elect under Section
197(f)(9)(B)(ii) of the Code to (i) recognize gain on the disposition of
goodwill, going concern value and any other Section 197 intangible (as defined
in Section 197(d) of the Code), if any, for which depreciation and amortization
would not have been allowable but for Section 197, if such asset was held or
used by St Paul or any of its Subsidiaries at any time on or after July 25, 1991
and on or before August 10, 1993, and (ii) pay tax on such gain in accordance
with Section 197(f)(9)(B)(ii)(II) of the Code to the extent that such election
is necessary to enable the Company or any of its affiliates to claim
amortization deductions with respect to such asset under Section 197 of the
Code; provided, however, that St. Paul shall not be required to make such
election and/or comply with clause (ii) above if it determines in its sole
discretion that the election, or the requirements of clause (ii), would cause a
detriment to St. Paul or any of its Subsidiaries.

SECTION 8.06 Indemnification as Adjustment. The parties agree
to treat any indemnification payments made pursuant to Section 8.01 or Section
10.01 hereunder as an adjustment to the consideration given in exchange for the
Transferred Assets.

ARTICLE IX

CONDITIONS TO CLOSING

SECTION 9.01 Conditions to Obligations of St. Paul and the
Company. The obligations of St. Paul and the Company to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions:

(a) the Firm Public Offering Shares and the Firm Units
shall have been delivered;

(b) no Action shall have been commenced by any
Governmental Authority, seeking to restrain or materially and adversely alter
the transactions contemplated by this

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Agreement which, in the reasonable, good faith determination of either St. Paul
or the Company, is likely to render it impossible or unlawful to consummate such
transactions;

(c) the parties hereto, or their Subsidiaries, as
applicable, shall have executed and delivered to each other each of the
Ancillary Agreements to which they are a party; and

(d) all consents, approvals, authorizations,
registrations, licenses or qualifications set forth on Schedule 6.02(b) with any
court or governmental authority required for the consummation of the
transactions contemplated by this Agreement or any of the Ancillary Agreements
shall have been obtained, shall not contain limitations or conditions which
would materially adversely affect the ability of the Company and its
Post-Closing Subsidiaries to conduct the Transferred Business after the Closing,
and shall be in full force and effect.

SECTION 9.02 Conditions to Obligations of St. Paul. The
obligation of St. Paul to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, at or prior to the Closing, of each of
the following additional conditions:

(a) the representations and warranties of the Company
contained in this Agreement shall be true and correct, as of the date hereof and
as of the Closing Date, with the same force and effect as if made as of the
Closing Date;

(b) the covenants and agreements contained in this
Agreement and the Ancillary Agreements to be complied with by the Company and
its Post-Closing Subsidiaries (other than Platinum US) on or before the Closing
Date shall have been complied with in all material respects;

(c) St. Paul shall have received a certificate from the
Company to the effect of Sections 9.02(a) and (b) signed by the President and
Chief Executive Officer and the Chief Financial Officer of the Company;

(d) St. Paul shall have received an opinion in form and
substance satisfactory to St. Paul (the "St. Paul Investment Opinions") from
Conyers, Dill & Pearman, Bermuda counsel to St. Paul, as to the due
authorization, valid issuance and non-assessability of the St. Paul Shares, as
well as from Sullivan & Cromwell as to the exemption from the registration
requirements of the Securities Act of the Firm St. Paul Shares and, as a
condition to the Second Closing, St. Paul Investment Opinions in respect of the
Optional St. Paul Shares; and

(e) St. Paul shall have received signed releases from
Jerome T. Fadden, Steven H. Newman, Michael D. Price, William A. Robbie, Michael
E. Lombardozzi and other individuals with whom St. Paul Re shall have entered
into employment agreements following the date hereof in the form attached as
Schedule 9.02(e).

(f) all of the deliveries required to be made by the
Company at the Closing pursuant to Section 3.05 shall have been made.

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SECTION 9.03 Conditions to Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, at or prior to the Closing, of each of
the following additional conditions:

(a) The representations and warranties of St. Paul
contained in this Agreement shall be true and correct as of the Closing Date,
with the same force and effect as if made as of the Closing Date;

(b) the covenants and agreements contained in this
Agreement and the Ancillary Agreements to be complied with by St. Paul and its
Pre-Closing Subsidiaries on or before the Closing Date shall have been complied
with in all material respects;

(c) the Company shall have received a certificate from
St. Paul to the effect of Sections 9.03(a) and (b) signed by duly authorized
officers thereof;

(d) all of the deliveries required to be made by St. Paul
at the Closing pursuant to Section 3.04 shall have been made;

(e) the Company shall have received opinions in form and
substance reasonably satisfactory to the Company from Slaughter and May, A&L
Goodbody and Conyers, Dill and Pearman as to the due organization, good
standing, corporate power and authority and licensing authority of the Company
and each of its Post-Closing Subsidiaries other than Platinum US; and

(f) the Maryland Insurance Commissioner shall have
granted Platinum US permission to write accident and health insurance.

ARTICLE X

INDEMNIFICATION

SECTION 10.01 General Cross Indemnification. (a) Except as
otherwise specifically set forth in any provision of this Agreement, including
but not limited to Sections 8.01, 10.02 and 10.03, or of any Ancillary
Agreement, St. Paul shall indemnify, defend and hold harmless the Company, its
Post-Closing Subsidiaries and their respective officers, directors, employees,
representatives and agents ("Company Indemnitees") from and against any and all
Losses of such Company Indemnitee arising out of, by reason of or otherwise in
connection with (i) the St. Paul Liabilities; or (ii) any breach by St. Paul,
any of its Post-Closing Subsidiaries or any Person acting on behalf of St. Paul
or any such Post-Closing Subsidiary of any of their representations or
warranties in, or any covenant, commitment, obligation, agreement or undertaking
to be performed or complied with by any of them under this Agreement or any
Ancillary Agreement. For the avoidance of doubt indemnification under this
Section 10.01(a) does not apply with respect to any Liabilities relating to the
Employment Agreements or the Renewal Obligations; provided that with respect to
renewals of contracts, if any, within the Transferred Lines to be renewed which
had been previously written or renewed by St. Paul Re at above market rates with
the implicit or explicit expectation or understanding between the parties that
such above market rate during such period would be compensated by below market
rates applicable to future renewals of the contract St. Paul shall indemnify the
Company's affected

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Post-Closing Subsidiaries for such differential, in such amounts as agreed to by
the parties after negotiating in good faith.

(b) Except as otherwise specifically set forth in any
provision of this Agreement or any Ancillary Agreement, the Company shall
indemnify, defend and hold harmless St. Paul, its Post-Closing Subsidiaries and
their respective officers, directors, employees, representatives and agents
("St. Paul Indemnitees") from and against any and all Losses of such St. Paul
Indemnitees arising out of, by reason of or otherwise in connection with (i) the
Company Liabilities; or (ii) any breach by the Company, any of its Post-Closing
Subsidiaries or any Person acting on behalf of the Company or any such
Post-Closing Subsidiary of any of their representations or warranties in, or any
covenant, commitment, obligation, agreement or undertaking to be performed or
complied with by any of them under, of this Agreement or any Ancillary
Agreement.

(c) The indemnity obligations contained in this Section
10.01 are applicable whether or not any Action or the facts or transactions
giving rise to such Action arose prior to, on or subsequent to the date of this
Agreement.

SECTION 10.02 Registration Statement Indemnification and
Contribution. (a) Subject to Section 10.02(b) and Section 10.02(c), the Company
shall indemnify and hold harmless (which includes, for the avoidance of doubt,
the reimbursement to each St. Paul Registration Indemnitee (as defined below) of
any expenses, including legal expenses, incurred by such St. Paul Registration
Indemnitee in connection with investigating or defending against any Loss as
such expenses are incurred), to the full extent permitted by law, St. Paul, its
Post-Closing Subsidiaries, the officers, directors, employees, representatives
and agents of each of them, each Person who controls any of them (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, employees and agents of each such controlling
Person (each, a "St. Paul Registration Indemnitee"), from and against any and
all Losses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the "Company Information", being the
information (other than the St. Paul Information and the Shared Information,
each as defined below) contained in any Registration Statement or Prospectus or
the Private Offering Memorandum, or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The indemnity and reimbursement obligation under this
Section 10.02(a) will be in addition to any liability that the Company may
otherwise have.

(b) St. Paul shall indemnify and hold harmless (which
includes, for the avoidance of doubt, the reimbursement to each Company
Registration Indemnitee (as defined below) of any expenses, including legal
expenses, incurred by such Company Registration Indemnitee in connection with
investigating or defending against any Loss), to the full extent permitted by
law, the Company, its Post-Closing Subsidiaries, the officers, directors,
employees, representatives and agents of each of them, each Person who controls
any of them (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, employees, representatives
and agents of each such controlling Person (each, a "Company Registration
Indemnitee" and, together with the St. Paul Registration Indemnitees, the
"Registration Indemnitees") from and against any and all Losses (including
"Damages" (if any)

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owed by the Company to RenaissanceRe pursuant to Section 10.13 of the Investment
Agreement) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the "St. Paul Information" in any
Registration Statement or Prospectus or the Private Offering Memorandum, or in
any amendment or supplement thereto or arising out of or based upon any omission
or alleged omission to state in the St. Paul Information a material fact
required to be stated therein or necessary to make the statements in the St.
Paul Information not misleading. The indemnity and reimbursement obligation
under this Section 10.02(b) will be in addition to any liability that the St.
Paul may otherwise have. For purposes of this Article X, the "St. Paul
Information" means the information specified as such in the copy of the
preliminary prospectus attached as Schedule10.02(b) and all similar information
in any amendment or supplement thereto or any preliminary or final prospectus.

(c) St. Paul and the Company shall indemnify and hold
harmless (which includes, for the avoidance of doubt, the reimbursement to each
Registration Indemnitee of any expenses, including legal expenses, incurred by
such Company Registration Indemnitee or St. Paul Registration Indemnitee in
connection with investigating or defending against any Loss), to the full extent
permitted by law, each Company Registration Indemnitee and each St. Paul
Registration Indemnitee, as the case may be, from and against 50% of any and all
Losses (including "Damages" (if any) owed by the Company to RenaissanceRe
pursuant to Section 10.13 of the Investment Agreement) of each thereof arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact in the "Shared Information" in any Registration Statement or
Prospectus or the Private Offering Memorandum, or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state a material fact required to be stated or necessary to make the statements
in the Shared Information not misleading. For purposes of this Article X,
"Shared Information" means the information specified as such in the copy of the
preliminary prospectus attached as Schedule 10.02(c) and all similar information
in any amendment or supplement thereto or any preliminary or final prospectus;
provided, however, that if (i) any historical financial information relating to
St. Paul with respect to the nine months ended September 30, 2002 is changed
after the filing with the Commission of Amendment No. 8 to the Registration
Statement relating to the Public Offering and of Amendment No. 3 to the
Registration Statement relating to the ESU Offering, and (ii) such change to
such historical financial information necessitates a corresponding change to the
pro forma financial information with respect to the nine months ended September
30, 2002 contained in such Registration Statements, such changed pro forma
financial information based on such changed historical financial information
will be deemed to be "St. Paul Information" and not "Shared Information".

(d) If for any reason the foregoing indemnification is
unavailable to, or is insufficient to hold harmless, a Registration Indemnitee
in respect of any indemnifiable Loss, the Indemnifying Party shall contribute to
the amount paid or payable by such Registration Indemnitee as a result of any
Loss in such proportion as is appropriate to reflect the relative benefit and
relative fault of the Indemnifying Party, on the one hand, and the Registration
Indemnitee, on the other, in connection with the statements or omissions in the
Registration Statement or Prospectus or the Private Offering Memorandum that
resulted in such Loss, as well as any other relevant equitable considerations.
The relative benefit to St. Paul shall be an amount equal to the product of (1)
the number of the St. Paul Shares and (2) the initial public offering price per
share for the Public Offering Shares. The relative benefit to the Company shall
be an

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amount equal to the sum of (1) the product of (A) the number of Common Shares
issued in the Public Offering and (B) the initial public offering price of the
Public Offering Shares, (2) the product of (A) the number of Common Shares
issued to RenaissanceRe pursuant to the RenaissanceRe Investment and (B) the
initial public offering price per share of the Public Offering Shares and (3)
the product of (A) the number of Units issued in the ESU Offering and (B) $25.
The relative fault of St. Paul or the Company, as the case may be, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Indemnifying Party or by
the Registration Indemnitee and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable in respect of any Loss (including with respect to any
"Damages", if any, owed by the Company to RenaissanceRe pursuant to Section
10.13 of the Investment Agreement) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For the avoidance of doubt, a St. Paul
Registration Indemnitee may not demand any contribution from the Company for any
Losses arising out of or based upon any St. Paul Information, and the Company
may not demand any contribution from St. Paul for any Losses arising out of or
based upon any Company Information. Furthermore, any contribution between the
Registration Indemnitees with respect to any Losses arising out of or based upon
any Shared Information is limited to 50% of the amount of such Loss.

(e) Notwithstanding anything to the contrary in this
Agreement or any of the Ancillary Agreements, St. Paul's aggregate liability to
the Company Registration Indemnitees under Section 10.02 (including with respect
to any "Damages" owed by the Company to Renaissance Re pursuant to Section 10.13
of the Investment Agreement) is limited to the excess of (I) $400 million over
(II) any amounts directly paid or payable by St. Paul (x) to investors in the
Public Offering and the ESU Offering in respect of claims against St. Paul
arising under any Registration Statement or Prospectus, (y) to Renaissance Re in
connection with the Renaissance Re Investment, and/or (z) the underwriters of
the Public Offering and the ESU Offering pursuant to the indemnification,
contribution and/or expense reimbursement obligations of St. Paul arising under
the underwriting agreements for the Public Offering and the ESU Offering. For
the avoidance of doubt, the limitation in clause (I) of the preceding sentence
applies to the Public Offering, the ESU Offering and the RenaissanceRe
Investment taken together and not individually. In the event the Company is
obligated to indemnify RenaissanceRe pursuant to Section 10.13 of the Investment
Agreement with respect to "Damages" arising out of St. Paul Information or
Shared Information, St. Paul and the Company agree that (i) the payment by St.
Paul to the Company of any amounts so owing shall be segregated from other
indemnification payments (if any) made by St. Paul to the Company so that they
may be available to Renaissance Re (such segregated amounts not to exceed $40
million), and (ii) no payments shall be made by St. Paul to any Company
Registration Indemnitees or others that in the aggregate exceed $360 million
prior to the satisfaction by St. Paul of any obligation to indemnify the Company
in order to satisfy indemnification of any "Damages" prior to the termination
(pursuant to Section 10.06) of St. Paul's obligations under this Section 10.02.

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(f) Notwithstanding anything to the contrary in this
Agreement or any of the Ancillary Agreements, in the event of one or more
Company Registration Indemnitees make a claim for the indemnification,
contribution or reimbursement of expenses against St. Paul (including with
respect to any "Damages" owed by the Company to Renaissance Re pursuant to
Section 10.13 of the Investment Agreement), St. Paul's obligation to indemnify,
contribute to, or reimburse the Company Registration Indemnitees (including with
respect to any "Damages" owed by the Company to Renaissance Re pursuant to
Section 10.13 of the Investment Agreement) under Section 10.02 with respect to
such claim is conditioned on, and only payable upon, the concurrent settlement
or resolution of all claims then outstanding at the time of such settlement or
resolution against St. Paul (other than claims by the underwriters of the Public
Offering and the ESU Offering) which are then subject to the limitation on
liability set forth in Section 10.02(e) provided St. Paul continues in good
faith to seek and assist in the resolution or settlement of all such claims.

(g) Notwithstanding anything to the contrary in this
Agreement or any of the Ancillary Agreements, each St. Paul Registration
Indemnitee and each Company Registration Indemnitee shall pay the costs and
expenses of its own legal counsel retained in connection with this Section
10.02, as such costs and expenses are incurred, in each case subject to being
reimbursed by the applicable indemnifying party upon the final settlement or
resolution of all investor claims against the Company, St. Paul and the
Underwriters, in accordance with this Section.

SECTION 10.03 Limitations on Indemnification Obligations. In
addition to the limitation set forth in Section 10.02(e) with respect to St.
Paul's aggregate liability, the amount which either party hereto (an
"Indemnifying Party") is or may be required to pay to any other party (an
"Indemnitee") pursuant to Sections 10.01 and 10.02 shall be reduced (including,
without limitation, retroactively) by any Insurance Proceeds or any other
amounts actually recovered by or on behalf of such Indemnitee, in reduction of
the related Loss. If an Indemnitee has received the payment required by this
Agreement from an Indemnifying Party in respect of any Loss and has subsequently
actually received Insurance Proceeds or other amounts in respect of such Loss,
then such Indemnitee shall promptly pay to such Indemnifying Party a sum equal
to the amount of such Insurance Proceeds or other amounts actually received (up
to but not in excess of the amount of any indemnity payment made hereunder). An
insurer who would otherwise be obligated to pay any claim shall not be relieved
of the responsibility with respect thereto, or, solely by virtue of the
indemnification provisions hereof, have any subrogation rights with respect
thereto, it being expressly understood and agreed that no insurer or any other
third party shall be entitled to a "windfall" (i.e., a benefit they would not be
entitled to receive in the absence of the indemnification provisions) by virtue
of the indemnification provisions hereof.

SECTION 10.04 Procedures for Indemnification of Third Party
Claims. Procedures for indemnification of Third Party Claims shall be as
follows:

(a) If an Indemnitee receives notice or otherwise learns
of the assertion by a Person (including, without limitation, any governmental
entity) who is not a party to this Agreement or an Affiliate thereof, of any
claim or of the commencement by any such Person of any Action (a "Third Party
Claim") with respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 10.01 or 10.02 of this Agreement, such

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Indemnitee shall give such Indemnifying Party written notice thereof promptly
after becoming aware of such Third Party Claim; provided that the failure of any
Indemnitee to give notice as provided in this Section 10.04(a) shall not relieve
the Indemnifying Party of its obligations under this Article V, except to the
extent that such Indemnifying Party is prejudiced by such failure to give
notice. Such notice shall describe the Third Party Claim in as much detail as is
reasonably possible and, if ascertainable, shall indicate the amount (estimated
if necessary) of the Loss that has been or may be sustained by such Indemnitee.

(b) An Indemnifying Party may elect to defend or to seek
to settle or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days of the
receipt of notice from an Indemnitee in accordance with Section 10.04(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee of its election whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnifying Party shall not be liable to such Indemnitee under this
Article X for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that each Indemnitee may elect to
participate in such defense, at such Indemnitee's own expense and by such
Indemnitee's own counsel (which for the avoidance of doubt shall act at the
Indemnitee's expense) but provided further that an Indemnifying Party and each
Indemnitee may agree to retain common counsel. If the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and (i) in
any Indemnitee's reasonable judgment a conflict of interest between one or more
of such Indemnitees and such Indemnifying Party exists in respect of such claim,
(ii) if the identity of the Person that is the appropriate Indemnifying Party or
Indemnitee in respect of such claim is in dispute, (iii) if an Indemnitee
reasonably asserts that it believes that it may not be indemnified by the
Indemnifying Party for its entire exposure in respect of a Third Party Claim, or
(iv) if the Indemnifying Party shall have assumed responsibility for such claim
with reservations or exceptions that would materially prejudice such
Indemnitees, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel for all such
Indemnitees reasonably satisfactory to the Indemnifying Party) shall be paid by
such Indemnifying Party subject to Section 10.02(g). If an Indemnifying Party
elects not to assume responsibility for defending a Third Party Claim, or fails
to notify an Indemnitee of its election as provided in this Section 10.04(b),
such Indemnitee may defend or (subject to the remainder of this Section 10.04(b)
and Section 10.04(d)) seek to compromise or settle such Third Party Claim at the
expense of the Indemnifying Party. Neither an Indemnifying Party nor an
Indemnitee shall consent to entry of any judgment or enter into any settlement
of any Third Party Claim which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee, in the case of a
consent or settlement by an Indemnifying Party, or the Indemnifying Party, in
the case of a consent or settlement by the Indemnitee, of a written release from
all liability in respect to such Third Party Claim.

(c) If an Indemnifying Party chooses to defend any Third
Party Claim, the Indemnitee shall make available at reasonable times to such
Indemnifying Party any personnel or any books, records or other documents within
its control or which it otherwise has the ability to

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make available that are necessary or appropriate for such defense, settlement or
compromise, and shall otherwise cooperate in a reasonable manner in the defense,
settlement or compromise of such Third Party Claim.

(d) Notwithstanding anything in this Section 10.04 to the
contrary, an Indemnifying Party may not settle or compromise any claim without
the prior written consent of the Indemnitee; provided that consent to settlement
or compromise shall not be unreasonably withheld or delayed and provided further
that St. Paul's aggregate liability with respect to any such settlement or
compromise shall be subject to the provisions of Section 10.02(e) and (f). If an
Indemnifying Party notifies the Indemnitee in writing of such Indemnifying
Party's desire to settle or compromise a Third Party Claim on the basis set
forth in such notice (provided that such settlement or compromise includes as an
unconditional term thereof the giving by the claimant or plaintiff of a written
release of the Indemnitee from all liability in respect thereof) and the
Indemnitee shall notify the Indemnifying Party in writing that such Indemnitee
declines to accept any such settlement or compromise, such Indemnitee may
continue to contest such Third Party Claim, free of any participation by such
Indemnifying Party, at such Indemnitee's sole expense. In such event, the
obligation of such Indemnifying Party to such Indemnitee with respect to such
Third Party Claim shall be equal to (i) the costs and expenses of such
Indemnitee prior to the date such Indemnifying Party notifies such Indemnitee of
the offer to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the amount of any
offer of settlement or compromise which such Indemnitee declined to accept and
(B) the actual out-of-pocket amount such Indemnitee is obligated to pay
subsequent to such date as a result of such Indemnitee's continuing to pursue
such Third Party Claim.

(e) In the event of payment by an Indemnifying Party to
any Indemnitee in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim or against any other Person. Such Indemnitee
shall cooperate with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any subrogated right
or claim.

SECTION 10.05 Remedies Cumulative. The remedies provided in
this Article X shall be cumulative and shall not preclude assertion by an
Indemnitee of any other rights at law or in equity or the seeking of any and all
other remedies against any Indemnifying Party.

SECTION 10.06 Survival of Indemnities. The obligations of the
Company and St. Paul under this Article X shall survive indefinitely, provided,
however, that St. Paul's obligations under Section 10.02 shall survive until the
second anniversary of the Closing Date.

ARTICLE XI

ACCESS TO INFORMATION; FURTHER ASSURANCES

SECTION 11.01 Access to Information. From and after the
Closing Date, St. Paul shall afford to the Company and its Post-Closing
Subsidiaries and their respective

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authorized accountants, counsel and other designated representatives
(collectively, "Representatives") reasonable, and reasonably prompt, access
(including using commercially reasonable efforts to give access to Persons
possessing information) during normal business hours to all data and information
that is specifically described in writing (collectively, "Information") within
the possession of St. Paul or any Post-Closing Subsidiary of St. Paul relating
to the Company or any Post-Closing Subsidiary of the Company, insofar as such
Information is reasonably required by the Company or such Post-Closing
Subsidiary including in connection with its preparation of regulatory reports
and filings, provided, that St. Paul shall not be obliged to provide information
concerning contracts with an inception date of prior to January 1, 2002 other
than: (i) copies of the underwriting files for contracts that were underwritten
by St. Paul Re in the 1997, 1998, 1999, 2000 and 2001 underwriting years and
that are within the Transferred Lines or the Excluded Classes as set forth in
Schedule 11.01; (ii) aggregate loss data for contracts that are within the
Transferred Lines or the Excluded Classes upon the Company's representation that
such information is required in connection with its business; and (iii) St. Paul
will also provide access to the underwriting files (but shall not provide copies
thereof) for contracts written by St. Paul Re within the Transferred Lines or
the Excluded Classes in underwriting years prior to 1997 upon the Company's
representation that it requires access to such information in connection with
its business. For greater certainty, St. Paul shall provide monthly aggregate
claims information relating to any individual contract having an inception date
that is prior to January 1, 2002; however, nothing herein shall require that St.
Paul share or provide any information concerning individual claims. Similarly,
from and after the Closing Date, the Company shall afford to St. Paul, any
Post-Closing Subsidiary of St. Paul and their respective Representatives
reasonable access (including using commercially reasonable efforts to give
access to Persons possessing information) during normal business hours to
Information within the Company's or any Post-Closing Subsidiary of the Company's
possession that is specifically described in writing relating to St. Paul or any
Post-Closing Subsidiary of St. Paul, insofar as such Information is reasonably
required by St. Paul or a Post-Closing Subsidiary of St. Paul. Information may
be requested under this Article XI for, without limitation, audit, accounting,
claims, litigation (other than any claims or litigation between the parties
hereto or their Subsidiaries) and tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.

SECTION 11.02 Retention of Records. Each of St. Paul and the
Company and their respective Post-Closing Subsidiaries shall retain, and shall
cause their respective Post-Closing Subsidiaries to retain following the Closing
Date, for a period consistent with the longer of their respective document
retention policies in effect at such time or for such longer period as may be
required by applicable law or regulations, respectively, all significant
information relating to the business of the other and the other's Subsidiaries
or the obligations of the other or the other's Subsidiaries. In addition, after
the expiration of the applicable retention periods, such information may not be
destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (a) the party proposing to destroy or otherwise dispose
of such information provides no less than 30 days' prior written notice to the
other, specifying in reasonable detail the information proposed to be destroyed
or disposed of, and (b) if a recipient of such notice shall request in writing
prior to the scheduled date for such destruction or disposal that any of the
information proposed to be destroyed or disposed of be delivered to such
recipient, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such information as was requested at the expense of
the party requesting such information.

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SECTION 11.03 St. Paul Confidential Information.

(a) Neither the Company, nor any of its Post-Closing
Subsidiaries nor any of their respective directors, officers and agents may
disclose any information of a confidential nature received from St. Paul (the
"St. Paul Confidential Information").

(b) St. Paul Confidential Information shall not include
information, which is or becomes generally known on a non-confidential basis
provided, that the source of such information was not bound by a confidentiality
agreement or other obligation of confidentiality.

(c) If the Company, any of its Post-Closing Subsidiaries
or any of their respective directors, officers or agents is legally requested or
required under an order or subpoena issued by a court, administrative agency or
arbitration panel (through oral examination, interrogatories, requests for
information or documents, civil investigation demand or other legal,
administrative or arbitration processes) to disclose any St Paul Confidential
Information, the Company shall provide St. Paul with prompt written notice of
the request, requirement, subpoena or order to permit St. Paul (if it so elects)
to seek an appropriate protective order preventing or limiting disclosure. If St
Paul seeks such an order or takes other steps to avoid or limit disclosure, the
Company shall cooperate with St. Paul at St. Paul's expense. If, in the absence
of such protective order, the Company is compelled to disclose St. Paul
Confidential Information, the Company may disclose such St. Paul Confidential
Information without liability hereunder.

(d) The Company agrees that money damages would not be a
sufficient remedy for any breach of this Section 11.03 by the Company or any of
its Post-Closing Subsidiaries or any of their respective directors, officers or
agents, and that, in addition to all other remedies, St. Paul shall be entitled
to specific performance and injunctive or other equitable relief as a remedy for
any such breach.

SECTION 11.04 Further Assurances; No Agency; Specific
Performance. If at any time after the Closing Date any further action is
reasonably necessary or advisable to carry out the purposes of this Agreement or
any Ancillary Agreement, the proper officers of each party to this Agreement
shall take all such action or cause the applicable Post-Closing Subsidiaries to
take all such action. Each of St. Paul and its Post-Closing Subsidiaries and the
Company and its Post-Closing Subsidiaries shall use its commercially reasonable
efforts to obtain all consents and approvals, to enter into all amendatory
agreements and to make all filings and applications that may be required for the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, including, without limitation, all applicable governmental
and regulatory filings. Under no circumstances does this Agreement or any of the
Ancillary Agreements create an agency relationship between St. Paul and the
Company, except to the extent specified in any such Ancillary Agreement. The
parties each agree and acknowledge that remedies at law for any breach of their
obligations under this Section 11.04 are inadequate and that in addition thereto
each party, as applicable, shall be entitled to seek equitable relief, including
injunction and specific performance, in the event of any such breach.

ARTICLE XII

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PRE-EMPTIVE RIGHTS; REPURCHASE PROGRAMS; TRANSFER RESTRICTIONS;
STANDSTILL

SECTION 12.01 Pre-Emptive Rights. (a) If the Company proposes
to issue (a "Dilutive Transaction") any Common Shares or any securities
convertible into or exchangeable for or carrying in any way the right to acquire
Common Shares (the "New Securities"), St. Paul will have the right to subscribe
for up to such number of New Securities as is necessary to maintain St. Paul's
beneficial ownership interest in the Company at the same percentage owned
immediately prior to the Dilutive Transaction (assuming conversion or exchange
of the New Securities; provided, however, that St. Paul shall not have a right
to subscribe for any New Securities if the ownership of such New Securities
would cause St. Paul to be a "United States 25% Shareholder" (as defined in the
bye-laws of the Company). The precise number of New Securities to be issued to
St. Paul will be rounded up to the nearest round lot number. For the avoidance
of doubt, the issuance of Common Shares upon the settlement of the Purchase
Contracts forming part of the Units is deemed to be a Dilutive Transaction.

(b) If the Company proposes to issue New Securities, it
shall give St. Paul 30 days written notice of its intention, describing the type
and number of New Securities and the price and terms upon which the Company
proposes to issue the same. St. Paul shall have ten days from the date of
receipt of any such notice to agree to purchase up to St. Paul's pro rata share
of New Securities specified above for the same price paid to the Company in
connection with such Dilutive Transaction (i.e., less underwriting discounts and
commissions) by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased; provided, however, that in
connection with an Early Settlement (as such term is defined in the Purchase
Contract Agreement) of the Purchase Contracts pursuant to Section 5.10 of the
Purchase Contract Agreement, this Section 12.01(b) shall not apply, but the
Company shall give St. Paul prompt written notice of such Early Settlement.

(c) In the event that St. Paul fails to exercise its
preemptive right within the ten-day notice period, the Company shall have 120
days thereafter to sell the New Securities with respect to which St. Paul's
preemptive right was not exercised, upon the same terms specified in the
Company's notice to St. Paul (except that underwriting discounts and commissions
may be paid), provided that the Company shall not be obligated to issue such New
Securities. To the extent the Company does not sell all the New Securities
offered within such 120-day period, the Company shall not thereafter issue or
sell such New Securities without first again offering such securities to St.
Paul in the manner provided above.

(d) Notwithstanding anything in this Section 12.01 to the
contrary, the parties hereby agree that

(i) any New Securities issued pursuant to (A)
any director or employee benefit plans of the Company or (B) any
acquisition transaction engaged in by the Company are not to be deemed
Dilutive Transactions and that, consequently, no pre-emptive rights
will attach with respect to New Securities issued pursuant to clauses
(A) and (B);

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(ii) St. Paul's pre-emptive rights to subscribe
for New Securities will terminate without any further action by either
party hereto at such time as St. Paul beneficially owns less than 10%
of the outstanding Common Shares;

(iii) St. Paul shall have no pre-emptive rights
with respect to any proposed Dilutive Transaction (A) to the extent a
proposed Dilutive Transaction is an underwritten public offering, the
underwriters request a reduction of the number of New Securities to be
issued, or (B) prior to a Dilutive Transaction a nationally recognized
investment bank mutually agreed by the parties advises St. Paul and the
Company in writing that St. Paul exercising pre-emptive rights in
connection with such Dilutive Transaction would materially hinder or
interfere with such proposed Dilutive Transaction;

(iv) with respect to any New Securities that are
securities convertible into or exchangeable for or carrying in any way
the right to acquire Common Shares ("Convertible New Securities"), the
terms of such Convertible New Securities issuable to St. Paul upon
exercise of the pre-emptive rights shall contain provisions which
preclude conversion into or exchange for the underlying Common Shares
until such time as St. Paul's ownership of Common Shares measured
immediately after such conversion or exchange is no more than 24.9% of
the total number of outstanding Common Shares. Ownership for this
purpose will be determined under Section 958 of the Internal Revenue
Code of 1986, as amended (the "Code"). These special limitations on
conversions or exchanges shall lapse upon a transfer of the Convertible
New Securities by St. Paul to a person with which St. Paul has no
constructive ownership relationship under Section 958 of the Code; and

(v) St. Paul shall have no pre-emptive rights in
the event of an issuance of Common Shares upon the conversion or
exchange of New Securities with respect to the issuance of which St.
Paul had pre-emptive rights.

(e) (i) For so long as St. Paul has the right to
exercise any pre-emptive rights pursuant to this Section 12.01, each party
hereto shall use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
and officials that may be or become necessary in connection with St. Paul's
exercise of such rights, and will cooperate reasonably with the other party in
promptly seeking to obtain all such authorizations, consents, orders and
approvals. The parties hereto agree to cooperate reasonably, complete and file
any joint applications for any authorizations from any Governmental Authorities
reasonably necessary or desirable to effectuate the transactions contemplated by
this Section 12.01. The parties hereto agree that they will keep each other
apprised of the status of matters relating to the exercise of the pre-emptive
rights contemplated under this Section 12.01, including reasonably promptly
furnishing the other with copies of notices or other communications received by
the Company or St. Paul, from all third parties and Governmental Authorities
with respect to the pre-emptive rights contemplated by this Section 12.01.

(ii) For so long as St. Paul has the right to
exercise any pre-emptive rights pursuant to this Section 12.01, the
Company and St. Paul agree to reasonably

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promptly prepare and file, if necessary, any filing under the HSR Act
with the FTC and the Antitrust Division of the DOJ in order to enable
St. Paul to exercise such pre-emptive rights under this Section 12.01.
Each party hereby covenants to cooperate reasonably with the other such
party to the extent reasonably necessary to assist in making any
reasonable supplemental presentations to the FTC or the DOJ, and, if
requested by the FTC or the DOJ, to reasonably promptly amend or
furnish additional information thereunder.

(iii) Any reasonable out-of-pocket costs and
expenses arising in connection with actions taken pursuant to this
Section 12.01(e) shall be borne by St. Paul.

SECTION 12.02 Share Buy-Back Programs. (a) In the event that
the Company determines to effect repurchases of its Common Shares (and, if
applicable, New Securities) in a repurchase program approved by its board of
directors, then St. Paul must sell to the Company, on each day which any Common
Shares are so repurchased at a price equal to the average price of repurchases
by the Company on such day, such number of Common Shares necessary to limit St.
Paul's beneficial ownership interest in the Company to no more than 24.9% of the
outstanding Common Shares (on an Unadjusted Basis (as defined in the Company's
Bye-Laws)) after all such repurchases; provided, that St. Paul may require that
any repurchases from it by the Company must be at the average purchase price of
any repurchases effected by the Company on such day pursuant to Rule 10b-18
under the Exchange Act. The precise number of Common Shares to be repurchased by
the Company from St. Paul will be rounded up to the nearest round lot number.

(b) Notwithstanding anything in this Section 12.02 to the
contrary, if (i) St. Paul beneficially owns less than 24.9% of the outstanding
Common Shares on an Unadjusted Basis other than as a result of any voluntary
sale of Common Shares by St. Paul, and (ii) St. Paul thereafter purchases Common
Shares to maintain such beneficial ownership level at 24.9% either (A) in
accordance with its pre-emptive rights under Section 12.01 or (B) in the open
market, in each case within 60 days after suffering such dilution, then any
repurchases by the Company of its Common Shares in the period that is six months
plus one day from the trade date of any such purchase by St. Paul in accordance
with clause (A) or (B) may only be effected in a manner that either does not
trigger St. Paul's obligation pursuant to Section 12.02(a) to sell back Common
Shares to the Company, or would not result in any requirement by St. Paul to
disgorge profits pursuant to Section 16(b) of the Exchange Act.

SECTION 12.03 Transfer Restrictions; Standstill Provisions.
(a) St. Paul may not directly or indirectly, sell, transfer or otherwise dispose
of more than 9.9% of the Common Shares outstanding at the time of such sale,
transfer or other disposition to any Person that generates 50% or more of its
gross revenue in its most recent fiscal year for which financial statements are
available, by writing property or casualty insurance or reinsurance, except in
the following circumstances: (i) in connection with any tender offer or exchange
offer made to all holders of outstanding Common Shares; (ii) to any Wholly Owned
Post-Closing Subsidiary of St. Paul provided that such subsidiary agrees in
writing with the Company to the same transfer restrictions as are contained in
this Section 12.03; or (iii) in a transfer by operation of law upon consummation
of a merger or consolidation of St. Paul into another Person.

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(b) St. Paul agrees that except as contemplated in this
Agreement, St. Paul and its Subsidiaries will not, and St. Paul will use its
commercially reasonable efforts to cause its Affiliates and any officer,
employee, agent or representative of St. Paul or such Affiliates (collectively,
the "Representatives") to not, directly or indirectly, (i) advise or encourage
any party or entity with respect to the voting of any Voting Securities in an
attempt to cause a Change in Control of the Company, (ii) initiate or otherwise
solicit shareholders of the Company for the granting of any proxy or the
approval of one or more shareholder proposals, or induce any other party or
entity to seek any proxy or to initiate any shareholder proposal, that in any
case results or is designed to result in a Change in Control of the Company, or
(iii) directly or indirectly acquire, announce an intention to acquire, or agree
to acquire, by purchase or otherwise, beneficial ownership of any Voting
Securities, if, immediately after any such acquisition, St. Paul or any
Subsidiary of St. Paul would beneficially or of record own, in the aggregate,
more than 24.9% of the Voting Securities then outstanding, provided, that
nothing herein shall limit the ability of St. Paul or any of its Affiliates to
discuss any matter, including a Change in Control of the Company, with
RenaissanceRe or any of its Affiliates. A "Change in Control" of the Company is
deemed to have occurred if (i) any person or group (as defined for purposes of
Section 13 of the Securities Exchange Act of 1934, as amended) (excluding the
Company or any Subsidiary thereof) becomes the beneficial owner of more than 50%
of the outstanding equity securities of the Company representing the right to
vote for the election of directors or (ii) there shall occur a merger,
consolidation or other business combination in which the Company is acquired
(unless the shareholders of the Company immediately before such business
combination own, directly or indirectly, immediately following such business
combination, at least a majority of the combined voting power of the entity
resulting from such business combination).

(c) St. Paul shall use its commercially reasonable
efforts to cause all Voting Securities beneficially owned directly or indirectly
by it or any Subsidiary to be present for quorum purposes, in person or
represented by proxy at every meeting of holders of Common Shares (or, if
applicable, in any matter to be acted upon by written consent of shareholders
without a meeting).

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01 Survival. All representations, covenants and
agreements contained or provided for herein shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
party benefiting from any such covenant or agreement, and shall survive the
execution of this Agreement.

SECTION 13.02 Governing Law; Dispute Resolution.

(a) Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the state of New York, without
regard to its conflict of laws principles.

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(b) Dispute Resolution.

(i) Mandatory Arbitration. The parties hereto
shall promptly submit any dispute, claim, or controversy arising out of
or relating to this Agreement, the Ancillary Agreements (unless they
specifically provide otherwise) and/or the Transactions contemplated
hereunder, including, effect, validity, breach, interpretation,
performance, or enforcement (collectively, a "Dispute") to binding
arbitration in New York, New York at the offices of Judicial
Arbitration and Mediation Services, Inc. ("JAMS") before an arbitrator
(the "Arbitrator") in accordance with JAMS' Arbitration Rules and
Procedures and the Federal Arbitration Act, 9 U.S.C. Sections 1 et seq.
The Arbitrator shall be a former federal judge selected from JAMS' pool
of neutrals. The parties agree that, except as otherwise provided
herein respecting temporary or preliminary injunctive relief, binding
arbitration shall be the sole means of resolving any Dispute.

(ii) Costs. The costs of the arbitration
proceeding and any proceeding in court to confirm or to vacate any
arbitration award or to obtain temporary or preliminary injunctive
relief as provided in paragraph (iii) below, as applicable (including,
without limitation, actual attorneys' fees and costs), shall be borne
by the unsuccessful party and shall be awarded as part of the
Arbitrator's decision, unless the Arbitrators shall otherwise allocate
such costs in such decision.

(iii) Injunctive Relief. Nothing herein prevents
the parties hereto from seeking or obtaining temporary or preliminary
injunctive relief in a court for any breach or threatened breach of any
provision hereof pending the hearing before and determination of the
Arbitrator. The parties hereby agree that they shall continue to
perform, or cause their Post-Closing Subsidiaries to perform, any and
all obligations under this Agreement, and the Ancillary Agreements,
including, without limitation, the Master Services Agreement, pending
the hearing before and determination of the Arbitrator, it being agreed
and understood that the failure to so perform will cause irreparable
harm to each party and its Affiliates and that the putative breaching
party has assumed all of the commercial risks associated with such
breach or threatened breach of any provision hereof by such party.

(iv) Courts. The parties agree that the State and
Federal courts in The City of New York shall have jurisdiction for
purposes of enforcement of their agreement to submit Disputes to
arbitration and of any award of the Arbitrator.

SECTION 13.03 Notices. All notices, requests, claims, demands
and other communications hereunder and under the Ancillary Agreements shall be
in writing and shall be deemed to have been duly given if delivered by hand
(with receipt confirmed), or by certified mail, postage prepaid and return
receipt requested, or facsimile transmission addressed as follows (or to such
other address as a party may designate by written notice to the others) and
shall be deemed given on the date on which such notice is received:

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If to St. Paul:

The St. Paul Companies, Inc.
385 Washington Street
St. Paul, MN 55102
Attention: General Counsel
Facsimile: (410) 205-6967

with a copy to:

Donald R. Crawshaw
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Facsimile: (212) 558-3588

If to the Company:

Platinum Underwriters Holdings, Ltd.
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Attention: Secretary
Facsimile: (441) 292-4720

with a copy to:

Linda E. Ransom
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 259-6333

SECTION 13.04 Amendment and Modification. The parties may by
written agreement, subject to any regulatory approval as may be required, (a)
extend the time for the performance of any of the obligations or other acts of
the parties hereto; (b) waive any inaccuracies in the documents delivered
pursuant to this Agreement, and (c) waive compliance with or modify, amend or
supplement any of the agreements contained in this Agreement or waive or modify
performance of any of the obligations of any of the parties hereto. This
Agreement may not be amended or modified except by an instrument in writing duly
signed on behalf of the parties hereto.

SECTION 13.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

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SECTION 13.06 No Third Party Beneficiaries. Except for Section
13.15 and the provisions of Articles VIII and X relating to Indemnities, this
Agreement is solely for the benefit of the parties hereto and shall not be
deemed to confer upon third parties any remedy, claim, reimbursement, claim of
action or other right in excess of those existing without reference to this
Agreement.

SECTION 13.07 Headings. The Article and Section headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

SECTION 13.08 Severability. To the extent any provision of
this Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remaining provisions of this Agreement shall be unaffected and
shall continue in full force and effect.

SECTION 13.09 Waiver. No failure by any party to take any
action or assert any right hereunder shall be deemed to be a waiver of such
right in the event of the continuation or repetition of the circumstances giving
rise to such right, unless expressly waived in writing.

SECTION 13.10 Expenses. Except as otherwise specified in this
Agreement or the Ancillary Agreements, all costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement, the Ancillary
Agreements and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing Date shall have
occurred.

SECTION 13.11 Public Announcement. No party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
party and the parties shall cooperate as to the timing and contents of any such
press release or public announcement.

SECTION 13.12 Entire Agreement. This Agreement, the Ancillary
Agreements and any other written document executed by and between St. Paul and
the Company that specifically states that such document is an Ancillary
Agreement, constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between St. Paul and the Company with
respect to the subject matter hereof and thereof.

SECTION 13.13 Assignment of this Agreement. Neither party may
assign this Agreement by operation of law or otherwise without the express
written consent of the other party; provided, however, this Agreement may be
assigned by operation of law or otherwise without the express written consent of
the St. Paul and the Company to their respective Post-Closing Subsidiaries so
long as such assignment does not relieve the assigning party of liability
hereunder.

SECTION 13.14 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.

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EX-2.1 59th Page of 301 TOC 1st Previous Next ↓Bottom Just 59th
SECTION 13.15 Limit on Recovery from Company Directors and
Officers. In any legal action commenced by St. Paul against the Company, any of
its Post-Closing Subsidiaries or the officers and/or directors of the Company or
such Post-Closing Subsidiaries, St. Paul will not recover from any officer or
director of any of the Company or its Post-Closing Subsidiaries any amount that
is in excess of the amount the Company and/or such Post-Closing Subsidiaries is
able to indemnify such officer or director, other than in the circumstance where
such indemnification of such officer or director by the Company and/or such
Post-Closing Subsidiaries is restricted due to such officer or director having
engaged in fraud, intentional misconduct or criminal acts. St. Paul and the
Company agree that the officers and directors of the Company and its
Post-Closing Subsidiaries are third party beneficiaries of the agreement set
forth in this Section 13.15.

SECTION 13.16 Transition Expenses. St. Paul agrees to
reimburse the Company for up to $4,500,000 of expenses of the type referenced in
correspondence from St. Paul to the Company as of the date hereof, incurred by
the Company or any of its Post-Closing Subsidiaries in connection with its first
year of operations following the Closing. Such reimbursements are payable within
10 Business Days following receipt by St. Paul from the Company of documentation
reasonably satisfactory to St. Paul evidencing the Company's payment of any such
expenses.

-52-

EX-2.1 60th Page of 301 TOC 1st Previous Next ↓Bottom Just 60th
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.

THE ST. PAUL COMPANIES, INC.

By: /s/ Bruce H. Saul
---------------------------------------------
Name: Bruce H. Saul
Title: Vice President

PLATINUM UNDERWRITERS HOLDINGS, LTD.

By: /s/ Jerome T. Fadden
---------------------------------------------
Name: Jerome T. Fadden
Title: President and Chief Executive Officer

EX-2.1 61st Page of 301 TOC 1st Previous Next ↓Bottom Just 61st
[EXHIBITS 3.01(a) - 3.01(k)]

Please see corresponding documents in closing set.

EX-2.1 62nd Page of 301 TOC 1st Previous Next ↓Bottom Just 62nd
Exhibit 3.04(b)

BILL OF SALE AND ASSIGNMENT

[ ], 2002

KNOW ALL MEN BY THESE PRESENTS that pursuant to that certain
Formation and Separation Agreement, dated as of October 28, 2002 (the "Formation
and Separation Agreement"), among [ST. PAUL ENTITY], a [ ] corporation
("Seller"), and Platinum Underwriters Holdings, Ltd., a Bermuda company
("Buyer"), Seller, for good and valuable consideration as recited in the
Formation and Separation Agreement, the receipt and sufficiency of which are
hereby acknowledged, does hereby grant, sell, convey, transfer, assign and
deliver to Buyer, its successors and assigns, free and clear of any Encumbrances
(except for those Encumbrances that may arise solely due to the status of Buyer
or any of its Affiliates), any and all rights, title and interest of Seller in
and to the Transferred Assets (including, without limitation, the Platinum US
Shares and the Employment Agreements), to have and to hold unto Buyer, its
successors and assigns, forever, in full satisfaction of Seller's obligations
under Section 3.04(b) of the Formation and Separation Agreement. Capitalized
terms used but not defined herein shall have the respective meanings ascribed to
such terms in the Formation and Separation Agreement.

This Bill of Sale and Assignment is intended to implement the
provisions of Section 3.04(b) of the Formation and Separation Agreement and
shall not be construed to enhance, extend or limit the rights or obligations of
Seller or Buyer thereunder. To the extent any provision of this instrument is
inconsistent with the Formation and Separation Agreement, the provisions of the
Formation and Separation Agreement shall control.

THIS BILL OF SALE AND ASSIGNMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ITS CONFLICT OF LAWS PRINCIPLES.

This Bill of Sale and Assignment may be executed and delivered
(including by facsimile delivery) in one or more counterparts, each of which
shall be deemed to be an original by the parties executing such counterpart, but
all of which shall be considered one and the same instrument.

(SIGNATURE PAGE FOLLOWS)

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IN WITNESS WHEREOF, Seller has caused this instrument to be executed by
its duly authorized officer as of the date first written above.

[ST. PAUL ENTITY]

By:___________________________
Name:
Title:

Accepted and Agreed

PLATINUM UNDERWRITERS HOLDINGS, LTD.

By:____________________________
Name:
Title

-2-

EX-2.1 64th Page of 301 TOC 1st Previous Next ↓Bottom Just 64th
Schedule 1.01

List of Classes Included in the Transferred Lines

THE BUSINESS THAT WILL BE TRANSFERRED INTO PLATINUM RE IS DEFINED BY ALL
BUSINESS INCEPTING IN THE 2002 UNDERWRITING YEAR AND BELONGING TO THE INCLUDED
CLASSES LISTED BELOW.

[Download Table]

New York Classes
----------------

1101 Property Treaty P-R, NY
1102 Property Treaty XS - Risk, NY
1103 Property Treaty Excess - Cat, NY
1104 Retrocessions, NY
1105 Crop-Hail, NY
1106 Casualty Treaty Pro-Rata, NY
1107 Cas. First Dollar WC, NY
1108 Casualty Treaty Excess, NY
1109 Cas. First Dollar Auto, NY (non-program)
1110 LPIC, NY
1111 Cas. First Dollar GL/Other, NY (non-program)
1112 NA Accident & Health, NY
1128 Casualty Treaty Excess - Clash, NY
1201 Intl Property Pro Rata, NY
1202 Intl Property Treaty Excess - Risk, NY
1203 Intl Property Treaty Excess - Cat, NY

[Download Table]

New York Classes
----------------

1204 Intl Casualty Treaty, NY
1205 Intl Motor Pro-Rata, NY
1206 Intl Accident & Health, NY
1298 Intl Prop Outward Retro
1301 Marine Treaty Pro Rata, NY
1302 Marine Treaty Excess, NY
1303 Marine Facultative, NY
1307 Satellite XS, NY
1500 non-traditional
1800 CCA AIG QS
2201 Intl Property Treaty Excess - Risk Miami
2202 Intl Property Pro Rata, Miami
2203 Intl Casualty Treaty, Miami
2204 Marine Treaty Pro Rata, Miami
2205 Intl Motor Pro-Rata, Miami

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[Download Table]

London Classes
--------------

L06 N. Am Med Mal
L08 N Am Casualty Treaty
L11 N. Am Cat
L17 N Am Property P-R
L18 N Am Property Per Risk
L74 Med Mal PR
L91 N. Am Crop
L21 Int'l Marine P-R
L23 Int'l Property P-R
L24 Int'l Property Per Risk
L25 Int'l Cat
L26 Int'l Motor XS
L27 Int'l Casualty Excess
L32 Int'l Marine XL
L33 U.K. Property Proportional Treaty
L34 Int'l Casualty P-R
L79 Satelite XS
L80 Int'l Motor Liability PR

[Download Table]

London Classes
--------------

L40 N Am Motor Pro Rata
L41 N Am Motor XL
L43 N Am GL Pro Rata
L44 N Am GL XL
L48 N Am PI XL
L63 N Am PI Pro Rata
B21 Brussels Marine PR
B23 Brussels Int'l Property P-R
B24 Brussels Int'l Property Per Risk
B25 Brussels Int'l Cat
B26 Brusses Int'l Motor
B27 Brussels Int'l Liab XS
B32 Brussels Int'l Marine XS
B34 Brussels Int'l Liab PR
B55 Brussels Int'l Personal Acc P-R
B60 Brussels Int Motor Physical Damage PR
B61 Brussels Engineering PR
B62 Brussels Engineering XL
B80 Brussels Motor Pro Rata

[Download Table]

London Classes
--------------

M21 Munich - Marine PR
M23 Munich - Int'l Property P-R
M24 Munich - Int'l Property Per Risk
M25 Munich - Int'l Cat
M26 Munich - Int'l Motor
M27 Munich - Int'l Liab XS
M32 Munich - Int'l Marine XS
M34 Munich Int'l Liability Pro Rata
M55 Munich Int'l Proportional Personal Accident
M60 Munich International Motor Pro Rata Treaty (MAPD)
M61 Munich International Engineering Pro Rata Treaty
M62 Munich International Engineering Excess Treaty
LL1 L1 GTR Scaleback Europe Class 1
LL2 L2 GTR Scaleback Europe Class 2
LL3 L3 GTR Scaleback Europe Class 3
LL5 L5 GTR Scaleback Europe Class 5
LF1 F1 GTR Scaleback Europe Class 1
LF2 F2 GTR Scaleback Europe Class 2
LF3 F3 GTR Scaleback Europe Class 3
LF5 F5 GTR Scaleback Europe Class 5
LL4 L4 GTR Scaleback Europe Class 4
LF4 F4 GTR Scaleback Europe Class 4

-2-

EX-2.1 66th Page of 301 TOC 1st Previous Next ↓Bottom Just 66th
Schedule 2.01(b)

Transferred Personal Property

All furniture, fixtures, computers, equipment, machinery and
other tangible personal property present as of the Closing Date on the premises
subject to the subleases and assignments of leases listed in Section 3.01(i),
such personal property present on the premises leased by St. Paul at 2-1,
Kudan-kita 4-chome, Chiyoda-ku, Tokyo and leased by St. Paul at 52 Lime Street,
London, and all contracts and agreements relating to any of the foregoing.

EX-2.1 67th Page of 301 TOC 1st Previous Next ↓Bottom Just 67th
Schedule 2.01(c)

Intellectual Property

[Download Table]

---------------------------------------------------------------------------------
LICENSES TO BE
TRANSFERRED TO
PRODUCT NAME PLATINUM
---------------------------------------------------------------------------------

GRS SOFTWARE
Actuate 1
Actuate E-analysis 2 CPU Server
Actuate Designer 3 Workstation
Sybase's Powerbuilder 10
Sybase's Adaptive Server 4
Sybase's Replication Server 2
Sybase's EAS Enterprise 2
Sybase's EAS Developer 5
Merant's PVCS HP UX 5
Merant's PVCS WINTEL 5
Embarcadero's Rapid SQL for Sybase 6
Embarcadero's Rapid SQL Debugger for Sybase 6
Embarcadero's DB Artisan Oracle 3
Embarcadero's DB Artisan Sybase 3
SAS- Window Base 2
K-Station/Websphere Portal 2
Sametime 1
Quickplace 1
Domino.doc 1
Domino Workflow 1
Learning Space 1
Oracle Financials 1
Oracle Database 9i 1
Oracle HR 1
Oracle FSA Server 1
Panorama's Novaview Server
Panorama's Novaview Client
@Risk 2
Axco 1
Exceed 5 30
French Assistant 1
GHOST 6.3 180
Lotus 1.2.3 v9 63
Lotus Communications CEO Bundle 180
MS Project 98 4
MS FrontPage 98 2
MS Project 2000 6
MS Visual C++ v4.0
MS WinInstall 3
NAV Corporate Edition 7.x 180

EX-2.1 68th Page of 301 TOC 1st Previous Next ↓Bottom Just 68th
[Download Table]

OrgPlus 3
Rational Test Studio License (SQA) 5
Snagit 10
Spanish Assistant 3
Spanish Proffing Tools 13
XTND Connect PC / for Palms and other mobil devices 7
Visio 2000 3
WinBatch 1

ARCSERVE LICENSES:

Advaced Edition 7
Workgroup Edition 1
Disaster Recovery Option 3
Open File Agent 16
Client Agent 11
Lotus Notes Agent 6
SAN Option 4
Advanced Edition 10
Back up Agent for SQL 7
Open File Agent 47
Client Agent 30
Tape Library Option 5
Disaster Recovery Option 3
(ARCserve licenses require product specification)

CITRIX (SPRENET.COM):
Citrix Load Balancing Services 1
Citrix Load Balancing Services 1
Citrix User License Pack 50
Citrix User License Pack 50
MetaFrame 1.8 - Feature Release 1 Upgrade 1
MetaFrame 1.8 - Feature Release 1 Upgrade 1
MetaFrame 1.8 for Win2000 with Subscription 15
MetaFrame 1.8 for Win2000 with Subscription 15

CITRIX (ALL OTHER):
Citrix User License Pack 100
Citrix Load Balancing Services 2
MetaFrame 1.8 - Feature Release 1 Upgrade 2
MetaFrame 1.8 for Win2000 Migration 2

EX-2.1 69th Page of 301 TOC 1st Previous Next ↓Bottom Just 69th
[Download Table]

(Citrix licenses require product specification and specific
license amounts
Citrix Load Balancing Services
Citrix Load Balancing Services
Citrix Load Balancing Services
Citrix Load Balancing Services
Citrix Secure ICA Services - North American Edition
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 for Win2000 Migration
MetaFrame 1.8 for Win2000 Migration
MetaFrame 1.8 for Win2000 Migration with Subscription
MetaFrame 1.8 for Win2000 Migration with Subscription
MetaFrame 1.8 for Win2000 Migration with Subscription
MetaFrame 1.8 for Windows Migration with Subscription
MetaFrame 1.8 for Windows Migration with Subscription
MetaFrame 1.8 for Windows with Subscription

SOFTWARE LICENSES IN USE BY OPERATIONS:
(HP LICENSES REQUIRE FURTHER ANALYSIS)
HP UX 11.0 OS LTU 6
HP Mirror Disk 6
HP Glance Plus 6
HP C++ Compiler 2
HP C++ Developers Kit 2
HP OV OmniBack (Backup Manager LTU) 1
HP OV OmniBack (Backup Agent LTU) 8
HP OV NNM Enterprise 1
BMC SQL Backtrack for Sybase 3
BMC O-Backtrack for Oracle 2
Cisco Works 2000 1
Cisco Router IOS 11
Cisco PIX Unrestricted Bundle 8
Cisco PIX Failover Bundle 8
Cisco 3-DES 2
IBM 5722-SS1 Operating System/400 1
IBM 5722-CM1 Communications Utilities 1
IBM 5722-ST1 DB2 & SQL Development Kit 1
IBM 5722-WDS Websphere Development Studio 1
IBM 5722-DS1Business Graphics Utilities 1
IBM 5722-QU1 Query Tools 1
IBM 5722-DB1 S/38 Utilities 1
IBM 5722-XW1 Client Access 30

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[Download Table]

IBM 5722-PT1 Performance Tools 1
IBM 5733-SW1 Software Subscription (1 Year) 1
IBM PSF-400 Print Services Facility 1
MS ISA Server Enterprise Edition 1
Surf Control SuperScout 1
Winsyslog 1
RSA Ace Server 2
Verisign Certificates 2
Solaris 8 3
RedHat Linux 1
Avaya Audox VM Software(NY) 1
Avaya phone switch software(NY) 1
Avaya Audox VM Software(Morristown) 1
Avaya phone switch software(Morristown) 1
Lucent Merlin Messaging VM Software(Chicago) 1
Lucent Merlin Magix Switch Software(Chicago) 1
Precovery(Disaster Recovery software) 1
London Phone VM Software 1
London Phone Switch Software 1
NAI Sniffer 1

MICROSOFT PRODUCTS:

Office Pro Win32 English SA MVL 180
Windows Advanced Svr English SA MVL 28
Windows CAL English SA MVL 180
Windows CAL 2000 English MSELECT 180
SQL Server 2000 1 Server & 4 CALS
MS Services for Unix 3.0 2

GWI HELP DESK PACKAGE:

c.Support Starter - 1 Server & 5 Tech-user licenses 1
c.Support IT Remote Server 1
c.Support Additional Tech-User 13
CCL-Licenses -0-500 Customer 1
c.Support Starter-Pak 2yr Maintenance 1
c.Support IT Remote Server 2yr. Maintence 1
c.Support Additional Tech User 2yr Maint 13
c.Support source code 1
Quick Start 2-day any single application 1
On site training 2

EX-2.1 71st Page of 301 TOC 1st Previous Next ↓Bottom Just 71st
Schedule 2.01(g)

Exceptions to Renewal Rights

None.

EX-2.1 72nd Page of 301 TOC 1st Previous Next ↓Bottom Just 72nd
Schedule 2.01(i)

Information in Respect of Transferred Assets

Originals or copies of all books, records, ledgers, files,
reports, accounts, data, plans and operating records, whether in hard copy,
electronic format, magnetic or other media, which are related to the Transferred
Assets set forth in Section 2.01(a) through (f), including, without limitation,
the pro forma tax and financial records of Platinum US, provided, however, that
the information about the Transferred Assets shall not include minute books
(other than those of Platinum US) and other similar records and files including
tax returns.

EX-2.1 73rd Page of 301 TOC 1st Previous Next ↓Bottom Just 73rd
Schedule 2.01(j)

Information to be Provided in
Respect of Reinsurance Agreements

Copies of all Reinsurance Agreements, placement slips and
binders, inuring retrocessional contracts, actuarial analyses, underwriting
files, claims files, correspondence with brokers, cedants and inuring
retrocessional reinsurers, and relevant detail (whether in hard copy, electronic
format, magnetic or other media).

EX-2.1 74th Page of 301 TOC 1st Previous Next ↓Bottom Just 74th
Schedule 2.02

Information in Respect of Renewal Rights

Copies of the underwriting files and relevant detail (whether
in hard copy, electronic format, magnetic or other media) for contracts that
were underwritten by St. Paul Re in the 1997, 1998, 1999, 2000, and 2001
underwriting years and the customer and brokers lists relevant to the Renewal
Rights, in each case relating to the Transferred Lines, including copies of
contracts, placement slips and binders, inuring retrocessional contracts,
actuarial analyses, information pertaining to aggregate premium and loss
activity, correspondence with brokers, cedants and inuring retrocessional
reinsurers but excluding any information that St. Paul reasonably believes to be
attorney-client privileged and any individual claims or loss information.

EX-2.1 75th Page of 301 TOC 1st Previous Next ↓Bottom Just 75th
Schedule 3.02(a)

Expenses Payable by the Company

1. Fees, disbursements and expenses of David Greenfield of KPMG LLP and
his team.

2. Fees, disbursements and expenses of Dewey Ballantine LLP.

3. Fees, disbursements and expenses of Conyers Dill & Pearman, Slaughter
and May and A&L Goodbody for work done in connection with the formation
and licensing of the Company, Platinum Bermuda, Platinum UK and
Platinum Regency, and all registration, filing, licensing and
organization fees and Taxes in connection therewith, except (i) any
income, gains, franchise, and similar taxes imposed on St. Paul or any
of its Affiliates with respect to the transfer of the Transferred
Business and (ii) any conveyance Taxes covered by Section 8.02.

4. Registration, filing and listing fees, including SEC, NASD and NYSE.

5. Printing and engraving expenses.

6. Underwriters' commission and fees as required by the Underwriting
Agreement.

7. Any costs in connection with qualification under state securities laws.

8. Transfers agent and registrar fees.

9. Fees and expenses associated with establishing a line of credit and
obtaining ratings.

10. Costs associated with the change of Platinum US's name.

11. 50% of the initial bonus and relocation expenses advanced by St. Paul
to the Company in respect of Michael Price.

12. Any other fees and expenses relating to the organization and initial
public offering of the Company and the operation of its business that
St. Paul or another party has not specifically agreed to pay.

13. Fees, disbursements and expenses of Sam Liss, not to exceed $750,000.

EX-2.1 76th Page of 301 TOC 1st Previous Next ↓Bottom Just 76th
Schedule 3.02(b)

Expenses Payable by St. Paul

1. Fees, disbursements and expenses of KPMG LLP other than those
specifically allocated to the Company.

2. Fees, disbursements and expenses of Sullivan & Cromwell.

3. Fees, disbursements and expenses of Conyers Dill & Pearman, Slaughter
and May and A&L Goodbody for work on the intercompany agreements and
for (i) any income, gains, franchise, and similar taxes imposed on St.
Paul or any of its Affiliates with respect to the transfer of the
Transferred Business and (ii) any conveyance Taxes covered by Section
8.02.

4. Any fees, disbursements and expenses of Sam Liss in excess of $750,000.

EX-2.1 77th Page of 301 TOC 1st Previous Next ↓Bottom Just 77th
Schedule 4.02

Agreements between Platinum US and St. Paul or St. Paul Subsidiaries to be
Terminated

1. Bulk Reinsurance Contract, dated as of November 30, 1995, between
Platinum Underwriters Reinsurance, Inc. and United States Fidelity and
Guaranty Insurance Company.

2. Agreement for Services and Other Resources, dates as of April 27, 1998,
between St. Paul Fire and Marine Insurance Company and Platinum
Underwriters Reinsurance, Inc.

3. Agreement for Investment Management Services, dates as of April 27,
1998, between The St. Paul Companies, Inc. and Platinum Underwriters
Reinsurance, Inc.

4. Tax Sharing Agreement, dated as of April 25, 1998, between The St. Paul
Companies, Inc., USF&G Corporation and each of the subsidiary members
of the USF&G Corporation Affiliated Group that has executed the
Agreement.

EX-2.1 78th Page of 301 TOC 1st Previous Next ↓Bottom Just 78th
Schedule 5.04(a)(i)

Exceptions to Good and Marketable Title of Transferred Assets

St. Paul makes no representations as to the marketable title
to the Employment Agreements and information (including, but not limited to,
personnel files and employee records and reports) relating to the Newly Hired
Employees.

Certain rights to the intellectual property listed on Schedule
2.01(c) may not be transferred without the consent of a third party. While St.
Paul and its relevant Subsidiaries will use commercially reasonable efforts to
obtain such consents, they shall not have any liability to the Company or any
Subsidiary of the Company to the extent any such consent is not obtained by the
Closing Date and, for greater certainty, none of St. Paul nor any Subsidiary of
St. Paul shall be required to make any payment to a third party to procure the
transfer of rights to any intellectual property.

EX-2.1 79th Page of 301 TOC 1st Previous Next ↓Bottom Just 79th
Schedule 5.04(a)(ii)

Encumbrances on Transferred Assets

The photocopying, printing, facsimile, mailroom and beverage
service equipment included in the Transferred Assets is subject to various lease
agreements with third parties.

EX-2.1 80th Page of 301 TOC 1st Previous Next ↓Bottom Just 80th
Schedule 5.06(c)

Statutory Periods of Limitations

Platinum US's Federal tax statutory period of limitations has been extended for
tax years 12/31/1995, 12/31/1996, 12/31/1997 and 4/24/1998 until 12/31/2002 and
for tax year 12/31/1998 until 9/15/2003.

EX-2.1 81st Page of 301 TOC 1st Previous Next ↓Bottom Just 81st
Schedule 5.06(d)

Tax-related Agreements

Platinum US is part of a tax sharing agreement, dated as of April 25, 1998,
between The St. Paul Companies, Inc., USF&G Corporation and each of the
subsidiary members of the USF&G Corporation that have executed the Agreement. As
provided in Section 4.02 and the associated schedule, this agreement will be
terminated effective as of the closing date.

EX-2.1 82nd Page of 301 TOC 1st Previous Next ↓Bottom Just 82nd
Schedule 5.06(f)

Tax Delinquencies, Claims, Audits, Examinations,
Actions, Suits, Proceedings or Investigations in
Progress or Pending

Platinum US is included in the consolidated Federal tax audit of the USF&G
Corporation consolidated group through 4/24/1998. Platinum US is included in the
consolidated Federal audit of The St. Paul Companies, Inc. consolidated group
for years ending 12/31/1998 through 12/31/2000. No adjustments have been
proposed to Platinum US in either audit and none are expected.

EX-2.1 83rd Page of 301 TOC 1st Previous Next ↓Bottom Just 83rd
Schedule 5.06(h)

Platinum US Affiliated Group Membership
for Tax Filings

Platinum US filed a Federal tax return as part of the USF&G Corporation
consolidated Federal tax return from its formation until 4/24/1998. After USF&G
Corporation and The St Paul Companies, Inc. merged on 4/24/1998, Platinum US
filed its Federal tax return as part of the St Paul Companies, Inc. consolidated
tax group.

EX-2.1 84th Page of 301 TOC 1st Previous Next ↓Bottom Just 84th
Schedule 5.07

Contracts of Platinum US

Custody Agreement made as of December 13, 1995 by and between Platinum
Underwriters Reinsurance, Inc. and First National Bank of Maryland, a Maryland
banking corporation.

EX-2.1 85th Page of 301 TOC 1st Previous Next ↓Bottom Just 85th
Schedule 6.02(b)

Regulatory Approvals Required to be Obtained by the Company or its Post-Closing
Subsidiaries Prior to the Closing

Maryland Consent to Change of Control, Name Change, Additional Business Lines
(including, without limitation, accident and health insurance), and the
Ancillary Agreements to which Platinum US is a Party.

Bermuda Insurance License.

New York License.

SEC declaration of effectiveness of the Registration Statements relating to the
Public Offering and the ESU Offering.

EX-2.1 86th Page of 301 TOC 1st Previous Next ↓Bottom Just 86th
Schedule 7.01(a)(ii)

Hiring Restrictions

Any officer of the Company designated as an Assistant Vice President or more
senior.

EX-2.1 87th Page of 301 TOC 1st Previous Next ↓Bottom Just 87th
Schedule 9.02(e)

FULL AND COMPLETE RELEASE

(a) I, __________, as a material inducement to
The St. Paul Companies, Inc. ("St. Paul") to enter into the Formation and
Separation Agreement between The St. Paul Companies, Inc. and Platinum
Underwriters Holdings, Ltd., dated as of October __, 2002, (the "Formation
Agreement") and for other good and valuable consideration, the receipt of which
is hereby acknowledged, for myself and my heirs, executors, administrators and
assigns, do hereby knowingly and voluntarily release and forever discharge St.
Paul and all of its Affiliates (as defined in the Formation Agreement), parents,
subsidiaries and related entities, and all of its past, present and future
respective agents, officers, directors, shareholders, employees, attorneys and
assigns from any federal, state or local charges, claims, demands, actions,
liabilities, suits, or causes of action, at law or equity or otherwise and any
and all rights to or claims for continued employment after the Closing Date (as
defined in the Formation Agreement), attorneys fees or damages (including
contract, compensatory, punitive or liquidated damages) or equitable relief,
which I may ever have had, have now or may ever have or which my heirs,
executors or assigns can or shall have, against any or all of them, whether
known or unknown, on account of or arising out of my employment with St. Paul or
the separation thereof; provided, however, that the foregoing shall not
constitute a release of (i) any claim for indemnification or insurance relating
to my acts or omissions that constitute "St. Paul Liabilities," as defined in
the Formation Agreement, nor (ii) any claim for compensation or benefits that is
accrued through the Closing Date but unpaid under the terms of my employment
agreement with the St. Paul dated ______ __, 2002.

(b) This release includes, but is not limited to
rights and claims arising under the Age Discrimination in Employment Act of
1967, as amended by the Older Workers Benefit Protection Act of 1990 ("ADEA"),
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981,
the Americans with Disabilities Act, the Worker Adjustment and Retraining
Notification Act, the Fair Labor Standards Act, the Family and Medical Leave
Act, any state or local human rights statute or ordinance, any claims or rights
of action relating to breach of contract, public policy, personal or emotional
injury, defamation, additional compensation, or fringe benefits. I specifically
waive the benefit of any statute or rule of law which, if applied to this
release, would otherwise exclude from its binding effect any claims not now
known by me to exist. This release does not purport to waive claims arising
under these laws after the date hereof.

(c) I covenant and agree not to sue or bring any
action, whether federal, state, or local, judicial or administrative, now or at
any future time, against St. Paul, its Affiliates, its or their respective
agents, directors, officers or employees, with respect to any claim released
hereby or arising out of my employment with St. Paul or its Affiliates.
Nevertheless, this release does not purport to limit any right I may have to
file a charge under the ADEA or other civil rights statute or to participate in
an investigation or proceeding conducted by the Equal Employment Opportunity
Commission or other investigatory agency. This release does, however, waive and
release any right to recover damages under the ADEA or other civil rights
statute.

EX-2.1 88th Page of 301 TOC 1st Previous Next ↓Bottom Just 88th
I represent and warrant that I have not sold, assigned,
transferred, conveyed or otherwise disposed of to any third-party, by operation
of law or otherwise, any action, cause of action, suit, debt, obligation,
account, contract, agreement, covenant, guarantee, controversy, judgment,
damage, claim, counterclaim, liability or demand of any nature whatsoever
relating to any matter covered by this release.

(d) I hereby acknowledge that I have been
granted at least twenty-one (21) days within which to consider this release.
This duly executed release must be received by St. Paul by the close of the
business day on the twenty-first (21st) day after the date hereof. The Agreement
must be delivered to St. Paul personally or by certified mail, to the attention
of the General Counsel at the address indicated below. I further acknowledge
that I have been advised to consult with legal counsel prior to executing this
release. I understand that if I execute this release prior to the expiration of
twenty-one (21) days, or choose to forgo the advice of legal counsel, I do so
freely and knowingly, and waive any and all future claims that such action or
actions would affect the validity of this release. I understand that I may
cancel this release at any time on or before the seventh (7th) day following the
date on which I sign the release. To be effective, the decision to cancel must
be in writing and delivered to St. Paul, personally or by certified mail, to the
attention of the General Counsel at the address indicated below on or before the
seventh (7th) day after I sign this release.

All notices hereunder must be mailed by first class mail or by
certified mail addressed as follows:

The St. Paul Companies, Inc. or St. Paul Re, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: General Counsel

This release is the complete understanding between me and St.
Paul in respect of the subject matter of this release and supersedes all prior
agreements relating to the same subject matter. I have not relied upon any
representations, promises or agreements of any kind except those set forth
herein in signing this release.

EX-2.1 89th Page of 301 TOC 1st Previous Next ↓Bottom Just 89th
In the event that any provision of this release should be held
to be invalid or unenforceable, each and all of the other provisions of this
release shall remain in full force and effect. If any provision of this release
is found to be invalid or unenforceable, such provision shall be modified as
necessary to permit this release to be upheld and enforced to the maximum extent
permitted by law. This release is to be governed by and construed and enforced
in accordance with the laws of the State of New York without reference to rules
relating to conflict of laws. This release inures to the benefit of St. Paul,
its Affiliates and its successors and assigns. I have carefully read this
release, fully understand each of its terms and conditions, and intend to abide
by this release in every respect. As such, I knowingly and voluntarily sign this
release.

______________________
[Name]

Dated as of [______ ___, 2002]

EX-2.1 90th Page of 301 TOC 1st Previous Next ↓Bottom Just 90th
Schedule 10.02(b)

St. Paul Information

[Insert S-1 "letter" mark-up]

EX-2.1 91st Page of 301 TOC 1st Previous Next ↓Bottom Just 91st
ALLOCATION OF S-1 INFORMATION

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 2002
REGISTRATION NO. 333-86906
================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT NO. 7
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
PLATINUM UNDERWRITERS HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)

[Enlarge/Download Table]

BERMUDA 6719 NOT APPLICABLE

(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification Number)
Incorporation or Organization) Classification Code Number)

----------------------
CLARENDON HOUSE
2 CHURCH STREET
HAMILTON HM 11
BERMUDA
(441) 295-5950
(Address, including Zip code, and telephone number, including area code, of
registrant's principal executive offices)
CT CORPORATION SYSTEM
1633 BROADWAY, 30TH FL.
NEW YORK, NEW YORK 10019
(800) 624-0909
(Name, address, including Zip code, and telephone number, including area
code, of agent for service)
----------------------
COPIES TO:

[Download Table]

ANDREW S. ROWEN, ESQ. LOIS HERZECA, ESQ.
DONALD R. CRAWSHAW, ESQ. FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
SULLIVAN & CROMWELL ONE NEW YORK PLAZA
125 BROAD STREET NEW YORK, NEW YORK 10004
NEW YORK, NEW YORK 10004 (212) 859-8000
(212) 558-4000

----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
----------------------
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933, check the following box.[ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ]
If the delivery of the prospectus is expected to be made pursuant to
Rule 434 under the Securities Act, check the following box.[ ]
----------------------
CALCULATION OF REGISTRATION FEE

[Enlarge/Download Table]

===================================================================================================

PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED PER SHARE PRICE(1)(2) FEE
---------------------------------------------------------------------------------------------------

Common Shares ($0.01 par value per share).. $23.00 $794,558,000 $73,099(3)
===================================================================================================

(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933, as
amended.

(2) A portion of the shares to be registered represents shares that are to
be offered outside of the United States but that may be resold from
time to time in the United States. Such shares are not being registered
for the purpose of sales outside the United States.

(3) Previously paid.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

================================================================================

EX-2.1 92nd Page of 301 TOC 1st Previous Next ↓Bottom Just 92nd
The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated October 11, 2002.

30,040,000 Shares

PLATINUM UNDERWRITERS HOLDINGS, LTD.

Common Shares

This is an initial public offering of 30,040,000 Common Shares of
Platinum Underwriters Holdings, Ltd. All of the Common Shares are being sold by
Platinum Holdings.

Prior to this offering, there has been no public market for Platinum
Holdings' Common Shares. It is currently estimated that the initial public
offering price per Common Share will be between $22.00 and $23.00. The Common
Shares have been approved for listing on the New York Stock Exchange under the
symbol "PTP" subject to notice of issuance.

Immediately after this offering, public shareholders, The St. Paul
Companies, Inc. and RenaissanceRe Holdings Ltd. will own 75.1%, 15.0% and 9.9%
of the outstanding Common Shares, respectively, assuming no exercise by the
underwriters, St. Paul and RenaissanceRe of their options to purchase additional
Common Shares in connection with this offering.

In addition, we will, by means of a separate prospectus, concurrently
offer % equity security units for an aggregate offering price of $125 million,
plus up to an additional $18.75 million if the underwriters' option to purchase
additional equity security units is exercised in full. Each unit will initially
consist of (a) a contract to purchase Common Shares from Platinum Holdings on
, 2005 and (b) an ownership interest in a % senior note, which we will
guarantee , of Platinum Underwriters Finance, Inc., which will be our wholly
owned subsidiary, due , 2007.

See "Risk Factors" beginning on page 22 to read about certain factors
you should consider before buying Common Shares.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

[Download Table]

PER SHARE TOTAL
--------- -----

Initial public offering price........................ $ $
Underwriting discount................................ $ $
Proceeds, before expenses, to Platinum Holdings...... $ $

To the extent that the underwriters sell more than 30,040,000 Common
Shares, the underwriters have the option to purchase up to an additional
4,506,000 Common Shares from Platinum Holdings at the initial public offering
price less the underwriting discount.

----------------------------
The underwriters expect to deliver the Common Shares against payment in
New York, New York, on , 2002.

Joint Book-Running Managers
---------------------------

GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. SALOMON SMITH BARNEY
---------------------------

BANC OF AMERICA SECURITIES LLC

CREDIT SUISSE FIRST BOSTON
---------------------------

JPMORGAN

Prospectus dated , 2002.

EX-2.1 93rd Page of 301 TOC 1st Previous Next ↓Bottom Just 93rd
PROSPECTUS SUMMARY

Platinum Underwriters Holdings, Ltd. is a newly formed company that
will conduct its business through three operating subsidiaries, Platinum
Underwriters Reinsurance, Inc. ("Platinum US"), Platinum Re (UK) Limited
("Platinum UK") and Platinum Underwriters Bermuda, Ltd. ("Platinum Bermuda").
Platinum UK and Platinum Bermuda are newly formed companies, while Platinum US
has been in existence since 1995 and is an inactive, wholly owned subsidiary of
The St. Paul Companies. Platinum UK is, and upon completion of this initial
public offering, Platinum US will be, owned through Platinum Regency Holdings
("Platinum Ireland"), a newly formed and wholly owned intermediate Irish holding
subsidiary of Platinum Underwriters Holdings, Ltd. Platinum US will be owned
directly by Platinum Underwriters Finance, Inc. ("Platinum Finance"), a newly
formed Delaware corporation, which, upon completion of this initial public
offering, will be a wholly owned subsidiary of Platinum Ireland.

The "Company", "Platinum", "we", "us" and "our" refer to Platinum
Underwriters Holdings, Ltd.'s consolidated operations, including Platinum US,
unless the context otherwise indicates. "Platinum Holdings" refers solely to
Platinum Underwriters Holdings, Ltd. Concurrent with the completion of this
initial public offering, St. Paul will contribute to Platinum between $121
million and $126 million in cash, which we refer to as the "Cash Contribution."
The St Paul Companies, Inc. and its subsidiaries will also contribute to
Platinum substantially all of their continuing reinsurance business and related
assets, including all of the outstanding capital stock of Platinum US, referred
to herein as the "Transferred Business", having a net tangible book value of
approximately $11 million as of June 30, 2002 (after reflecting a dividend of
$15 million to be paid, prior to the completion of the Public Offering, to
United States Fidelity and Guaranty Company, the current parent of Platinum US).
Reinsurance is an arrangement in which a reinsurance company indemnifies an
insurer or other reinsurer, which is referred to as a "ceding company" or
"cedent", against all or a portion of the insurance or reinsurance risks
underwritten by the ceding company under one or more policies. "St. Paul" refers
to The St. Paul Companies, Inc., which is sponsoring our formation, and, unless
the context otherwise requires, its subsidiaries. "St. Paul Re" refers to the
reinsurance segment of St. Paul prior to this initial public offering, which
includes the continuing business and related assets being transferred to
Platinum upon completion of this initial public offering as well as the
reinsurance business that will remain with St. Paul after this offering and not
be renewed and will thereafter expire when claims are ultimately resolved, which
is referred to as the "run-off".

We intend to commence our property and casualty reinsurance business
operations, whereby we indemnify insurers and other reinsurers against all or a
portion of their insurance or reinsurance risks for property loss and related
damage and negligence resulting in bodily injury or property damage, upon
completion of this initial public offering of Common Shares, which we refer to
as the "Public Offering".

Concurrently with the completion of the Public Offering, St. Paul will
make the Cash Contribution and contribute the Transferred Business to us in
exchange for our issuance to St. Paul, on a private placement basis, of
6,000,000 Common Shares and a ten-year option, referred to as the "St. Paul
Option", which will entitle St. Paul to buy from us up to 6,000,000 additional
Common Shares at a price per share equal to 120% of the initial public offering
price. St. Paul will own 15.0% of Platinum Holdings' outstanding Common Shares
following the Public Offering, the St. Paul Investment and the RenaissanceRe
Investment (each as defined below), which Common Shares will be limited to 9.9%
of the voting power of the outstanding Common Shares. If the underwriters
exercise their option to purchase additional Common Shares in the Public
Offering, St. Paul has the option to purchase, at a price per share equal to the
initial public offering price, less the underwriting discount, as many
additional Common Shares as are required in order for it to retain its 15.0%
interest (a maximum of 900,000 additional Common Shares). In this prospectus, we
refer to our issuance to St. Paul of the

EX-2.1 94th Page of 301 TOC 1st Previous Next ↓Bottom Just 94th
15.0% interest in our Common Shares and the St. Paul Option in exchange for the
Cash Contribution and the Transferred Business as the "St. Paul Investment".

Also concurrently with the completion of the Public Offering,
RenaissanceRe Holdings Ltd. (including its subsidiaries, unless the context
otherwise requires, "RenaissanceRe"), a Bermuda company that provides
reinsurance and insurance coverage, will purchase from us in a private
placement, at a price per share equal to the initial public offering price, less
the underwriting discount, 3,960,000 Common Shares, or 9.9% of the Common Shares
outstanding upon completion of the Public Offering, the St. Paul Investment and
the RenaissanceRe Investment. If the underwriters exercise their option to
purchase additional Common Shares in the Public Offering, RenaissanceRe has the
option to purchase, at a price per share equal to the initial public offering
price, less the underwriters' discount, as many additional Common Shares as are
required in order for it to retain its 9.9% interest (a maximum of 594,000
Common Shares). As additional consideration, RenaissanceRe will receive a
ten-year option, referred to as the "RenaissanceRe Option", to purchase up to an
additional 2,500,000 Common Shares at a price per share equal to 120% of the
initial public offering price. In this prospectus, we refer to this private
placement as the "RenaissanceRe Investment". The closing of this private
placement to RenaissanceRe is conditioned on the completion of the Public
Offering, the ESU Offering and the St. Paul Investment.

In addition, we will, by means of a separate prospectus, concurrently
offer % equity security units for an aggregate offering price of $125 million,
plus up to an additional $18.75 million if the underwriters' option to purchase
additional equity security units is exercised in full, (the "ESU Offering").
Each unit consists of (a) a contract to purchase Common Shares from Platinum
Holdings on , 2005 and (b) an ownership interest in a % senior note, which
we will guarantee, of Platinum Finance, due , 2007.

We will have a total capitalization of between approximately $955
million (assuming an initial public offering price of $22.00, a Cash
Contribution of $121 million and no exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares or the
underwriters' option to purchase additional equity security units) and
approximately $1,142 million (assuming an initial public offering price of
$23.00, a Cash Contribution of $126 million and full exercise of the
underwriters', St. Paul's and RenaissanceRe's options to purchase additional
Common Shares in connection with the Public Offering and the underwriters'
option to purchase additional equity security units), upon completion of the
Public Offering, the ESU Offering, the St. Paul Investment and the RenaissanceRe
Investment. The determination of the amount of the Cash Contribution will be
made when the terms of the Public Offering are finally determined. The pro forma
net tangible book value per Common Share following the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment will be
$21.24 per share based on an assumed initial public offering price of $22.50 per
Common Share (the mid-point of the range stated on the front cover page) and a
Cash Contribution of $123 million (the midpoint of the $121 million to $126
million range of the Cash Contribution), assuming no exercise of the
underwriters' options to purchase additional Common Shares or the underwriters'
option to purchase additional equity security units.

In this prospectus, amounts are expressed in U.S. dollars and the
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP"), except as
otherwise indicated.

THE COMPANY

GENERAL

EX-2.1 95th Page of 301 TOC 1st Previous Next ↓Bottom Just 95th
business. In treaty reinsurance, a reinsurer accepts a specified portion of a
category of risks insured by a ceding insurer or reinsurer. A substantial
majority of our business will be written as excess-of-loss reinsurance, which
indemnifies the reinsured against all or a specified portion of loss above a
specified amount. We intend to organize our worldwide reinsurance business
around three operating segments:

- GLOBAL PROPERTY AND MARINE. The Global Property and Marine
operating segment will include principally property reinsurance
coverages and marine reinsurance coverages. Marine reinsurance
coverages include all types of marine vessels and related
warehouses and liabilities. We intend to focus our underwriting
activities primarily on catastrophe excess-of-loss and per risk
excess-of-loss contracts. Catastrophes are events such as
hurricanes and earthquakes that produce pre-tax losses before
reinsurance which, in our definition, are in excess of $10 million
to us or $1 billion to the insurance industry, and per risk
excess-of-loss contracts cover losses in excess of a specified
level on a single risk, rather than aggregate losses for all
covered risks. We intend to write other types of property
reinsurance as well, including selected property proportional
reinsurance, where we will share a proportional part of the
original premiums and losses of the reinsured. This segment
generated $315 million, or 22.8%, of Platinum's 2001 pro forma net
premiums written, which are gross written premiums less premiums
ceded to reinsurers.

- GLOBAL CASUALTY. The Global Casualty operating segment will
include principally general and automobile liability, professional
liability, workers' compensation, accident and health coverages
and casualty clash (casualty clash covers losses arising from a
single set of circumstances covered by more than one cedent's
insurance policy or multiple claimants on one policy). We intend
to focus our underwriting activities primarily on excess-of-loss
reinsurance coverages. This segment generated $592 million, or
42.8%, of Platinum's 2001 pro forma net premiums written.

- FINITE RISK. The Finite Risk operating segment, which writes
policies under which our aggregate risk and return are generally
capped at a finite amount, will include principally
non-traditional reinsurance treaties, including multi-year
excess-of-loss (in which the cedent funds the agreed level of loss
activity over a multi-year period, and the reinsurer charges an
additional amount to provide a profit margin and to cover its
costs and the risk that losses are worse than the agreed level),
aggregate stop loss (which provides protection from losses arising
from a wide range of circumstances in excess of an aggregate
specified level), finite quota share (in which the reinsurer's
losses and profit potential are capped at specified amounts), loss
portfolio transfer (which typically transfers to the reinsurer all
liabilities for incurred losses, subject to an aggregate loss
limit specified in the contract), and adverse loss development
contracts (which typically provide reinsurance coverage for losses
in excess of the carried loss reserves of the ceding company at
the transaction date). We intend to provide clients, either
directly or through brokers, with customized solutions for their
risk management and other financial management needs. We intend to
focus our finite risk underwriting activities primarily on
multi-year excess-of-loss and aggregate stop loss reinsurance
treaties. Coverage classes within these products will primarily
include property, casualty and marine exposures. This segment
generated $475 million, or 34.4%, of Platinum's 2001 pro forma net
premiums written.

In addition, we may write other property and casualty reinsurance on an
opportunistic basis. For a discussion of the basis on which pro forma net
premiums written were determined, see "Selected Pro Forma Financial
Information and Operating Data" below.

EX-2.1 96th Page of 301 TOC 1st Previous Next ↓Bottom Just 96th
BACKGROUND AND THE TRANSFERRED BUSINESS

St. Paul and its subsidiaries constitute one of the oldest insurance
organizations in the United States, dating back to 1853. Through its division
St. Paul Re, St. Paul has been engaged in the reinsurance business since 1983.
In December of 2001, in an effort to enhance the profitability of its
reinsurance business, St. Paul decided to narrow the product focus of its
reinsurance operations and to exit certain lines of that business. As part of
this effort, St. Paul Re reduced its anticipated 2002 exposure and expenses by
exiting unprofitable lines of business and reducing the number of reinsurance
branch offices outside the U.S. The narrowing of reinsurance product lines
included exiting aviation, bond and credit reinsurance coverages, as well as
certain financial risk and capital markets lines. International branch office
closings included Munich, Brussels, Hong Kong, Sydney and Singapore. In addition
to curtailing various reinsurance operations, St. Paul's management decided that
its reinsurance business and its primary insurance business should ideally
operate as separate entities because of their different risk profiles and
business characteristics.

Accordingly, St. Paul determined to sponsor the formation of Platinum
Holdings and its subsidiaries. Contingent upon the completion of the Public
Offering, St. Paul will contribute to us the Cash Contribution and the
Transferred Business through the arrangements described below:

- CASH CONTRIBUTION. At the completion of the Public Offering, St.
Paul will make the Cash Contribution in the amount of between $121
million and $126 million. The determination of the amount of the
Cash Contribution will be made when the terms of the Public
Offering are finally determined. An assumed Cash Contribution of
$123 million will result in a pro forma net tangible book value
per Common Share of $21.24 following the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment
based on an assumed initial public offering price of $22.50 per
Common Share (the midpoint of the range stated on the front cover
page) and assuming no exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares in
connection with the Public Offering or the underwriters' option to
purchase additional equity security units. Cash Contributions of
$121 million and $126 million will result in net tangible book
values of $20.76 and $21.71 per Common Share, respectively,
assuming an initial public offering price of $22.00 and $23.00,
respectively, and assuming no exercise of the underwriters'
options to purchase additional Common Shares or additional equity
security units.

- RENEWAL OPPORTUNITIES AND COMMITMENTS. We will be acquiring from
St. Paul Re its existing customer lists and the right to seek to
renew substantially all of St. Paul Re's continuing reinsurance
contracts. We also will assume commitments, if any, of St. Paul Re
to offer reinsurance coverages in the future.

- ASSUMED REINSURANCE CONTRACTS. Through 100% quota share
retrocession agreements (the "Quota Share Retrocession
Agreements"), we will reinsure substantially all of the
reinsurance contracts St. Paul Re entered into on or after January
1, 2002, which we refer to as the "Assumed Reinsurance Contracts".
St. Paul Re will retain all of its reinsurance exposure not being
transferred to us and will administer the associated run-off.
Consequently, we will not assume any underwriting exposure with
respect to reinsurance contracts entered into by St. Paul prior to
January 1, 2002, except as noted below with respect to finite
reinsurance. St. Paul will also retain all liabilities relating to
the flooding in Europe in August 2002 and an intermediate layer of
liability for named storms in existence at the time of completion
of the Public Offering which cause insured damage within ten days
of such time, as described herein. We will receive as
consideration cash and other assets in an amount equal to the
aggregate of all applicable loss reserves (excluding reserves
relating to liabilities retained by St. Paul), allocated loss
adjustment expense reserves (which are reserves relating to the
expense incurred in settling claims), other reserves related to
non-traditional reinsurance treaties, ceding commission reserves
(which are reserves relating to commissions payable to

EX-2.1 97th Page of 301 TOC 1st Previous Next ↓Bottom Just 97th
ceding insurers) and unearned premium reserves (which are reserves
equal to the difference between premiums written and premiums earned)
subject to agreed upon adjustments, net of ceding commissions under
the Quota Share Retrocession Agreements as of the transfer date
(which is 12:01 a.m., on the day immediately following the date of
the completion of the Public Offering). Underwriting gain or loss
with respect to the Assumed Reinsurance Contracts for the period from
January 1, 2002 to the transfer date will be retained by St. Paul.

- The terms of the Quota Share Retrocession Agreements
provide, with limited exceptions, that retrocessional
reinsurance, which is reinsurance obtained by a reinsurer to
insure against all or a portion of its reinsurance written,
purchased by St. Paul Re shall be for our expense and shall
inure to our benefit in respect of the Assumed Reinsurance
Contracts, providing us with remaining retrocessional
reinsurance coverage for such contracts through 2002 or the
earlier termination or expiration of the various
retrocession agreements. We will bear all the risk
associated with non-payment by third party retrocessionaires
under such retrocessional reinsurance. All the Quota Share
Retrocession Agreements will take effect as of 12:01 a.m. on
the day immediately following the date of the completion of
the Public Offering. Accordingly, while St. Paul will be
contractually committed to effect the transfer, the
effective time of the transfer of the Assumed Reinsurance
Contracts will occur after the sale to investors of Common
Shares in the Public Offering.

- In the case of business written in the U.S., we will have
the right to underwrite specified reinsurance business on
behalf of St. Paul for a period of one year following the
completion of the Public Offering in cases where we are
unable to underwrite that business ourselves because,
despite using our reasonable best efforts, we have not
obtained the necessary regulatory license or approval to do
so or we have not yet been approved as a reinsurer by the
cedent, and we will reinsure such business pursuant to the
Quota Share Retrocession Agreements. In the case of the U.K.
business, until the earlier of the first anniversary of the
completion of the Public Offering, or Platinum UK obtaining
the required license, we will have the right to underwrite
specified reinsurance business on behalf of St. Paul, and we
will reinsure such business pursuant to the Quota Share
Retrocession Agreements. This will allow us to participate
in reinsurance business which is bound after the completion
of the Public Offering without any delay occasioned by the
start-up of our operations, including the lack of required
licenses, and facilitate the transition of St. Paul Re's
business to us.

- For a period of three years following the completion of the
Public Offering, we will underwrite on behalf of St. Paul,
with the consent of St. Paul, renewals of in-force contracts
of finite reinsurance. St. Paul will retrocede to us 100% of
the unpaid and future losses under currently in-force
contracts, and we will have the option to reinsure losses
under certain renewed contracts and will be required to
offer to reinsure losses under other renewed contracts, for
a fair market retrocession premium pursuant to the Quota
Share Retrocession Agreements. Under the Quota Share
Retrocession Agreements, a portion of future premiums will
be applied to settle balances related to prior year
experience for the benefit of St. Paul. St. Paul will have
an option to renew this arrangement with us for a subsequent
period of two years. In the U.K., this arrangement will be
limited to finite treaties which St. Paul Re has entered
into with a small number of identified cedents and any
further finite treaties which may be entered into on behalf
of St. Paul Re UK prior to the first anniversary of the
completion of the Public Offering.

- RELATED ASSETS. We will be acquiring from St. Paul tangible and
intangible assets relating to the continuing businesses being
transferred to us, including furniture and equipment,

EX-2.1 98th Page of 301 TOC 1st Previous Next ↓Bottom Just 98th
systems and software, assignments of leases, licenses and other
assets, as well as all of the outstanding capital stock of Platinum
US.

- EMPLOYEES. Upon or following the completion of the Public
Offering, we expect to employ approximately 150 employees
previously employed by St. Paul Re.

St. Paul has agreed with us that, subject to certain exceptions, for a
period of two years following the completion of the Public Offering, it will not
offer reinsurance of the type covered by the Assumed Reinsurance Contracts and
for which we have acquired renewal rights or hire certain of our employees.

For discussion of the share ownership interests St. Paul will obtain
for its contribution of the Transferred Business, see "St. Paul's Share
Ownership" below.

OUR ORGANIZATION

The following chart summarizes our corporate structure upon completion
of the transactions contemplated by this prospectus. Our operating business will
be conducted by Platinum US, Platinum UK and Platinum Bermuda. Platinum Bermuda
expects to reinsure up to approximately 70% of Platinum US's reinsurance
business, excluding business subject to the Quota Share Retrocession Agreements,
written after the completion of the Public Offering and up to approximately 55%
of Platinum UK's reinsurance business, excluding business subject to the Quota
Share Retrocession Agreements, written after the Public Offering. St. Paul will
continue to write reinsurance in the U.K. and reinsure it 100% to Platinum US
for up to one year following the completion of the Public Offering or until
Platinum UK is licensed, whichever is earlier. For a discussion of potential
future limits on the portion of the reinsurance written by Platinum UK after the
completion of the Public Offering which can be reinsured to Platinum Bermuda,
see "Business--Our Business--Regulation--U.K. Regulation--Proposed Limits on
Concentration of Reinsurance Exposures".

[Organization Chart]

EX-2.1 99th Page of 301 TOC 1st Previous Next ↓Bottom Just 99th
MANAGEMENT AND DIRECTORS

We have assembled a senior management team of experienced insurance
industry professionals, whose backgrounds include underwriting and marketing
property and casualty reinsurance worldwide. Steven H. Newman, who is the
Chairman of Platinum Holdings' Board of Directors, Jerome T. Fadden, who is
Platinum Holdings' President and Chief Executive Officer, William A. Robbie, who
is Chief Financial Officer of Platinum Holdings, Michael E. Lombardozzi, who is
General Counsel of Platinum Holdings, Michael D. Price, who will be Chief
Operating Officer and Chief Underwriting Officer of Platinum US, and Neal J.
Schmidt, who will be Chief Actuary of Platinum US, in each case upon completion
of the Public Offering, have extensive experience in the global property and
casualty reinsurance industry. The new senior management team intends to
initiate a number of actions to improve the underwriting performance and
profitability of the Company. These actions are described more fully under
"Platinum's Strategy" below.

Our Board of Directors consists of seven members: Mr. Newman; Mr.
Fadden; Jay S. Fishman, Chairman of the Board of Directors and Chief Executive
Officer of The St. Paul Companies, Inc.; H. Furlong Baldwin, Chairman of
Mercantile Bankshares Corporation; Jonathan F. Bank, Senior Vice President of
Tawa Associates Ltd.; Dan R. Carmichael, President and Chief Executive Officer
of Ohio Casualty Corporation; and Peter T. Pruitt, retired Chairman of Willis Re
Inc.

OUR COMPETITIVE STRENGTHS

We believe that with our experienced management team, unencumbered
capital base and the long-term potential of the business and assets of St. Paul
Re obtained from St. Paul, we will have the benefits of being both an
established business and a new market entrant. As a well-capitalized, focused
reinsurer, we believe we will be able to expand our relationships with clients
of St. Paul Re as well as new clients to a greater extent than if our operations
were part of a multi-line insurer such as St. Paul.

We intend to focus our initial marketing efforts on those brokers and
their clients with which St. Paul Re has established business relationships. We
feel that the existing portfolio of business generated by St. Paul Re represents
a valuable asset given the renewal nature of the reinsurance industry and the
importance of continuity of relationships. We believe that the market
perceptions and reputation established by St. Paul Re with respect to service
and responsiveness will benefit us in light of the transfer of personnel and
underwriting activities from St. Paul Re to us.

PLATINUM'S STRATEGY

Our goal is to achieve superior long-term returns for our shareholders,
while establishing Platinum as a conservative risk manager and market leader in
certain classes of property and casualty reinsurance.

- BUILD OUR FUTURE ON A STRONG FOUNDATION. We will commence
operations with the benefit of the Transferred Business:

EX-2.1 100th Page of 301 TOC 1st Previous Next ↓Bottom Just 100th
- ADD NEW EXECUTIVE LEADERSHIP TO EXISTING TALENT. In order to take
full advantage of the historical strengths of St. Paul Re, we have
significantly strengthened our senior management team with the
addition of Mr. Newman and Mr. Fadden. Mr. Newman and Mr. Fadden
have extensive experience in leading publicly traded reinsurance
companies and intend to implement a number of initiatives to
create a more focused and more profitable reinsurance business.

- FOCUS ON PROFITABILITY, NOT MARKET SHARE. Our new management
team intends to pursue a strategy that emphasizes
underwriting discipline and profitability over market share.
Key elements of this strategy will be prudent risk
selection, appropriate pricing through strict underwriting
discipline and increasing our writings of lines of business,
which we believe will contribute to our long-term
profitability.

- EXERCISE DISCIPLINED UNDERWRITING AND RISK MANAGEMENT. We
intend to exercise risk management discipline by (i)
maintaining a diverse spread of risk in our book of business
across products and geographic zones, (ii) focusing on
excess-of-loss contracts as opposed to proportional
contracts, and (iii) reducing our aggregate catastrophe
exposure.

- OPERATE A LEAN AND EXPENSE-FOCUSED UNDERWRITING BUSINESS. We
believe a lean underwriting culture will support our focus
on profitability and allow us to be more responsive to
changing market conditions. We intend to keep our headcount
low and maintain a limited number of offices. In addition,
we expect to originate most of our business from brokers,
rather than directly from ceding companies or cedents, which
are insurance companies seeking reinsurance coverages, which
we believe will keep our expenses low.

- GROW OUR BUSINESS BY LEVERAGING OUR GLOBAL PLATFORM. We intend to
operate in all three of the world's leading reinsurance markets
with offices in New York, London and Bermuda. St. Paul Re has
conducted authorized reinsurance activities in the U.S. and London
for many years. Our new Bermuda subsidiary will provide us with
both a new market in which to write reinsurance and the
flexibility to provide reinsurance products that are best
facilitated by an offshore company.

- OPERATE FROM A POSITION OF FINANCIAL STRENGTH. As a newly formed
company, our initial capital position is unencumbered by any
development of loss reserves for business written prior to January
1, 2002, which are reserves established to reflect estimated cost
of loss payments that ultimately will be required to be paid. Upon
completion of the Public Offering, the ESU Offering, the St. Paul
Investment and the RenaissanceRe Investment, we expect to have a
total capitalization of between approximately $955 million
(assuming an initial public offering price of $22.00, a Cash
Contribution of $121 million and no exercise of the underwriters',
St. Paul's or RenaissanceRe's options to purchase additional
Common Shares or the underwriters' option to purchase additional
equity security units) and approximately $1,142 million (assuming
an initial public offering price of $23.00, a Cash Contribution of
$126 million and full exercise of the underwriters', St. Paul's
and RenaissanceRe's options to purchase additional Common Shares
in connection with the Public Offering and the underwriters'
option to purchase additional equity security units). Our
investment strategy will focus on security and stability in our
investment portfolio by maintaining a diversified portfolio that
will consist primarily of investment grade fixed-income
securities.

RECENT INDUSTRY TRENDS

After an extended period of increased competition and eroding premiums,
the reinsurance markets began experiencing improvements in rates, terms and
conditions in the first quarter of 2000. These improvements continued in 2001
and were accelerated by the terrorist attack of September 11, 2001, which
resulted in a range of estimated property and casualty insurance losses

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to the insurance industry of between $30 billion and $35 billion, the largest
estimated catastrophe losses ever experienced by the industry. We believe
property and other reinsurance premiums have often risen in the aftermath of
significant catastrophe losses. As claims are reserved, industry surplus is
depleted and the industry's capacity to write new business diminishes. At the
same time, there appears to be heightened awareness that commercial properties
are exposed to a variety of risks. We believe that market trends similar to
those that have occurred in past cycles are developing in the current
environment. With respect to January, April and July 2002 renewals, St. Paul Re
experienced substantial rate increases, generally ranging from 20% to 50%
depending on the line of business. We believe that the current imbalance between
the increased demand for property-related insurance and reinsurance and the
reduced supply of this type of coverage will continue at least for the immediate
future.

ST. PAUL'S SHARE OWNERSHIP

St. Paul has determined that the efficiency, profitability and
competitive position of its reinsurance operations can be maximized by
separating them from St. Paul's primary insurance operations. Despite the
separation of the two businesses, St. Paul will continue to participate in
future financial results of the reinsurance business through its ownership of
Common Shares as a result of the St. Paul Investment.

In return for the Cash Contribution and the Transferred Business, we
will issue 6,000,000 Common Shares to St. Paul (so that St. Paul will own 15.0%
of our outstanding Common Shares following the Public Offering, the St. Paul
Investment and the RenaissanceRe Investment) and the St. Paul Option. St. Paul's
Common Shares will be limited to 9.9% of the voting power of the outstanding
Common Shares. If the underwriters exercise their option to purchase additional
Common Shares in the Public Offering, St. Paul will have the option to purchase
additional Common Shares, at a price per share equal to the initial public
offering price less the underwriting discount, in order for it to retain its
15.0% interest. In addition, we will grant St. Paul the St. Paul Option, which
is a ten-year option to purchase up to 6,000,000 Common Shares at 120% of the
initial public offering price. Exercise of such option by St. Paul in full
immediately after completion of the Public Offering, the St. Paul Investment and
the RenaissanceRe Investment would increase its percentage interest in our
Common Shares to approximately 26.1%, assuming no exercise of the underwriters',
St. Paul's or RenaissanceRe's options to purchase additional Common Shares in
connection with the Public Offering or of the RenaissanceRe Option. However, St.
Paul has agreed with us that, prior to any exercise of the St. Paul Option, it
will, if necessary, dispose of a sufficient number of Common Shares so that,
immediately after exercise of the St. Paul Option, St. Paul would not be a
"United States 25% Shareholder" as defined under "Description of Our Common
Shares--Restrictions on Transfers". St. Paul has informed us that it currently
intends to continue its share ownership in Platinum Holdings for the foreseeable
future.

RENAISSANCERE'S SHARE OWNERSHIP AND BUSINESS ARRANGEMENTS

In connection with the RenaissanceRe Investment, we will issue to
RenaissanceRe 3,960,000 Common Shares (so that RenaissanceRe will own 9.9% of
our outstanding Common Shares following the Public Offering, the St. Paul
Investment and the RenaissanceRe Investment) and the RenaissanceRe Option. If
the underwriters exercise their option to purchase additional Common Shares in
the Public Offering, RenaissanceRe will have the option to purchase additional
Common Shares, at a price per share equal to the initial public offering price
less the underwriting discount, in order for it to retain its 9.9% interest. In
addition, we will grant RenaissanceRe the RenaissanceRe Option, which is a
ten-year option to purchase up to 2,500,000 Common Shares at 120% of the initial
public offering price. Exercise of such option by RenaissanceRe in full
immediately after completion of the Public Offering, the St. Paul Investment and
the RenaissanceRe Investment would increase its percentage interest in our
Common Shares to approximately 15.2%, assuming no

EX-2.1 102nd Page of 301 TOC 1st Previous Next ↓Bottom Just 102nd
exercise of the underwriters', St. Paul's or RenaissanceRe's options to purchase
additional Common Shares in connection with the Public Offering or of the St.
Paul Option. RenaissanceRe has agreed with us that, prior to any exercise of the
RenaissanceRe Option, it will, if necessary, dispose of a sufficient number of
Common Shares so that, immediately after exercise of the RenaissanceRe Option,
RenaissanceRe would not beneficially own more than 19.9% of our outstanding
voting securities (or up to 24.9% with our approval). See "Description of Our
Common Shares--Restrictions on Transfers". RenaissanceRe has informed us that it
currently intends to continue its share ownership in Platinum Holdings for the
foreseeable future.

We have entered into an investment agreement with St. Paul and
RenaissanceRe, which provides RenaissanceRe with, among other things, the right
to nominate one director to our board and, in addition, to designate a
non-voting representative to attend our board meetings, subject to certain
conditions.

We also will enter into an agreement, which we refer to as the
"Services and Capacity Reservation Agreement" in this prospectus, with
RenaissanceRe, pursuant to which in exchange for certain payments by us to
RenaissanceRe, RenaissanceRe will provide services to us in connection with the
reviewing and repositioning of our property catastrophe book of business for a
period of five years. These services will include assisting us in measuring risk
and managing our aggregate catastrophe exposures. In addition, we expect that we
and RenaissanceRe may refer business to each other, to be accepted in the
discretion of the party receiving the referral, and that compensation will be
paid for referral business at negotiated rates.

RenaissanceRe is a Bermuda company principally engaged, through its
operating subsidiaries, in providing reinsurance and insurance coverage that is
subject to the risk of natural and man-made catastrophes. For a further
discussion of our relationship with RenaissanceRe, see "Certain Relationships
and Related Transactions--The RenaissanceRe Investment".

PRINCIPAL EXECUTIVE OFFICES

Platinum Holdings was organized on April 19, 2002 as a company limited
by shares under Bermuda law. Platinum Holdings' principal executive offices are
located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Its
telephone number is (441) 295-5950.

EX-2.1 103rd Page of 301 TOC 1st Previous Next ↓Bottom Just 103rd
THE PUBLIC OFFERING, THE ST. PAUL INVESTMENT, THE RENAISSANCERE INVESTMENT
AND THE ESU OFFERING

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Common Shares Offered in the
Public Offering.................... 30,040,000 shares.

Common Shares Privately Placed to
St. Paul........................... 6,000,000 shares.

Common Shares Privately Placed to
RenaissanceRe...................... 3,960,000 shares.

Common Shares Outstanding after the
Public Offering, the St. Paul
Investment and the RenaissanceRe
Investment......................... 40,000,000 shares.

NYSE Symbol.......................... PTP.

St. Paul Investment and the
RenaissanceRe Investment........... At the completion of the Public Offering, St. Paul will make the Cash Contribution in the
amount of between $121 million and $126 million and will contribute to Platinum the
Transferred Business, which had a net tangible book value of approximately $11 million as of
June 30, 2002 (after reflecting a dividend of $15 million to be paid, prior to the
completion of the Public Offering, to United States Fidelity and Guaranty Company, the
current parent of Platinum US). St. Paul's Cash Contribution, together with the net tangible
book value of Platinum US as of June 30, 2002 (consisting of approximately $5 million of
cash and cash equivalents after reflecting the pre-closing dividend of $15 million referred
to above) to be contributed as part of the Transferred Business, will represent an amount
approximately equal to the initial public offering price less the underwriters' discount for
the Common Shares privately placed to St. Paul. St. Paul will also contribute to Platinum,
as part of the Transferred Business, certain tangible assets and other intangible assets
with a net book value of approximately $7 million as of June 30, 2002. RenaissanceRe will
pay, in return for the Common Shares privately placed to it, a per share purchase price
equal to the initial public offering price less the underwriters' discount, or in aggregate
between $83 million and $86 million. An assumed initial public offering price of $22.50, a
Cash Contribution of $123 million and a purchase price of $84 million from RenaissanceRe,
will result in a pro forma net tangible book value per Common Share of $21.24 following the
Public Offering, the ESU Offering, the St. Paul Investment and the RenaissanceRe Investment,
assuming no exercise of the underwriters', St. Paul's or RenaissanceRe's options to purchase
additional Common Shares in connection with the Public Offering or the underwriters' option
to purchase additional equity security

EX-2.1 104th Page of 301 TOC 1st Previous Next ↓Bottom Just 104th
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units. Cash Contributions of $121 million and $126 million and $83 million to $86 million
from the RenaissanceRe Investment will result in net tangible book values of $20.76 and
$21.71 per Common Share, respectively, assuming initial public offering prices of $22.00 and
$23.00, respectively, and assuming no exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares in connection with the Public
Offering or the underwriters' option to purchase additional equity security units.

Use of Proceeds...................... Assuming no exercise of the underwriters', St. Paul's or RenaissanceRe's options to purchase
additional Common Shares in connection with the Public Offering or the underwriters' option
to purchase additional equity security units, we expect to receive net proceeds (after the
underwriters' discount and before expenses) from the Public Offering, the Cash Contribution,
the RenaissanceRe Investment and the ESU Offering as set forth in the following table:

IPO PRICE IPO PRICE IPO PRICE
OF $22.00 OF $22.50 OF $23.00
PER SHARE PER SHARE PER SHARE
--------- --------- ---------
($ IN MILLIONS)
Public Offering...................... $ 626 $ 640 $ 655
St. Paul Cash Contribution........... 121 123 126
RenaissanceRe Investment............. 83 84 86
ESU Offering......................... 120 120 120
Total Net Proceeds(1)................ $ 949 $ 968 $ 987

(1) Components may not add to totals due to rounding.

Assuming full exercise (which is in their sole discretion) by the underwriters, St. Paul and
RenaissanceRe of their options to purchase additional Common Shares in connection with the
Public Offering and the underwriters' option to purchase additional equity security units,
we expect to receive net proceeds (after the underwriters' discount and before expenses)
from the Public Offering, the Cash Contribution, the RenaissanceRe Investment and the ESU
Offering as set forth in the following table:

IPO PRICE IPO PRICE IPO PRICE
OF $22.00 OF $22.50 OF $23.00
PER SHARE PER SHARE PER SHARE
--------- --------- ---------
($ IN MILLIONS)
Public Offering...................... $ 720 $ 736 $ 753
St. Paul Cash Contribution........... 139 143 146
RenaissanceRe Investment............. 95 97 99
ESU Offering......................... 138 138 138
Total Net Proceeds................... $ 1,092 $ 1,114 $ 1,136

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A portion of the net proceeds of the Public Offering, the Cash Contribution and the
RenaissanceRe Investment, currently estimated at approximately $10 million, will be retained
by Platinum Holdings and the balance will be contributed to the capital of Platinum US (in
an amount not less than $250 million, which includes net proceeds from the ESU Offering as
discussed below), Platinum UK (in an amount not less than $150 million, upon its being
licensed in the United Kingdom), Platinum Ireland (in an amount not less than $100 million,
substantially all of which will be used to purchase a surplus note issued by Platinum US)
and Platinum Bermuda (in an amount not less than $375 million). To the extent we receive net
proceeds from the Public Offering, the Cash Contribution and the RenaissanceRe Investment in
excess of the minimum amounts stated above, we expect to contribute substantially all such
proceeds to the capital of Platinum Bermuda. All but approximately $20 million of the net
proceeds from the ESU Offering (or approximately $23 million if the underwriters exercise in
full their option to purchase additional equity security units) will be contributed to
Platinum US. The remaining net proceeds from the ESU Offering will be retained by Platinum
Finance.
See "Use of Proceeds."

Dividend Policy...................... The Board of Directors of the Company intends to declare and pay quarterly cash dividends of
$ per Common Share beginning in the first quarter of 2003. The declaration and payment of
dividends to holders of Common Shares will be at the discretion of the Board of Directors
but will be prohibited if certain contract adjustment payments in respect of the equity
security units are deferred. See "Dividend Policy".

ESU Offering......................... Concurrently with the Public Offering, we will offer, by means of a separate prospectus, %
equity security units for an aggregate offering price of $125 million, plus an additional
$18.75 million if the underwriters' option to purchase additional equity security units is
exercised in full. Each unit will initially consist of (a) a contract to purchase Common
Shares from Platinum Holdings and (b) a 1/40, or 2.5%, ownership interest in a % senior
note of Platinum Finance, due , 2007, with a principal amount of $1,000.

The purchase contract underlying an equity security unit will obligate holders to purchase,
and us to sell, for $25, on , 2005, a number of newly issued Common Shares equal to a
settlement rate based on the average trading price of our Common Shares at that time. We
will make quarterly contract adjustment payments on the purchase contracts at the annual
rate of % of the stated amount of $25 per purchase contract, subject to our rights to
defer these payments.

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The senior notes of Platinum Finance will be unsecured and senior obligations of Platinum
Finance, guaranteed as to principal and interest by Platinum Holdings on a senior and
unsecured basis. The notes will mature on , 2007. Each note will initially bear interest
at the rate of % per year, payable quarterly. The applicable interest rate on the notes will
be reset, and the notes remarketed, as described under "Description of the Equity Security
Units".

During any period in which we defer contract adjustment payments, in general we cannot
declare or pay any dividend or distribution on our Common Shares or take specified other
actions. We do not expect to defer the contract adjustment payments.

The completion of the ESU Offering and the completion of the Public Offering are conditioned
on each other.

Underwriters' Options to Purchase
Additional Securities.............. If the underwriters exercise their option to purchase additional Common Shares in whole or
in part, St. Paul has the option to purchase (at a price per share equal to the initial
public offering price less the underwriting discount) in the aggregate up to an additional
900,000 Common Shares, in order to maintain its proportionate initial share ownership in
Platinum Holdings at 15.0%, and RenaissanceRe has the option to purchase (at a price per
share equal to the initial public offering price less the underwriting discount) in the
aggregate up to an additional 594,000 Common Shares, in order to maintain its proportionate
initial share ownership in Platinum Holdings at 9.9%. As a result, if the underwriters', St.
Paul's and RenaissanceRe's options to purchase additional Common Shares in connection with
the Public Offering are exercised in full, there would be 46,000,000 Common Shares
outstanding upon completion of the Public Offering, the St. Paul Investment and the
RenaissanceRe Investment, and, if the underwriters' option to purchase additional equity
security units is exercised in full, $143.75 million of equity security units outstanding
upon completion of the ESU Offering.

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St. Paul Option...................... We will grant St. Paul a ten-year option, exercisable in whole or in part, to purchase up to
6,000,000 Common Shares at 120% of the initial public offering price. Exercise of such
option by St. Paul in full immediately after completion of the Public Offering, the St. Paul
Investment and the RenaissanceRe Investment would increase its percentage interest in our
Common Shares to approximately 26.1%, assuming no exercise of the underwriters', St. Paul's
or RenaissanceRe's options to purchase additional Common Shares in connection with the
Public Offering or of the RenaissanceRe Option. The option has antidilution provisions as
described in this prospectus. St. Paul has agreed with us that, prior to any exercise of the
St. Paul Option, it will, if necessary, dispose of a sufficient number of Common Shares so
that, immediately after exercise of the St. Paul Option, St. Paul will not be a "United
States 25% Shareholder" as defined under "Description of Our Common Shares--Restrictions on
Transfer."

RenaissanceRe Option................. We will grant RenaissanceRe a ten-year option, exercisable in whole or in part, to purchase
up to 2,500,000 Common Shares at 120% of the initial public offering price. Exercise of such
option by RenaissanceRe in full immediately after completion of the Public Offering, the St.
Paul Investment and the RenaissanceRe Investment would increase its percentage interest in
our Common Shares to approximately 15.2%, assuming no exercise of the underwriters' option
to purchase additional Common Shares in connection with the Public Offering or of the St.
Paul Option. The option has antidilution provisions as described in this prospectus.
RenaissanceRe has agreed with us that, prior to any exercise of the RenaissanceRe Option, it
will, if necessary, dispose of a sufficient number of Common Shares so that, immediately
after exercise of the RenaissanceRe Option, RenaissanceRe will not beneficially own more
than 19.9% of our outstanding voting securities (or up to 24.9% with our approval). See
"Description of Our Common Shares--Restrictions on Transfer."

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SELECTED PRO FORMA FINANCIAL INFORMATION AND OPERATING DATA

Financial information in this prospectus is presented in U.S. dollars
and on the basis of U.S. GAAP unless otherwise indicated.

In this prospectus, we are presenting unaudited pro forma financial
information of Platinum Holdings with respect to the Transferred Business,
contingent upon the completion of this Public Offering. This pro forma financial
information is based on the terms of the agreements between Platinum and St.
Paul effecting the transfer of the Transferred Business, the material terms of
which are described under "Certain Relationships and Related Transactions",
which we refer to herein as the "Inception Agreements".

We caution that the Platinum pro forma consolidated balance sheet and
pro forma combined underwriting results presented herein are not indicative of
the actual results that we expect to achieve once we commence operations. Many
factors may cause our actual results to differ materially from the pro forma
consolidated balance sheet and underwriting results including, but not limited
to, the following:

- Platinum's pro forma combined statement of underwriting results
includes premium and loss development on business entered into
prior to January 1, 2002. Under the Quota Share Retrocession
Agreements, we are assuming no premium or loss development on
business entered into prior to January 1, 2002. Therefore, our
reported premiums written and earned and reported losses and loss
adjustment expenses, which are the expenses of settling claims, in
our initial years of operation could be substantially lower than
as presented in Platinum's pro forma combined statement of
underwriting results. As such, our reported results in our initial
years of operation will not be subject to prior year development
for periods prior to January 1, 2002.

- Following the Public Offering, we will report underwriting results
under the Quota Share Retrocession Agreements for the period
through the date of completion of the Public Offering based on the
application of retroactive reinsurance accounting, resulting in
the premiums earned and losses incurred by St. Paul during such
period being excluded from our statement of underwriting results.
Due to this exclusion, following the Public Offering, our reported
2002 premiums written and earned and our net underwriting results
in 2002 could be substantially different than as presented in
Platinum's pro forma combined statement of underwriting results.

- Platinum's pro forma consolidated balance sheet reflects the
inception of the Quota Share Retrocession Agreements assuming
transferred balances as of June 30, 2002. Platinum's actual
consolidated balance sheet will report transferred amounts
determined as of 12:01 a.m. on the day immediately following the
date of completion of the Public Offering. Accordingly,
underwriting gain or loss with respect to the Assumed Reinsurance
Contracts for the period from January 1, 2002 through such date
will be retained by St. Paul.

- Although we expect to continue to be afforded the benefits of most
of St. Paul Re's retrocessional reinsurance program through their
expiration during 2002, we may enter into retrocessional
reinsurance contracts with significantly different terms and
conditions from those that have been made available to us from St.
Paul Re and which form the basis of our initial operations.

- The additional and reinstatement premiums, which are premiums
charged for the restoration of the limit of a catastrophe contract
to its full amount after payment of losses, recorded in 2001 by
St. Paul Re's Finite Risk operating segment were primarily caused
by losses relating

EX-2.1 109th Page of 301 TOC 1st Previous Next ↓Bottom Just 109th
to the September 11, 2001 terrorist attack. These additional and
reinstatement premiums were unusually high and not necessarily
indicative of the recurring premium volume we expect to write in
that business segment.

- Platinum's pro forma financial statements continue to reflect the
discounting of the liability for certain Assumed Reinsurance
Contracts based on our current intention to make arrangements to
permit such discounting. If we do not put such arrangements in
place, reinsurance contracts of a similar type entered into in the
future would be reported on an undiscounted basis.

PRO FORMA CONSOLIDATED BALANCE SHEET DATA

We have prepared our unaudited pro forma consolidated balance sheet as
of June 30, 2002 to reflect our initial capitalization in the amount of $120,000
and adjusted to reflect, among other things,

- amounts reflecting (a) the receipt of approximately $725 million,
representing the estimated net proceeds from the Public Offering
and the RenaissanceRe Investment based on an assumed initial
public offering price of $22.50 per Common Share (the midpoint of
the range stated on the front cover page), without giving effect
to any exercise of the underwiters', St. Paul's or RenaissanceRe's
options to purchase additional Common Shares in connection with
the Public Offering, (b) the redemption of the Common Shares that
were issued at inception and capital contributed prior to the
Public Offering, (c) the payment of certain formation and
organization expenses, as discussed in Notes 2 and 12 to our
consolidated balance sheet, on pages F-5 and F-12 of this
prospectus, which total $5.1 million, of which $2.1 million has
been expensed as of June 30, 2002, and (d) our entering into, and
accruing for, the Services and Capacity Reservation Agreement as
of June 30, 2002. Additional formation and organization expenses
will be incurred prior to closing. It is further assumed that the
net proceeds from the Public Offering will be invested in
long-term, taxable fixed income securities;

- amounts representing the receipt of St. Paul's Cash Contribution
of $123 million (the midpoint of the $121 million to $126 million
range for the Cash Contribution) and the contribution of the
Transferred Business at historical cost in exchange for the
issuance of Common Shares and the St. Paul Option. Amounts related
to net tangible assets contributed to Platinum by St. Paul are
recorded at St. Paul's book value as of June 30, 2002. Assets as
of June 30, 2002 include approximately $5 million of net assets of
Platinum US consisting of cash and cash equivalents (which reflect
a dividend of $15 million to be paid, prior to the completion of
the Public Offering, to United States Fidelity and Guaranty
Company, the current parent of Platinum US) as well as
approximately $7 million of tangible assets and other intangible
assets such as broker and customer lists and contract renewal
rights and licenses;

- amounts reflecting the receipt of approximately $120 million,
representing the estimated net proceeds from the ESU Offering and
recognition of the present value of future contract adjustment
payments payable on the purchase contracts contained within the
equity security units, without giving effect to any exercise of
the underwriters' option to purchase additional equity security
units. It is further assumed that the net proceeds from the ESU
Offering will be invested in long-term, taxable fixed income
securities; and

EX-2.1 110th Page of 301 TOC 1st Previous Next ↓Bottom Just 110th
- amounts reflecting Platinum entering into the Quota Share
Retrocession Agreements with St. Paul Re reinsuring the Assumed
Reinsurance Contracts as of June 30, 2002.

[Download Table]

AT JUNE 30, 2002
-----------------------
($ IN MILLIONS, EXCEPT
PER SHARE AMOUNT)

Cash and invested assets................................... $ 1,168
Deferred acquisition costs................................. 25
Funds held by reinsured.................................... 40
Other assets(1)............................................ 19
------------
Total assets............................................ $ 1,252
============
Unpaid losses and loss adjustment expense reserves......... $ 109
Unearned premium reserves.................................. 140
Debt obligations(2)........................................ 125
Financial reinsurance liabilities.......................... 17
Other liabilities(1)(3).................................... 12
Total shareholders' equity(3).............................. 849
------------
Total liabilities and shareholders' equity(3).............. $ 1,252
============
Book value per Common Share(1)(3)(4)....................... $ 21.24

------------------------
(1) Reflects Platinum entering into, and accruing for, the Services and
Capacity Reservation Agreement as of June 30, 2002.

(2) Reflects senior notes issued in connection with the ESU Offering.

(3) Reflects the present value of the contract adjustment payments in
connection with the ESU Offering.

(4) Reflects the issuance of 40,000,000 Common Shares in the Public
Offering, the St. Paul Investment and the RenaissanceRe Investment.

EX-2.1 111th Page of 301 TOC 1st Previous Next ↓Bottom Just 111th
PRO FORMA COMBINED UNDERWRITING RESULTS

We have prepared our unaudited pro forma combined statements of
underwriting results to represent our reinsurance business as if we had
commenced our operations and the Public Offering, the ESU Offering, the St. Paul
Investment and the RenaissanceRe Investment had been completed as of January 1,
2001. Our presentation of our pro forma underwriting results assumes that all of
the Inception Agreements were entered into as of January 1, 2001. We have based
our presentation on St. Paul Re's actual underwriting results for the periods
presented. We have then adjusted these historical results to remove any of St.
Paul Re's reinsurance businesses that will not be part of Platinum following the
completion of the Public Offering, including

- amounts related to St. Paul Re's reinsurance business representing
lines of business that will not be transferred to Platinum,
including aviation and bond and credit reinsurance, certain
financial risk and capital markets reinsurance products, and certain
North American business previously underwritten in London. Platinum
will not obtain the renewal rights to these lines of business and
will not assume liabilities related to these lines of business, and
Platinum's management does not intend to write these lines of
business in the future, and

- amounts related to St. Paul Re's allocations from the St. Paul
corporate aggregate excess-of-loss reinsurance programs that will
not be available to Platinum.

Except as noted above, the pro forma combined underwriting results
assume that all other retrocessional reinsurance with respect to the Assumed
Reinsurance Contracts entered into in 2002 and prior years will remain available
to Platinum.

Also, as noted above, we have based our pro forma underwriting results
on the assumption that all of the Inception Agreements were entered into on
January 1, 2001, including the Services and Capacity Reservation Agreement.

Our future results will depend in part on the amount of our investment
income, which cannot be predicted and which will fluctuate depending upon the
types of investments we select, our underwriting results and market factors.
Actual tax expense in future periods will be based on underwriting results plus
investment income and other income and expense items not reflected in the pro
forma combined underwriting results. Our effective tax rate will reflect the
proportion of income recognized by our operating subsidiaries, with Platinum US
taxed at the U.S. corporate income tax rate (35%), Platinum UK taxed at the U.K.
corporate tax rate (generally 30%), Platinum Ireland taxed at the Irish
corporate tax rate (25% on non-trading income and 16% on trading income, the
latter rate to be reduced to 12.5% as of January 1, 2003), and Platinum Bermuda
taxed at a zero corporate tax rate. In 2002, we expect to have a greater portion
of our income subject to U.S. taxation and U.K. taxation than we expect to have
in the future because our Bermuda operations are entirely new but can be
expected to grow as a proportion of our business. As a result of changes in the
geographic distribution of taxable income as well as changes in the amount of
our non-taxable income and expense, the relationship between our reported income
before tax and our income tax expense may change significantly from one period
to the next.

EX-2.1 112th Page of 301 TOC 1st Previous Next ↓Bottom Just 112th
[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
---------------------------------- DECEMBER 31,
2002 2001 2001
-------- -------- ------------
($ IN MILLIONS)

NET PREMIUMS EARNED
Net premiums written............................. $ 602 $ 576 $ 1,382
Change in unearned premiums, net................. (29) (88) (80)
-------- -------- ------------
Net premiums earned............................. 573 488 1,302
LOSSES AND UNDERWRITING EXPENSES
Losses and loss adjustment expenses.............. 350 344 1,440
Policy acquisition expenses...................... 144 149 237
Other underwriting expenses...................... 34 37 69
-------- -------- ------------
Total underwriting losses and expenses.......... $ 528 $ 530 1,746
-------- -------- ------------
UNDERWRITING GAIN (LOSS)......................... $ 45 $ (42) $ (444)
======== ======== ============
SELECTED RATIOS - U.S. GAAP
Loss and loss adjustment expense ratio........... 61.2% 70.6% 110.6%
Underwriting expense ratio....................... 31.1% 38.1% 23.5%
-------- -------- ------------
Combined ratio.................................. 92.3% 108.7% 134.1%
======== ======== ============
SELECTED RATIOS - STATUTORY
Loss and loss adjustment expense ratio........... 61.2% 70.6% 110.6%
Underwriting expense ratio....................... 29.6% 32.3% 22.1%
-------- -------- ------------
Combined ratio.................................. 90.8% 102.9% 132.7%
======== ======== ============
Impact of catastrophes on combined ratio (1)... (3.0)% 3.7% 40.9%
======== ========= ============

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

(1) Excludes ceded losses under St. Paul Re's aggregate excess-of-loss
treaties, because such treaties extend to non-catastrophic as well as
catastrophic losses as described below. The 3% benefit from
catastrophes on the June 30, 2002 combined ratio is driven by a lack of
catastrophes in the first six months of 2002 and favorable loss
development in 2002 on catastrophe losses incurred in prior years.

Included in the 2001 pro forma combined underwriting results are
pre-tax losses related to the September 11, 2001 terrorist attack totaling $468
million. This amount includes gross losses and loss adjustment expenses of $819
million, $123 million of ceded reinsurance, $137 million of additional and
reinstatement premiums and $91 million of reduced contingent commission
expenses. The determination of the impact of catastrophes on the combined ratio
(which is a combination of the expense ratio and the loss ratio) excludes the
ceded losses under St. Paul Re's aggregate excess-of-loss treaties; these
treaties provide coverage for excess losses arising from catastrophic and
non-catastrophic events. The benefits of St. Paul Re's aggregate excess-of-loss
treaty for 2002 will remain available to Platinum for the balance of 2002 unless
earlier terminated pursuant to its terms.

EX-2.1 113th Page of 301 TOC 1st Previous Next ↓Bottom Just 113th
PRO FORMA UNDERWRITING RESULTS BY OPERATING SEGMENT

The following provides a summary of the pro forma underwriting results
for our three operating segments. To provide a more meaningful indication of the
underlying performance of our business segments, the results exclude the impact
of St. Paul Re's aggregate excess-of-loss treaties and the impact of the
September 11, 2001 terrorist attack.

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
----------------------------------- DECEMBER 31,
2002 2001 2001
-------- --------- ------------
($ IN MILLIONS)

NET PREMIUMS WRITTEN
Global Property and Marine......................... $ 215 $ 196 $ 356
Global Casualty.................................... 248 288 611
Finite Risk........................................ 146 129 365
-------- --------- ------------
Total............................................ $ 609 $ 613 $ 1,332
UNDERWRITING GAIN (LOSS)
Global Property and Marine......................... $ 64 $ 11 $ 62
Global Casualty.................................... (29) (89) (119)
Finite Risk........................................ 30 (6) (26)
-------- --------- ------------
Total............................................ $ 65 $ (84) $ (83)
COMBINED RATIO
Global Property and Marine......................... 65.8% 93.1% 82.4%
Global Casualty.................................... 112.3% 138.1% 122.1%
Finite Risk........................................ 78.9% 104.8% 107.1%
-------- --------- ------------
Total............................................ 88.7% 116.0% 106.6%
======== ========= ============

EX-2.1 114th Page of 301 TOC 1st Previous Next ↓Bottom Just 114th
RISK FACTORS

Before investing in our Common Shares, you must carefully consider the
following risk factors. These risks could materially affect our business,
results of operations or financial condition and cause the trading price of the
Common Shares to decline. You could lose part or all of your investment.

RISKS RELATED TO OUR BUSINESS

IF WE ARE UNABLE TO IMPLEMENT OUR BUSINESS STRATEGY OR OPERATE OUR
BUSINESS AS WE CURRENTLY EXPECT, OUR RESULTS MAY BE ADVERSELY AFFECTED.

Platinum Holdings, Platinum UK, Platinum Bermuda, Platinum Ireland and
Platinum Finance were recently formed. Platinum US, a wholly owned subsidiary of
St. Paul, has been in existence since 1995 as an inactive insurance company.
None of these companies has any operating history. Businesses, such as ours,
which are starting up or in their initial stages of development present
substantial business and financial risks and may suffer significant losses. We
must develop business relations, establish operating procedures, hire staff,
obtain facilities, implement new systems, obtain licenses and complete other
tasks appropriate for the conduct of our intended business activities. If we are
unable to implement these actions to operate our business as we currently
expect, our results may be adversely affected. As a result of industry factors
or factors specific to Platinum, we may have to alter our anticipated methods of
conducting our business, such as the nature, amount and types of risks we
assume.

WE MAY NOT BE ABLE TO SUCCESSFULLY CONTINUE THE BUSINESS BEING
CONTRIBUTED BY ST. PAUL RE BECAUSE WE DO NOT HAVE ST. PAUL'S
ESTABLISHED NAME RECOGNITION AND CAPITAL BASE.

Although we anticipate commencing our operations with an existing
reinsurance business, including renewal opportunities, broker and cedent
relationships, a workforce and other tangible and intangible assets that are
being contributed by St. Paul Re, we may not be able to successfully continue
this business. We will not have any of the benefits which may have flowed to the
business from being affiliated with St. Paul, including its name recognition,
its reputation in the industry and its strong capital base. In addition, we will
not have certain offices that produced 2002 business but that were closed in
late 2001 and early 2002. It is possible that clients of St. Paul Re will choose
not to renew expiring contracts with us and will choose to reinsure with our
competitors. It is possible that cedents will choose to not do business with us
because we will have a smaller capital base or lower ratings than St. Paul has
or because the cedents' credit approval committees will not approve doing
business with us. It is possible that clients that do renew expiring contracts
with us may demand policy terms that are less favorable to us or may renew only
with reduced coverage limits. In addition, certain of the Assumed Reinsurance
Contracts afford the reinsured party a right to cancel coverage upon transfer of
the Transferred Business to us. While we expect that few, if any, cancellations
will occur, substantial cancellations would adversely affect our future results
of operations, particularly in the near-term. We may not be able to maintain the
broker relationships established by St. Paul Re, or retain those employees of
St. Paul Re who are expected to join us upon completion of the Public Offering.
We may not be able to build upon this base of business or operate our business
as successfully as St. Paul Re. It is also possible that the restructuring of
St. Paul Re that St. Paul initiated in December 2001 and the Public Offering may
adversely affect our ability to maintain the St. Paul Re business that is being
transferred to us.

EX-2.1 115th Page of 301 TOC 1st Previous Next ↓Bottom Just 115th
NEITHER OUR PRO FORMA FINANCIAL INFORMATION NOR THE HISTORICAL COMBINED
FINANCIAL INFORMATION OF ST. PAUL RE IN THIS PROSPECTUS IS AN INDICATOR
OF OUR FUTURE ACTUAL RESULTS.

As a newly formed company, we have no actual results of operations. We
are, therefore, presenting in this prospectus our pro forma financial
information with respect to the reinsurance business which St. Paul will be
transferring to us, as if the Public Offering, the ESU Offering, the St. Paul
Investment and the RenaissanceRe Investment had been completed and we had
commenced our operations as of January 1, 2001. We are also presenting
historical combined financial information of St. Paul Re to illustrate the
underwriting results of our actual historical reinsurance business.

We caution that our pro forma financial information and the historical
combined financial information of St. Paul Re presented in this prospectus are
not necessarily comparable with or indicative of the actual results that we
expect to achieve once we commence operations for the reasons set forth below:

- Platinum's pro forma combined statement of underwriting results
includes premium and loss development on business entered into
prior to January 1, 2002. Under the Quota Share Retrocession
Agreements, we are assuming no premium or loss development on
business entered into prior to January 1, 2002. Therefore, our
reported premiums written and earned and reported losses and loss
adjustment expenses in our initial years of operation could be
substantially lower than as presented in Platinum's pro forma
combined statement of underwriting results. As such, our reported
results in our initial years of operation will not be subject to
prior year development for periods prior to January 1, 2002.

- The additional and reinstatement premiums recorded in 2001 by St.
Paul Re's Finite Risk operating segment were primarily caused by
losses relating to the September 11, 2001 terrorist attack. These
additional and reinstatement premiums were unusually high and not
necessarily indicative of the recurring premium volume we expect
to write in that business segment.

EX-2.1 116th Page of 301 TOC 1st Previous Next ↓Bottom Just 116th
- Platinum's pro forma financial statements continue to reflect the
discounting of the liability for certain Assumed Reinsurance
Contracts based on our current intention to make arrangements to
permit such discounting. If we do not put such arrangements in
place, reinsurance contracts of a similar type entered into in the
future would be reported on an un-discounted basis.

Our future consolidated financial results will also depend on the
amount of our investment income, which cannot be predicted and which will
fluctuate depending upon the types of investments we select, our underwriting
results and market factors, such as the level of interest rates, as well as our
consolidated effective tax rate.

INTENSE COMPETITION COULD ADVERSELY AFFECT OUR PROFITABILITY.

The property and casualty reinsurance industry is highly competitive
and, except for regulatory considerations, there are relatively few barriers to
entry. We will compete with major U.S. and non-U.S. reinsurers, including
several Bermuda-based reinsurers that write property and casualty reinsurance
and that target the same market as we do and utilize similar business
strategies.

In addition to reinsurance company competitors, other financial
institutions are now able to offer services similar to those that we expect to
offer. Financial institutions have also created alternative capital market
products that compete with reinsurance products, such as reinsurance
securitization. Such alternative products may be perceived to be more beneficial
for ceding companies than reinsurance offered by reinsurance companies and may
result in lower demand for certain of our products.

Since we have no operating history, many of our competitors have
greater name and brand recognition than we currently do. Many of them also have
more (in some cases substantially more) capital and greater marketing and
management resources than we expect to have, and may offer a broader range of
products and more competitive pricing than we expect to or will be able to
offer.

Our competitive position will be based on many factors, including our
perceived overall financial strength, ratings assigned by independent rating
agencies, geographic scope of business, client relationships, premiums charged,
contract terms and conditions, products and services offered (including the
ability to design customized programs), speed of claims payment, reputation,
experience and qualifications of employees and local presence. Since we have not
yet commenced operations, we may not be able to compete successfully on any of
these bases. If competition limits our ability to write new business at adequate
rates, our return on capital may be adversely affected.

THE SEPTEMBER 11, 2001 TERRORIST ATTACK HAS GENERATED SUBSTANTIAL NEW
CAPITAL INFLOWS INTO THE REINSURANCE INDUSTRY, INCREASING COMPETITION
WHICH COULD ADVERSELY AFFECT OUR PROFITABILITY.

Following the terrorist attack of September 11, 2001, a number of new
reinsurers and other entities have been formed and a number of existing market
participants have raised new capital in an effort to participate in an improving
marketplace. These new and better financed companies are expected to increase
the level of competition in the industry, which may affect our competitive
position. While we believe that we and our competitors will be able to raise
premium rates in the near and intermediate term, the additional competition
following the September 11, 2001 terrorist attack may limit such increases or
result in decreases in premium rates.

EX-2.1 117th Page of 301 TOC 1st Previous Next ↓Bottom Just 117th
WE ARE NOT YET RATED BY A.M. BEST AND THIS COULD AFFECT OUR COMPETITIVE
POSITION WITH CUSTOMERS.

Competition in the types of reinsurance business that we intend to
underwrite is based on many factors, including the perceived financial strength
of the reinsurer and ratings assigned by independent rating agencies. A.M. Best
Company, Inc. ("Best's") is generally considered to be a significant rating
agency with respect to the evaluation of insurance and reinsurance companies.
Best's ratings are based on a quantitative evaluation of performance with
respect to profitability, leverage and liquidity and a qualitative evaluation of
spread of risk, reinsurance program, investments, reserves and management.
Insurance ratings are used by insurers and reinsurance intermediaries as an
important means of assessing the financial strength and quality of reinsurers.
In addition, a ceding company's own rating may be adversely affected by the lack
of a rating of its reinsurer. Therefore, the lack of a rating may dissuade a
ceding company from reinsuring with us and may influence a ceding company to
reinsure with a competitor of ours that has an insurance rating.

Our management has met with Best's, which has advised us that it
expects to assign an initial financial strength rating of "A" (Excellent) to our
operating subsidiaries upon the completion of the Public Offering and the
receipt of the offering proceeds in line with certain representations we made to
Best's. In addition, the rating assignment is contingent upon the funding of our
operating subsidiaries to the levels indicated by our management as well as the
execution of all pertinent transactions as detailed by this prospectus. The
rating assignment further contemplates the initiation of certain capital support
agreements between Platinum Holdings and its operating subsidiaries.

However, we may not obtain the "A" rating if we do not receive a
sufficient amount of proceeds from the Public Offering in order to capitalize
our operating subsidiaries at the levels we indicated to Best's, execute the
transactions described in this prospectus or otherwise satisfy the conditions
set by Best's for the assignment to us of such a rating.

CONSOLIDATION IN THE INSURANCE INDUSTRY COULD LEAD TO LOWER MARGINS FOR
US AND LESS DEMAND FOR OUR REINSURANCE PRODUCTS AND SERVICES.

The insurance industry is undergoing a process of consolidation as
industry participants seek to enhance their product and geographic reach, client
base, operating efficiency and general market power through merger and
acquisition activities. These larger entities may seek to use the benefits of
consolidation to, among other things, implement price reductions for their
products and services. If competitive pressures compel us to reduce our prices,
our operating margins would decrease.

As the insurance industry consolidates, competition for customers may
become more intense and the importance of acquiring and properly servicing each
customer will become greater. We could incur greater expenses relating to
customer acquisition and retention, which could reduce our operating margins. In
addition, insurance companies that merge may be able to enhance their
negotiating position when buying reinsurance and may be able to spread their
risks across a consolidated, larger capital base so that they require less
reinsurance.

WE ARE DEPENDENT ON KEY EXECUTIVES.

Our success will depend in substantial part upon the continued service
of Steven H. Newman as our Chairman of the Board of Directors and Jerome T.
Fadden as our President and Chief Executive Officer. Mr. Fadden's employment
contract will expire on March 4, 2007 unless extended. Mr. Newman will serve as
a consultant to Platinum US through March 1, 2005 unless his consulting contract
is extended. Our success will also depend on our ability to attract and retain
additional

EX-2.1 118th Page of 301 TOC 1st Previous Next ↓Bottom Just 118th
executives and underwriting personnel. We believe that there are only a limited
number of available, qualified executives in the reinsurance industry, and our
inability to hire additional senior executives or the loss of the services of
any of our senior executives could delay or prevent us from fully implementing
our business strategy and could significantly and negatively affect our
business.

Under Bermuda law, non-Bermudians (other than spouses of Bermudians)
may not engage in any gainful occupation in Bermuda without a work permit. None
of our executive officers is a Bermudian, and all such officers will be working
in Bermuda under work permits. Mr. Fadden has obtained a temporary work permit,
and we are seeking longer-term work permits from the Bermuda authorities for him
as well as for Michael E. Lombardozzi, William A. Robbie and any other persons
who will be employees of Platinum Holdings or Platinum Bermuda who are not
Bermuda citizens. The Bermuda government recently announced a new policy that
places a six-year term limit on individuals with work permits, subject to
certain exemptions for key employees. It is possible that we could lose the
services of one or more of these people if we are unable to obtain or renew
their work permits, which could significantly and adversely affect our business.

THE OCCURRENCE OF SEVERE CATASTROPHIC EVENTS MAY HAVE A MATERIAL
ADVERSE EFFECT ON OUR FINANCIAL RESULTS AND FINANCIAL CONDITION.

Because we intend to underwrite property and casualty reinsurance and
will have large aggregate exposures to natural and man-made disasters, we expect
that our loss experience generally will include infrequent events of great
severity. The frequency and severity of catastrophe losses are inherently
unpredictable. Consequently, the occurrence of losses from catastrophic events
is likely to cause a material adverse effect on our results of operations and
financial condition. For example, St. Paul Re recorded pre-tax catastrophe
losses of $135 million in 2000 and $143 million in 1999, materially impacting
its results of operations during those years. In addition, catastrophes are an
inherent risk of our business and a catastrophe or series of catastrophes can be
expected to have a material adverse effect on our ability to write new business,
and our financial condition and results of operations, possibly to the extent of
eliminating our shareholders' equity and statutory surplus (which is the amount
remaining after all liabilities, including loss reserves, are subtracted from
all admitted assets, as determined under statutory accounting principles, which
are the principles prescribed or permitted by U.S. insurance regulatory
authorities). Increases in the values and geographic concentrations of insured
property and the effects of inflation have historically resulted in increased
severity of industry losses in recent years and we expect that those factors
will increase the severity of catastrophe losses in the future.

Under the Quota Share Retrocession Agreements, St. Paul retains
underwriting gain or loss with respect to the Assumed Reinsurance Contracts for
the period from January 1, 2002 to the transfer date, which is 12:01 a.m. on the
day immediately following the date of completion of the Public Offering. In
addition, St. Paul will retain all liabilities relating to the flooding in
Europe in August 2002. With respect to "named storms" (which are any tropical
cyclones assigned a name by the National Hurricane Center), in existence at the
time of the completion of the Public Offering which cause insured damage within
ten days subsequent to such time, we will bear losses of up to $25 million in
the aggregate, net of recoveries from the retrocessional reinsurance purchased
by St. Paul that inures to our benefit. St. Paul will bear losses in respect of
such storms that are, in the aggregate, and net of recoveries, subject to
specified exceptions, from such retrocessional reinsurance, in excess of $25
million up to $50 million. We also will bear all losses, in the aggregate and
net of recoveries from such retrocessional reinsurance, in excess of $50 million
in respect of such storms. We have purchased third party retrocessional coverage
in an amount up to $100 million for losses in excess of $50 million, in the
aggregate, net of inuring retrocessions, with respect to damage that occurs
during the 15-day period beginning at 12:01 a.m. on the later of the day of
pricing of the Public Offering or October 21, 2002, as a result of named storms
in existence

EX-2.1 119th Page of 301 TOC 1st Previous Next ↓Bottom Just 119th
at that time but not yet in existence as of October 10, 2002. We will bear $2.5
million of the cost of this coverage, with St. Paul bearing the remainder of its
cost.

Accordingly, St. Paul retains underwriting losses, if any, with respect
to catastrophes arising before the transfer date to the extent reserves are
established therefor as of such date (as determined 90 days after such date).
Platinum bears all underwriting loss from catastrophes occurring on or after the
transfer date (other than the intermediate $25 million layer of coverage borne
by St. Paul with respect to specified named storms, on the terms described
above), and any underwriting loss or gain resulting from reestimation of
catastrophe losses established by St. Paul as of the transfer date (other than
with respect to the August 2002 European floods and the intermediate $25 million
layer of coverage borne by St. Paul with respect to specified named storms, on
the terms described above). Under the Quota Share Retrocession Agreements,
premiums attributable to policy periods prior to the transfer date and with
respect to flooding in Europe in August 2002 are retained by St. Paul, and
premiums attributable to periods on or following the transfer date are for
Platinum's benefit. Consistent with St. Paul's accounting practices, St. Paul
and Platinum intend to allocate 2002 premiums attributable to catastrophe
coverage before and after the transfer date between themselves on a pro rata
basis over the applicable policy period, without adjustment for seasonality that
exists for certain catastrophe losses. Certain catastrophic events, such as
hurricane and windstorm exposure in North America, tend to occur more frequently
in the latter half of the calendar year. Accordingly, Platinum's premium income
attributable to certain catastrophe coverages and earned in the period following
the time of effectiveness of the Quota Share Retrocession Agreements may not,
due to seasonality among other factors, sufficiently match Platinum's exposure
to losses from certain catastrophic events which may occur in the remaining part
of 2002. As of the day prior to the date of this preliminary prospectus, there
was one "named storm", which could cause us to be liable for substantial
catastrophic losses immediately following the completion of the Public Offering
despite the sharing arrangement with St. Paul, and such number of "named storms"
could increase or decrease prior to the date of the final prospectus for this
Public Offering or the completion of the Public Offering itself.

THE SEPTEMBER 11, 2001 TERRORIST ATTACK MAY RESULT IN GOVERNMENT
INTERVENTION IMPACTING THE INSURANCE AND REINSURANCE MARKETS.

In response to the tightening of supply in certain insurance markets
resulting from, among other things, the terrorist attack of September 11, 2001,
the U.S. government and other governments may intervene in the insurance and
reinsurance markets. Following the September 11, 2001 terrorist attack, various
proposed legislation that is designed to ensure the availability of insurance
coverage for terrorist acts has been introduced in the U.S. Congress.
Legislation has been adopted in the U.S. House of Representatives designed,
among other things, to provide federal government loans over a short-term period
to commercial insurers and reinsurers for funding losses arising from terrorist
acts against U.S. properties, which loans would be repaid through industry
assessments and, if losses exceed a threshold, policyholder assessments.
Similar, alternative legislation has been adopted in the U.S. Senate; the Senate
legislation provides for direct government assistance to commercial insurers and
reinsurers for covered losses that exceed a per-company "deductible." We cannot
predict whether any such legislation will be enacted or what form it may take.
You should note that governmental intervention could significantly and adversely
affect us by, among other things:

- providing competing insurance and reinsurance capacity in the
markets and to the customers we expect to target;

- regulating the terms of insurance and reinsurance capacity and
reinsurance policies in a manner that could significantly and
adversely affect us, directly or indirectly, by requiring

EX-2.1 120th Page of 301 TOC 1st Previous Next ↓Bottom Just 120th
coverage for terrorist acts to be offered by insurers and
reinsurers, benefiting our competitors, reducing the demand for
our products or benefiting insurers as compared to reinsurers
such as ourselves;

- providing sources of liquidity to U.S. companies that may not be
available to our non-U.S. subsidiaries; or

- otherwise disproportionally benefiting U.S. or other foreign
countries' companies over Bermuda-based companies such as Platinum
Holdings and its Bermuda subsidiary.

THE SEPTEMBER 11, 2001 TERRORIST ATTACK HAS CAUSED UNCERTAINTY AS TO
FUTURE INSURANCE AND REINSURANCE COVERAGE FOR TERRORIST ACTS, AND WE
MAY IN THE FUTURE HAVE SUBSTANTIAL EXPOSURE TO SUCH ACTS.

Following the terrorist attack of September 11, 2001, there is
uncertainty in the insurance and reinsurance markets about the extent to which
future coverages will extend to terrorist acts. There is also uncertainty about
the definition of terrorist acts. We believe that coverage of claims that are
the result of terrorist acts (as they are ultimately defined by industry and
government standards) will generally be excluded from property catastrophe
reinsurance contracts covering large commercial risks above specified property
values, but generally will not be excluded for smaller commercial coverages,
personal lines written for individuals or families or other coverages.
Accordingly, we presently continue to incur exposure to terrorist acts. The
extent to which coverage for terrorist acts will be offered by the insurance and
reinsurance markets in the future is uncertain. Coverage for losses resulting
from terrorist acts may be offered separately in the reinsurance market, and we
may or may not offer such coverage in the future. If our and the insurance
industry's attempts to exclude terrorist acts from contracts covering large
commercial risks that exceed specified values were to fail, we could incur large
unexpected losses if further terrorist attacks occur.

THE FAILURE TO BE EFFECTIVE OF ANY OF THE LOSS LIMITATION METHODS WE
EMPLOY COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION
OR OUR RESULTS OF OPERATIONS.

Our property and casualty reinsurance contracts cover unpredictable
events such as hurricanes, windstorms, hailstorms, earthquakes, volcanic
eruptions, fires, industrial explosions, freezes, riots, floods and other
natural or man-made disasters. We intend to seek to limit our loss exposure by
writing the majority of our products on an excess-of-loss basis. We also intend
to limit the aggregate amount of all treaties for each client and to execute
prudent underwriting of each program written. In the case of treaties where we
reinsure a proportionate part of premiums and losses, which are referred to as
pro rata or proportional treaties, we intend to seek per occurrence limitations
or caps on the ratio of losses to premiums, which are referred to as loss cap
ratios, to limit the impact of losses from any one event. A limited number of
the Assumed Reinsurance Contracts do not contain these limits, which means that
there is no contractual limit to the losses that we may be required to pay
pursuant to such Assumed Reinsurance Contracts. In addition, we intend to seek
to limit our loss exposure by geographic diversification. Geographic zone
limitations involve significant underwriting judgments, including the
specification of the areas constituting the zones and the inclusion of a
particular policy within a particular zone's limits. Various provisions of our
policies, such as limitations or exclusions from coverage or choice of forum,
may not be enforceable in the manner we intend, due to, among other things,
disputes relating to coverage and choice of legal forum. Underwriting is a
matter of judgment, involving important assumptions about matters that are
inherently unpredictable and beyond our control, and for which historical
experience and probability analysis may not provide sufficient guidance. One or
more catastrophic or other events could result in claims that substantially
exceed our expectations, which could have a material adverse effect on our
financial condition or our results of operations, possibly to the extent of
eliminating our shareholders' equity and statutory surplus. St. Paul Re recorded
net pretax

EX-2.1 121st Page of 301 TOC 1st Previous Next ↓Bottom Just 121st
losses of $556 million as a result of the September 11, 2001 terrorist attack,
the most significant catastrophe to date for the property-casualty insurance
industry. Contributing to the significance of these losses were certain
contracts having occurrence limits that excluded natural perils but not man-made
disasters. Had these occurrence limits excluded man-made disasters, St. Paul
Re's losses would have been approximately $25 million lower.

WE INTEND TO PURCHASE RETROCESSIONAL REINSURANCE, WHICH WILL SUBJECT US
TO CREDIT RISK AND MAY BECOME UNAVAILABLE ON ACCEPTABLE TERMS.

In order to limit the effect on our financial condition of large and
multiple losses, we intend to buy retrocessional reinsurance, which is
reinsurance for our own account. From time to time, market conditions have
limited, and in some cases have prevented, insurers and reinsurers from
obtaining the types and amounts of reinsurance which they consider adequate for
their business needs. As a result of the September 11, 2001 terrorist attack,
both pricing and terms have become more severe in the retrocessional reinsurance
market, which may limit our ability to obtain desired amounts of retrocessional
reinsurance at acceptable pricing. If we are unable to obtain retrocessional
reinsurance, our financial position and results of operations may be materially
adversely affected. Moreover, the September 11, 2001 terrorist attack, threats
of further terrorist attacks and the military initiatives and political unrest
in Afghanistan, the Middle East and the surrounding regions have adversely
affected general economic, market and political conditions, increasing many of
the risks of our business. Over time, the rating agencies could re-examine the
ratings affecting our industry. We may not be able to obtain our desired amounts
of retrocessional reinsurance on acceptable terms. St. Paul Re had
retrocessional arrangements through St. Paul, and we may not be able to obtain
replacement agreements. Even if we are able to obtain such retrocessional
reinsurance, we may not be able to negotiate terms as favorable to us as the
terms that St. Paul Re was able to obtain through St. Paul in prior years. Loss
of all or portions of our retrocessional coverage could subject us to increased
exposure, which could be material.

A retrocessionaire's insolvency or its inability or unwillingness to
make payments under the terms of its reinsurance treaty with us could have a
material adverse effect on us. Therefore, our retrocessions subject us to credit
risk because the ceding of risk to retrocessionaires does not relieve a
reinsurer of its liability to the ceding companies.

IF WE ARE REQUIRED TO INCREASE OUR LOSS RESERVES, OUR OPERATING RESULTS
WILL BE ADVERSELY AFFECTED.

At any time, our loss reserves may prove to be inadequate to cover our
actual losses and benefits experience. To the extent loss reserves may be
insufficient to cover actual losses or loss adjustment expenses, we will have to
add to these loss reserves and incur a charge to our earnings, which could have
a material adverse effect on our financial condition, results of underwriting
and cash flows. St. Paul Re has experienced such instances where a re-estimation
of loss reserves has proved to be material and, in 2001, recorded a net
additional provision of $95 million related to losses incurred in prior years.
This provision reflected worse than expected loss emergence in St. Paul Re's
North American Property segment, largely driven by certain property business
underwritten through its London office, and in the surplus lines business. We
could experience adverse development on our loss reserves, including those
initially established by St. Paul Re and transferred to us pursuant to the Quota
Share Retrocession Agreements.

Our loss reserves will not represent an exact calculation of liability,
but rather will be estimates of the expected cost of the ultimate settlement of
losses. We expect that all of our loss reserve estimates will be based on
actuarial and statistical projections at a given time, of facts and
circumstances known at that time and estimates of trends in loss severity and
other variable factors,

EX-2.1 122nd Page of 301 TOC 1st Previous Next ↓Bottom Just 122nd
including new concepts of liability and general economic conditions. Changes in
these trends or other variable factors could result in claims in excess of our
loss reserves.

Unforeseen losses, the type or magnitude of which we cannot predict,
may emerge in the future. These additional losses could arise from changes in
the legal environment, catastrophic events, extraordinary events affecting our
clients such as reorganizations and liquidations or changes in general economic
conditions.

In addition, because we, like other reinsurers, will not separately
evaluate each of the individual risks assumed under reinsurance treaties, we
will be largely dependent on the original underwriting decisions made by ceding
companies. We will be subject to the risk that our ceding companies may not have
adequately evaluated the risks to be reinsured and that the premiums ceded to us
may not adequately compensate us for the risks we assume.

Under U.S. GAAP, Platinum US, Platinum UK and Platinum Bermuda will not
be permitted to establish loss reserves until an event occurs which may give
rise to a loss. Once such an event occurs, reserves will be established based
upon estimates of the total losses incurred by the ceding insurers and an
estimate of the portion of such loss our three operating subsidiaries have
reinsured. As a result, only loss reserves applicable to losses incurred up to
the reporting date may be set aside, with no allowance for the provision of a
contingency reserve to account for expected future losses. Losses arising from
future events will be estimated and recognized at the time the loss is incurred
and could be substantial.

THE PROPERTY AND CASUALTY REINSURANCE BUSINESS IS HISTORICALLY
CYCLICAL, AND WE EXPECT TO EXPERIENCE PERIODS WITH EXCESS UNDERWRITING
CAPACITY AND UNFAVORABLE PRICING.

Historically, property and casualty reinsurers have experienced
significant fluctuations in operating results. Demand for reinsurance is
influenced significantly by underwriting results of primary insurers and
prevailing general economic and market conditions, all of which affect cedents'
decisions as to the amount or portion of risk that they retain for their own
accounts and consequently reinsurance premium rates. The supply of reinsurance
is related to prevailing prices, the levels of insured losses and levels of
industry surplus which, in turn, may fluctuate in response to changes in rates
of return on investments being earned in the reinsurance industry. As a result,
the property and casualty reinsurance business historically has been a cyclical
industry characterized by periods of intense price competition due to excessive
underwriting capacity as well as periods when shortages of capacity permitted
favorable premium levels. We can expect to experience the effects of such
cyclicality.

The cyclical trends in the industry and the industry's profitability
can also be affected significantly by volatile and unpredictable developments,
including what management believes to be a trend of courts to grant increasingly
larger awards for certain damages, natural disasters (such as catastrophic
hurricanes, windstorms, tornadoes, earthquakes and floods), fluctuations in
interest rates, changes in the investment environment that affect market prices
of and income and returns on investments and inflationary pressures that may
tend to affect the size of losses experienced by primary insurance companies.
Although market conditions have improved recently with respect to some lines of
property and casualty reinsurance, we cannot predict whether market conditions
will continue to improve, remain constant or deteriorate. A return to negative
market conditions may affect our ability to write reinsurance at rates that we
consider appropriate relative to the risk assumed. If we cannot write property
and casualty reinsurance at appropriate rates, our ability to transact
reinsurance business would be significantly and adversely affected.

EX-2.1 123rd Page of 301 TOC 1st Previous Next ↓Bottom Just 123rd
A SIGNIFICANT AMOUNT OF OUR INVESTED ASSETS WILL BE SUBJECT TO MARKET
VOLATILITY.

Our investment portfolio will consist initially of fixed income
securities and, in the future, may include marketable equity securities. The
fair market value of these assets and the investment income from these assets
will fluctuate depending on general economic and market conditions. Fixed income
and equity markets have become increasingly volatile in the last year and
particularly since the events of September 11, 2001. Because substantially all
of our invested assets will be classified as available for sale, changes in the
market value of our securities will be reflected in our consolidated balance
sheet. In addition, market fluctuations and market volatility will affect the
value of our investment portfolio and could adversely affect our liquidity.

INCREASES IN INTEREST RATES OR FLUCTUATIONS IN CURRENCY EXCHANGE RATES
MAY CAUSE US TO EXPERIENCE LOSSES.

Because of the unpredictable nature of losses that may arise under
reinsurance policies, our liquidity needs can be expected to be substantial and
to arise at any time. The market value of our fixed income investments will be
subject to fluctuation depending on changes in various factors, including
prevailing interest rates. We expect to hedge our investment portfolio against
interest rate risk. Nevertheless, increases in interest rates during periods
when we sell fixed income securities to satisfy liquidity needs may result in
losses.

Our functional currency will be the U.S. dollar. Our operating currency
generally will also be the U.S. dollar. However, the premiums receivable and
losses payable in respect of a portion of our business will be denominated in
currencies of other countries, principally the industrialized countries.
Consequently, we may, from time to time, experience exchange gains and losses
that could affect our financial position and results of operations. We do not
expect to--and as a practical matter will not be able to--hedge our foreign
currency exposure with respect to potential losses until a loss payable in a
foreign currency occurs (after which we may match such liability with assets
denominated in the same currency or enter into forward purchase contracts for
specific currencies). This type of exposure could be substantial. We also do not
intend to hedge our non-U.S. dollar currency exposure with respect to premiums
receivable, which will be generally collected over the relevant contract term.
We expect to exchange non-U.S. dollar denominated premiums upon receipt. We may
make foreign currency denominated investments, generally for the purpose of
improving overall portfolio yield.

PLATINUM UK MAY NOT BE LICENSED IN THE UNITED KINGDOM AT THE TIME OF
COMPLETION OF THE PUBLIC OFFERING, AND ANY LICENSE, IF OBTAINED, MAY BE
SUBJECT TO LIMITATIONS ON PLATINUM UK'S OPERATIONS.

Platinum UK has applied to the Financial Services Authority ("FSA") to
write the business conducted by St. Paul Re in the United Kingdom. Platinum UK
may not be licensed by the FSA at the time of the completion of the Public
Offering. The issuance of the license is at the discretion of the FSA and we may
not be able to obtain such a license. St. Paul Re has agreed that it will
continue to write reinsurance in the United Kingdom, at the direction of
Platinum UK, in cases where we are unable to underwrite that business ourselves
because, despite using our reasonable best efforts, we have not obtained the
necessary regulatory license or approval to do so, until the first anniversary
of the completion of the Public Offering, or until Platinum UK is licensed,
whichever is earlier. Platinum US will reinsure all such business, together with
certain other business written by St. Paul Re UK since January 1, 2002. If
Platinum UK does not obtain a license by the first anniversary of the completion
of the Public Offering, or if the license it obtains contains material
limitations, or if we determine to terminate or significantly reduce our
operations in the U.K., our results of operations could be materially adversely
affected, and we may not be able to conduct our UK operations in the manner
described in this prospectus.

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WE MAY NOT BE ABLE TO SATISFY THE CONDITIONS TO BORROWING UNDER OUR
COMMITTED CREDIT FACILITY, AND FAILURE TO DO SO WOULD LIMIT OUR
LIQUIDITY.

We have entered into a 364 day committed credit facility with a group
of banks that will permit us to make borrowings of up to $100 million in the
aggregate from time to time. The credit facility contains various covenants and
agreements, including a requirement that we satisfy specified tangible net worth
and leverage ratios. It is a condition to our ability to borrow under the credit
facility that we have received not less than $825 million of aggregate proceeds
(net of the underwriters' discount) from the sale of our Common Shares in the
Public Offering, the RenaissanceRe Investment and the Cash Contribution.
Assuming an initial public offering price of $22.00 per Common Share (the low
end of the range stated on the front cover page), a Cash Contribution of $121
million and proceeds of $83 million from the RenaissanceRe Investment, and
assuming no exercise of the underwriters', St. Paul's or RenaissanceRe's options
to purchase additional Common Shares in connection with the Public Offering, we
expect to receive aggregate net proceeds of approximately $829 million from the
Public Offering, the Cash Contribution and the RenaissanceRe Investment. We may
not raise net proceeds in such amount, and if we fail to do so we will be unable
to borrow under the facility. In addition, we may not be able to extend or
replace this credit facility on satisfactory terms when it terminates on June
20, 2003. Failure to satisfy the conditions to borrowing under our credit
facility, or to extend or replace it when it expires, would limit Platinum
Holdings' liquidity to the net proceeds of the Public Offering, the
RenaissanceRe Investment and the Cash Contribution retained by it and dividends,
if any, received from Platinum US, Platinum UK and Platinum Bermuda unless we
arrange for other sources of liquidity.

WE DO NOT YET HAVE IN PLACE A LETTER OF CREDIT FACILITY, AND FAILURE TO
ARRANGE FOR SUCH A FACILITY COULD AFFECT OUR ABILITY TO COMPETE FOR
CERTAIN BUSINESS.

We do not yet have in place a letter of credit facility. Many U.S.
jurisdictions do not permit insurance companies to take credit for reinsurance
obtained from unlicensed or non-admitted insurers on their U.S. statutory
financial statements without appropriate security, which can include a letter of
credit. Platinum UK and Platinum Bermuda will not be licensed in any U.S.
jurisdiction, and Platinum US will not be licensed in certain U.S.
jurisdictions. If we fail to obtain a letter of credit, and are unable to
otherwise provide the necessary security, insurance companies may be less
willing to purchase our reinsurance products than if we had a letter of credit.
If this is the case, there may be a material adverse effect on our results of
operations. If and when we seek to obtain a letter of credit, we may not be able
to obtain one upon terms acceptable to us.

PLATINUM HOLDINGS IS A HOLDING COMPANY AND, CONSEQUENTLY, IT IS
DEPENDENT ON THE PAYMENT OF CASH DIVIDENDS OR THE EXTENSION OF LOANS BY
PLATINUM US, PLATINUM UK AND PLATINUM BERMUDA.

Platinum Holdings is a holding company that will conduct no reinsurance
operations of its own. All operations will be conducted by its wholly-owned
operating subsidiaries, Platinum US, Platinum UK and Platinum Bermuda. As a
holding company, Platinum Holdings' cash flow will consist primarily of
dividends, interest and other permissable payments from its subsidiaries.
Platinum Holdings will depend on such payments to receive funds for general
corporate purposes and to meet its obligations, including the payment of any
dividends to its shareholders. Additionally, under the Bermuda Companies Act
1981, Platinum Holdings may declare or pay a dividend only if, among other
things, it has reasonable grounds for believing that it is, or would after the
payment be, able to pay its liabilities as they become due. For a discussion of
the legal limitations on our subsidiaries' ability to pay dividends to Platinum
Holdings, see "Management's Discussion and Analysis of Pro Forma Financial
Condition and Underwriting Results--Liquidity and Capital
Resources--Restrictions on Dividend Payments from our Operating Subsidiaries"
and "Business--Regulation".

EX-2.1 125th Page of 301 TOC 1st Previous Next ↓Bottom Just 125th
THE REGULATORY SYSTEM UNDER WHICH WE OPERATE, AND POTENTIAL CHANGES
THERETO, COULD SIGNIFICANTLY AND ADVERSELY AFFECT OUR BUSINESS.

Platinum Holdings. As the indirect parent of Platinum US, Platinum
Holdings will be subject to the insurance holding company laws of Maryland,
where Platinum US is organized and domiciled. This law generally requires the
insurance holding company and each insurance company directly or indirectly
owned by the holding company to register with the Maryland Insurance
Commissioner and to furnish annually financial and other information. Generally,
all transactions affecting the insurers in the holding company system must be
fair and, if material, require prior notice and approval or non-disapproval by
the Maryland Insurance Commissioner.

Platinum US. Platinum US is organized and domiciled in Maryland and
licensed, authorized or accredited to write reinsurance in 24 states of the
United States and is seeking licenses in eight additional states. State
insurance laws regulate many aspects of its reinsurance business and state
insurance departments in the licensure states will supervise its reinsurance
operations. Its principal insurance regulatory authority will be the Maryland
Insurance Commissioner. The purpose of the state insurance regulatory statutes
is to protect insureds and ceding insurance companies, not our shareholders.
Among other things, Maryland regulation requires Platinum US to maintain minimum
levels of capital, surplus and liquidity, and imposes restrictions on payment of
dividends and distributions. These statutes and regulations may, in effect,
restrict the ability of Platinum US to write new business or, as indicated
above, distribute funds to Platinum Holdings. In recent years, the state
insurance regulatory framework has come under increased federal scrutiny, and
some state legislators have considered or enacted laws that may alter or
increase state authority to regulate insurance companies and insurance holding
companies. Moreover, the National Association of Insurance Commissioners (NAIC),
which is an association of the senior insurance regulatory officials of all 50
states and the District of Columbia, and state insurance regulators regularly
reexamine existing laws and regulations, interpretations of existing laws and
the development of new laws, which may be more restrictive or may result in
higher costs to us than current statutory requirements.

Platinum UK. As described above, upon completion of the Public
Offering, Platinum UK may not be authorized by the FSA to conduct insurance
business in the U.K. However, if and when Platinum UK becomes an authorized
person, its insurance business will be subject to close supervision by the FSA.

We expect the FSA will take a rigorous and proactive approach to its
supervisory duties. Among other things, the FSA is seeking to strengthen its
requirements for senior management arrangements, systems and controls by
requiring insurance companies to maintain risk management teams, to determine
and document policies for dealing with risks and to demonstrate how combinations
of risks have been aggregated and mitigated. In addition, as part of an
initiative to integrate regulation throughout the financial services sector, the
FSA intends to place an increased emphasis on risk identification and management
in relation to the prudential regulation of insurance businesses in the U.K.

Further, in July 2002 the FSA issued proposals aimed at ensuring
adequate diversification of an insurer's or reinsurer's exposures to reinsurers
(whether intra- or extra-group). The proposals are currently in draft form. If
adopted in their current form, the proposals would limit the extent to which
Platinum UK could reinsure business to Platinum Bermuda, and this could
adversely affect our earnings. Final rules and guidance based on these proposals
are expected to be implemented in 2004. However, substantial compliance with
CP143 in its draft form is likely to be an effective condition for receiving FSA
authorization. See "Business--Our Business--Regulation--U.K.
Regulation--Proposed Limits on Concentration of Reinsurance Exposures".

EX-2.1 126th Page of 301 TOC 1st Previous Next ↓Bottom Just 126th
In addition, given that the framework for supervision of insurance
companies in the U.K. is largely formed by European Union ("EU") directives
(which are implemented by member states through national legislation), changes
at the EU level may affect the regulatory scheme under which Platinum UK
operates. A general review of EU insurance directives is currently in progress
and may lead to changes such as increased minimum capital requirements.

Platinum Bermuda. Platinum Bermuda is a registered Bermuda insurance
company and is subject to regulation and supervision in Bermuda. The applicable
Bermuda statutes and regulations generally are designed to protect insureds and
ceding insurance companies, not our shareholders. Platinum Bermuda is not
registered or licensed as an insurance company in any jurisdiction outside
Bermuda. Platinum Bermuda will conduct its business through its offices in
Bermuda and will not maintain an office, and its personnel will not conduct any
insurance activities in the U.S. or elsewhere. Although Platinum Bermuda does
not believe it will be in violation of insurance laws of any jurisdiction
outside Bermuda, inquiries or challenges to Platinum Bermuda's insurance
activities may still be raised in the future.

Platinum Bermuda may be at a competitive disadvantage in jurisdictions
where it is not licensed, authorized or accredited or does not enjoy an
exemption from licensing. Platinum Bermuda may not be able to obtain any
additional licenses, authorizations or accreditations or may be able to do so
only at great cost. Many U.S. jurisdictions do not permit insurance companies to
take credit for reinsurance obtained from unlicensed or non-admitted insurers on
their U.S. statutory financial statements without appropriate security. We
expect that Platinum Bermuda's reinsurance clients will typically require it to
post a letter of credit or enter into other security arrangements, which will
increase its costs of operations relative to reinsurers not required to do so.
If Platinum Bermuda is unable to obtain a letter of credit facility on
commercially acceptable terms or is unable to arrange for other types of
security, its ability to operate its business may be severely limited.

The offshore insurance and reinsurance regulatory framework recently
has become subject to increased scrutiny in many jurisdictions, including in the
United States and in various states within the United States. In the past, there
have been congressional and other proposals in the United States regarding
increased supervision and regulation of the insurance industry, including
proposals to supervise and regulate reinsurers domiciled outside the United
States. If Platinum Bermuda were to become subject to any insurance laws and
regulations of the United States or any U.S. state, which are generally more
restrictive than those applicable to it in Bermuda, at any time in the future,
it might be required to post deposits or maintain minimum surplus levels and
might be prohibited from engaging in lines of business or from writing specified
types of policies or contracts. Complying with those laws could have a material
adverse effect on our ability to conduct business or our results of operations.

WE WILL BE DEPENDENT ON THE BUSINESS PROVIDED TO US BY REINSURANCE
BROKERS AND WE MAY BE EXPOSED TO LIABILITY FOR BROKERS' FAILURE TO MAKE
PAYMENTS TO CLIENTS FOR THEIR CLAIMS.

We intend to market most of our reinsurance products through
reinsurance brokers. The reinsurance brokerage industry generally, and our
sources of business specifically, are concentrated. On a pro forma basis, based
on net premiums written during the six months ended June 30, 2002, the five
brokers from which St. Paul Re derived the largest portions of its business
(with the approximate percentage of our business derived from such brokers and
their affiliates) are Aon Corporation (25.5%), Marsh & McLennan Companies
(20.9%), Benfield Blanch Inc. (19.6%), Willis Group Holdings (9.4%) and Towers
Perrin (3.0%). Loss of all or a substantial portion of the business provided by
such intermediaries could have a material adverse effect on us. In addition, at
least two of these brokers have announced their intention to form new Bermuda
reinsurance companies that may compete with us, and these brokers may favor
their own reinsurers over other companies, including us.

EX-2.1 127th Page of 301 TOC 1st Previous Next ↓Bottom Just 127th
In accordance with industry practice, we expect to frequently pay
amounts owing in respect of claims under our policies to reinsurance brokers,
for payment over to the ceding insurers. In the event that a broker fails to
make such a payment, depending on the jurisdiction, we may remain liable to the
ceding insurer for the deficiency. Conversely, in certain jurisdictions, when
premiums for such policies are paid to reinsurance brokers for payment over to
us, such premiums will be deemed to have been paid and the ceding insurer will
no longer be liable to us for those amounts whether or not actually received by
us. Consequently, we will assume a degree of credit risk associated with our
brokers during the payment process.

BECAUSE WE ARE DEPENDENT ON CERTAIN CONTRACTUAL RELATIONSHIPS WITH ST.
PAUL, OUR PRINCIPAL SHAREHOLDER, WE MAY EXPERIENCE CONFLICTS OF
INTEREST WITH ST. PAUL THAT MAY BE DETRIMENTAL TO OUR BUSINESS.

Concurrently with the Public Offering, in return for the Cash
Contribution and the contribution of the Transferred Business, we have agreed to
issue 6,000,000 Common Shares to St. Paul and to grant to St. Paul the St. Paul
Option, as described in more detail under "St. Paul Investment, RenaissanceRe
Investment and Principal Shareholders". Following the Public Offering and the
St. Paul Investment, St. Paul will own 15.0% of our Common Shares (which shares
will be limited to 9.9% of the voting power of the outstanding Common Shares),
and will be able, through exercise in full of the St. Paul Option, to increase
its ownership to approximately 26.1% of our Common Shares, assuming no exercise
of the underwriters', St. Paul's or RenaissanceRe's options to purchase
additional Common Shares or of the RenaissanceRe Option. St. Paul has agreed
with us that, prior to any exercise of the St. Paul Option, it will, if
necessary, dispose of a sufficient number of Common Shares so that, immediately
after exercise of the St. Paul Option, St. Paul will not be a "United States 25%
Shareholder" as defined under "Description of Our Common Shares--Restrictions on
Transfer." St. Paul's interest in owning Common Shares may be different from
that of other shareholders.

In connection with our formation, we have agreed with St. Paul and
certain of its affiliates to enter into, among other things, a Formation and
Separation Agreement, Master Services Agreements, Quota Share Retrocession
Agreements, Run-off Services Agreements and Underwriting Management Agreements.
These agreements, which we refer to as the "Inception Agreements", will become
effective upon the completion of the Public Offering (except the Quota Share
Retrocession Agreements which will take effect at 12:01 a.m. on the day
immediately following the date of completion of the Public Offering) and will
govern our relationship with St. Paul with respect to various intercompany
services, which we and St. Paul will provide one another following the
completion of the Public Offering. The terms of the Inception Agreements have
been negotiated between Platinum and St. Paul but do not necessarily reflect
terms that Platinum or St. Paul would agree to with an independent third party.
Notwithstanding these contractual relationships, St. Paul (other than as
restricted by the non-competition provisions of the Formation and Separation
Agreement and of the UK Business Transfer Agreement), and its subsidiaries and
affiliates, may from time to time compete with us, including by assisting or
investing in the formation of other entities engaged in the insurance and
reinsurance businesses. Conflicts of interest could also arise with respect to
business opportunities that could be advantageous to St. Paul and any of its
subsidiaries or affiliates, on the one hand, and us, on the other hand. Other
than as specified in the Inception Agreements, St. Paul is under no obligation
to deal with us on any basis other than arm's length or to treat us as a
"preferred provider" or grant us any other preferential treatment. St. Paul or
its subsidiaries or affiliates have entered, and may enter, into agreements and
maintain relationships with numerous companies that may directly compete with
us.

EX-2.1 128th Page of 301 TOC 1st Previous Next ↓Bottom Just 128th
RISKS RELATED TO OUR COMMON SHARES

THERE IS NO PRIOR PUBLIC MARKET FOR THE COMMON SHARES.

Prior to the Public Offering, there has been no public trading market
for the Common Shares. If an active trading market does not develop and continue
upon completion of the Public Offering, your investment may become less liquid
and the market price of the Common Shares may decline, even below the initial
public offering price. The initial public offering price per Common Share in the
Public Offering will be determined by agreement among the Company, St. Paul and
the representatives of the underwriters and may not be indicative of the market
price of the Common Shares after the Public Offering. The Common Shares have
been approved for listing on the New York Stock Exchange (the "NYSE") under the
symbol "PTP" subject to notice of issuance.

IT MAY BE DIFFICULT TO ENFORCE SERVICE OF PROCESS AND ENFORCEMENT OF
JUDGMENTS AGAINST US AND OUR OFFICERS AND DIRECTORS.

We are a Bermuda company and certain of our officers and directors will
be residents of various jurisdictions outside the U.S. A substantial portion of
our assets and our officers and directors, at any one time, are or may be
located in jurisdictions outside the U.S. Although we have irrevocably appointed
CT Corporation System as an agent in New York, New York to receive service of
process with respect to actions against us arising out of violations of the U.S.
federal securities laws in any federal or state court in the U.S. relating to
the transactions covered by this prospectus, it may be difficult for investors
to effect service of process within the U.S. on our directors and officers who
reside outside the U.S. or to enforce against us or our directors and officers
judgments of U.S. courts predicated upon civil liability provisions of the U.S.
federal securities laws.

FUTURE SALES OF COMMON SHARES MAY AFFECT THEIR MARKET PRICE.

Sales of substantial amounts of the Common Shares in the public market
following the Public Offering, the St. Paul Investment and the RenaissanceRe
Investment, or the perception that such sales could occur, could adversely
affect the market price of the Common Shares and may make it more difficult for
us to sell our equity securities in the future, or for shareholders to sell
their Common Shares, at a time and price which they deem appropriate. Upon
completion of the Public Offering, the St. Paul Investment and the RenaissanceRe
Investment, there will be 40,000,000 Common Shares outstanding. In the event the
underwriters' option to purchase an additional 4,506,000 Common Shares is
exercised, St. Paul has the option to purchase (at a price per share equal to
the initial public offering price less the underwriting discount) in the
aggregate up to an additional 900,000 Common Shares in order to maintain the
proportionate initial share ownership in the Company it obtained prior to the
underwriters exercising their option to purchase additional Common Shares, and
RenaissanceRe has the option to purchase (at a price per share equal to the
initial public offering price less the underwriting discount) in the aggregate
up to an additional 594,000 Common Shares in order to maintain the proportionate
initial share ownership in the Company it obtained prior to the underwriters
exercising their option to purchase additional Common Shares. As a result, if
the underwriters' option to purchase additional Common Shares is exercised in
full and these additional shares are purchased by St. Paul and RenaissanceRe,
there would be 46,000,000 Common Shares outstanding upon completion of the
Public Offering, the St. Paul Investment and the RenaissanceRe Investment.
Furthermore, upon the settlement of the purchase contracts forming part of the
equity security units on 2005, an additional number of Common Shares, to be
determined based upon a settlement rate, will be sold to the holders of the
equity security units. In that event, St. Paul and RenaissanceRe may exercise
their pre-emptive rights to purchase a corresponding number of Common Shares to
maintain their respective proportionate ownership interests in Platinum
Holdings.

EX-2.1 129th Page of 301 TOC 1st Previous Next ↓Bottom Just 129th
The Common Shares sold in the Public Offering and issuable to the
holders of equity security units on , 2005 will be freely tradeable without
restriction or future registration under the Securities Act of 1933, as amended
(the "1933 Act"), by persons other than "affiliates" of the Company. The Common
Shares issued in the St. Paul Investment and the RenaissanceRe Investment, the
Common Shares issuable pursuant to the St. Paul Option and the RenaissanceRe
Option, and the Common Shares St. Paul and RenaissanceRe may purchase pursuant
to their pre-emptive rights upon the settlement of the purchase contracts
forming part of the equity security units will be "restricted securities" within
the meaning of the 1933 Act and may not be sold in the absence of registration
under the 1933 Act or an exemption therefrom. St. Paul and RenaissanceRe have
been granted rights to require the Company to register Common Shares they own.
Pursuant to a lock-up agreement, each of the Company, St. Paul, the Company's
executive officers and directors and RenaissanceRe has agreed that for a period
of 180 days from the date of this prospectus they will not, without the prior
written consent of Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and Salomon Smith Barney Inc., offer, sell, contract to sell,
pledge, grant any option to purchase, hedge, make any short sale or otherwise
dispose of any of their Common Shares or equity security units (including
purchase contracts and senior notes) or any securities of the Company that are
substantially similar to Common Shares or equity security units (including
purchase contracts and senior notes) or any options or warrants to purchase any
Common Shares or equity security units (including purchase contracts and senior
notes) or securities convertible into or exchangeable for or that represent the
right to receive any Common Shares or equity security units (including purchase
contracts and senior notes) (other than the equity security units to be offered
and sold concurrently with this offering and the securities to be offered and
sold in the St. Paul Investment and the RenaissanceRe Investment). This
agreement does not apply to existing employee benefit plans. RenaissanceRe has
agreed with us that for a period of one year from the closing date of the Public
Offering it will not sell, offer to sell, contract to sell or otherwise dispose
of any Common Shares or any other securities convertible into or exercisable or
exchangeable for any Common Shares or grant options to purchase any Common
Shares, subject to certain limited exceptions. For a description of the St. Paul
Investment and the RenaissanceRe Investment, see "St. Paul Investment,
RenaissanceRe Investment and Principal Shareholders". For a description of St.
Paul's pre-emptive rights, see "Certain Relationships and Related
Transactions--The St. Paul Investment--Formation and Separation
Agreement--Pre-emptive Rights". For a description of RenaissanceRe's pre-emptive
rights, see "Certain Relationships and Related Transactions--The RenaissanceRe
Investment--Transfer Restrictions, Registration Rights and Standstill
Agreement--Pre-emptive Rights".

OUR ISSUANCE OF EQUITY SECURITY UNITS MAY HAVE AN ADVERSE EFFECT ON THE
MARKET FOR OUR COMMON SHARES.

Concurrently with the Public Offering, we are offering $125 million of
equity security units, plus up to an additional $18.75 million of equity
security units if the underwriters' option to purchase additional equity
security units is exercised in full. Any market that develops for our equity
security units is likely to influence and be influenced by the market for our
Common Shares. Investors in our equity security units may engage in transactions
in our Common Shares in ways that adversely affect the price of our Common
Shares, including the following:

- sales of our Common Shares by investors who prefer to invest in us
by investing in our equity security units; and

- hedging an investment in our equity security units by selling our
Common Shares.

EX-2.1 130th Page of 301 TOC 1st Previous Next ↓Bottom Just 130th
PUBLIC INVESTORS WILL SUFFER IMMEDIATE DILUTION.

In the St. Paul Investment, we will issue to St. Paul, as the
consideration for the Cash Contribution and the Transferred Business, 6,000,000
Common Shares and the St. Paul Option. If the underwriters exercise their option
to purchase additional Common Shares in full, St. Paul has the option to
purchase up to 900,000 additional Common Shares at a price per share equal to
the initial public offering price less the underwriting discount. We will record
the assets contributed to us in the Transferred Business at their net book
value. In the RenaissanceRe Investment, we will issue 3,960,000 Common Shares to
RenaissanceRe at a price per share equal to the initial public offering price
less the underwriting discount. As additional consideration, RenaissanceRe will
receive the RenaissanceRe Option. If the underwriters and St. Paul exercise in
full their options to purchase additional Common Shares in connection with the
Public Offering, RenaissanceRe will have the option to purchase, at a price per
share equal to the initial public offering price less the underwriting discount,
up to 594,000 additional Common Shares at a price per share equal to the initial
public offering price less the underwriting discount. As a result, the initial
public offering price per Common Share will be higher than our net tangible book
value per share. Accordingly, if you purchase Common Shares in the Public
Offering, you will suffer immediate dilution of your investment. Based upon the
issuance and sale of 30,040,000 Common Shares at an assumed initial public
offering price of $22.50 (the midpoint of the range stated on the front cover
page) an assumed Cash Contribution in the amount of $123 million (the midpoint
of the $121 million to $126 million range for the Cash Contribution) and assumed
proceeds from the RenaissanceRe investment of $84 million (the midpoint of the
$83 million to $86 million range of those proceeds), you will incur immediate
dilution of approximately $1.26 in the net tangible book value per Common Share
(or $1.25 if the underwriters, St. Paul and RenaissanceRe exercise their options
to purchase additional Common Shares in connection with the Public Offering in
full).

THERE ARE LIMITATIONS ON THE OWNERSHIP, TRANSFERS AND VOTING RIGHTS OF
OUR COMMON SHARES.

Under our bye-laws, our directors are required to decline to register
any transfer of Common Shares that would result in a person (or any group of
which such person is a member), beneficially owning, directly or indirectly, 10%
or more of the voting shares, or in the case of St. Paul and its subsidiaries,
or RenaissanceRe and its subsidiaries, beneficially owning, directly or
indirectly, 25% or more of such shares or of the total combined value of our
issued shares. Similar restrictions apply to our ability to issue or repurchase
shares. These restrictions on the transfer, issuance or repurchase of shares do
not apply to any issuance of shares to a person (other than St. Paul and its
subsidiaries and RenaissanceRe and its subsidiaries) pursuant to a contract to
purchase Common Shares from Platinum Holdings included in the equity security
units. The directors also may, in their discretion, decline to register the
transfer of any shares if they have reason to believe (1) that the transfer may
lead to adverse tax or regulatory consequences in any jurisdiction or (2) that
the transfer would violate the registration requirements of the U.S. federal
securities laws or of any other jurisdiction. These restrictions would apply to
a transfer of shares even if the transfer has been executed on the NYSE. A
transferor of Common Shares will be deemed to own those shares for dividend,
voting and reporting purposes until a transfer of those Common Shares has been
registered on our register of shareholders. We are authorized to request
information from any holder or prospective acquiror of Common Shares as
necessary to give effect to the transfer, issuance and repurchase restrictions
referred to above, and may decline to effect any transaction if complete and
accurate information is not received as requested.

In addition, our bye-laws generally provide that any person (or any
group of which such person is a member) beneficially owning, directly or
indirectly, shares carrying 10% or more of the total voting rights attached to
all of our outstanding voting shares, will have the voting rights attached to
its issued shares reduced so that it may not exercise 10% or more of such total
voting rights. Because of the attribution provisions of the U.S. Internal
Revenue Code of 1986, as amended (the

EX-2.1 131st Page of 301 TOC 1st Previous Next ↓Bottom Just 131st
"Code"), and the rules of the Securities and Exchange Commission (the "SEC")
regarding determination of beneficial ownership, this requirement may have the
effect of reducing the voting rights of a shareholder whether or not such
shareholder directly holds 10% or more of our Common Shares. Further, the
directors have the authority to require from any shareholder certain information
for the purpose of determining whether that shareholder's voting rights are to
be reduced. Failure to respond to such a notice, or submitting incomplete or
inaccurate information, gives the directors (or their designee) discretion to
disregard all votes attached to that shareholder's Common Shares. See
"Description of Our Common Shares".

The insurance law of Maryland prevents any person from acquiring
control of us or of Platinum US unless that person has filed a notification with
specified information with the Maryland Insurance Commissioner and has obtained
his prior approval. Under the Maryland statute, acquiring 10% or more of the
voting stock of an insurance company or its parent company is presumptively
considered a change of control, although such presumption may be rebutted.
Accordingly, any person who acquires, directly or indirectly, 10% or more of the
voting securities of Platinum Holdings without the prior approval of the
Maryland Insurance Commissioner will be in violation of this law and may be
subject to injunctive action requiring the disposition or seizure of those
securities by the Maryland Insurance Commissioner or prohibiting the voting of
those securities and to other actions determined by the Maryland Insurance
Commissioner. In addition, many U.S. state insurance laws require prior
notification of state insurance departments of a change in control of a
non-domiciliary insurance company doing business in that state. While these
pre-notification statutes do not authorize the state insurance departments to
disapprove the change in control, they authorize regulatory action in the
affected state if particular conditions exist such as undue market
concentration. Any future transactions that would constitute a change in control
of Platinum Holdings may require prior notification in those states that have
adopted preacquisition notification laws.

Common Shares may be offered or sold in Bermuda only in compliance with
the provisions of the Investment Business Act 1998 of Bermuda. In addition,
sales of Common Shares to persons resident in Bermuda for Bermuda exchange
control purposes may require the prior approval of the Bermuda Monetary
Authority. Consent under the Exchange Act of 1972 (and regulations thereunder)
has been obtained from the Bermuda Monetary Authority for the issue and transfer
of the Common Shares being offered pursuant to this offering and between
non-residents of Bermuda for exchange control purposes, provided our Common
Shares remain listed on an appointed stock exchange, which includes the NYSE.
This prospectus will be filed with the Registrar of Companies in Bermuda in
accordance with Bermuda law. In giving such consent, and in accepting this
prospectus for filing, neither the Bermuda Monetary Authority nor the Registrar
of Companies accepts any responsibility for the financial soundness of any
proposal or for the correctness of any of the statements made or opinions
expressed herein.

The Financial Services and Markets Act 2000 ("FSMA") regulates the
acquisition of "control" of any U.K. insurance company authorized under FSMA.
Any company or individual that (together with its or his associates) directly or
indirectly acquires 10% or more of the shares in the parent company of a U.K.
authorized insurance company, or is entitled to exercise or control the exercise
of 10% or more of the voting power in such a parent company, would be considered
to have acquired "control" for the purposes of the relevant legislation, as
would a person who had significant influence over the management of such parent
company by virtue of his shareholding in it. A purchaser of more than 10% of the
Common Shares would therefore be considered to have acquired "control" of
Platinum UK.

Under FSMA, any person proposing to acquire "control" over a U.K.
authorized insurance company must give prior notification to the FSA of his
intention to do so. The FSA would then have three months to consider that
person's application to acquire "control". In considering whether to

EX-2.1 132nd Page of 301 TOC 1st Previous Next ↓Bottom Just 132nd
approve such application, the FSA must be satisfied both that the acquirer is a
fit and proper person to have such "control" and that the interests of consumers
would not be threatened by such acquisition of "control". Failure to make the
relevant prior application would constitute a criminal offense.

The foregoing provisions of our bye-laws and legal restrictions will
have the effect of rendering more difficult or discouraging unsolicited takeover
bids from third parties or the removal of incumbent management.

YOUR INVESTMENT COULD BE MATERIALLY ADVERSELY AFFECTED IF WE ARE DEEMED
TO BE ENGAGED IN BUSINESS IN THE U.S.

Platinum Holdings and Platinum Bermuda are Bermuda companies, Platinum
UK is a U.K. company, and Platinum Ireland is an Irish company. We believe that
Platinum Holdings, Platinum UK, Platinum Bermuda and Platinum Ireland will each
operate in such a manner that none of these companies will be subject to U.S.
tax (other than U.S. excise tax on reinsurance premiums and withholding tax on
certain investment income from U.S. sources) because they will not be engaged in
a trade or business in the U.S. Nevertheless, because definitive identification
of activities which constitute being engaged in a trade or business in the U.S.
is not provided by the Code or regulations or court decisions, the U.S. Internal
Revenue Service (the "IRS") might contend that any of Platinum Holdings,
Platinum UK, Platinum Bermuda or Platinum Ireland are/is engaged in a trade or
business in the U.S. If Platinum Holdings, Platinum UK, Platinum Bermuda or
Platinum Ireland were engaged in a trade or business in the U.S., and if
Platinum UK, Platinum Bermuda or Platinum Ireland were to qualify for benefits
under the applicable income tax treaty with the United States, but such trade or
business were attributable to a "permanent establishment" in the U.S. (or in the
case of Platinum Bermuda, with respect to investment income, arguably even if
such income were not attributable to a "permanent establishment"), Platinum
Holdings, Platinum UK, Platinum Bermuda and/or Platinum Ireland would be subject
to U.S. tax at regular corporate rates on the income that is effectively
connected with the U.S. trade or business, plus an additional 30% "branch
profits" tax on such income remaining after the regular tax in certain
circumstances, in which case our earnings and your investment could be
materially adversely affected.

IF YOU ACQUIRE 10% OR MORE OF THE COMMON SHARES, CFC RULES MAY APPLY TO
YOU.

Under the Code, each "United States shareholder" of a foreign
corporation that is a "controlled foreign corporation" ("CFC") for an
uninterrupted period of 30 days or more during a taxable year, and who owns
shares in the CFC on the last day of the CFC's taxable year must include in its
gross income for U.S. federal income tax purposes its pro rata share of the
CFC's "subpart F income", even if the subpart F income is not distributed. For
these purposes, any U.S. person who owns, directly or indirectly through a
foreign entity or through the constructive ownership rules of the Code, 10% or
more of the total combined voting power of all classes of stock of a foreign
corporation will be considered to be a "United States shareholder". In general,
a foreign insurance company such as Platinum UK or Platinum Bermuda is treated
as a CFC only if such "United States shareholders" collectively own more than
25% of the total combined voting power or total value of our stock. St. Paul
will actually own approximately 15% (and will, after applying the constructive
ownership rules of the Code, own no more than 24.9%) of the Common Shares upon
completion of this offering, assuming no exercise of the underwriters' option to
purchase additional Common Shares, although, pursuant to our bye-laws, the
combined voting power of these shares is limited to approximately 9.9% of the
combined voting power of all Common Shares. We expect that, because of the
limitations on concentration of voting power of our Common Shares, the
dispersion of our share ownership among holders other than St. Paul, the
provisions for directed voting on matters requiring action by the shareholders
of Platinum Bermuda, Platinum Ireland and Platinum UK (including the election of
the members of their boards of directors) and the restrictions on

EX-2.1 133rd Page of 301 TOC 1st Previous Next ↓Bottom Just 133rd
transfer, issuance or repurchase of the Common Shares, you will not be subject
to treatment as a "United States shareholder" of a CFC. In addition, because
under our bye-laws no single shareholder (including St. Paul) is permitted to
exercise, after taking into account Common Shares constructively owned or held
indirectly through a foreign entity, as much as 10% of the total combined voting
power of the Company, you should not be viewed as a "United States shareholder"
of a CFC for purposes of these rules. However, these rules could apply to you.
Accordingly, U.S. persons who might, directly, or indirectly through a foreign
entity or through the constructive ownership rules of the Code, acquire or be
deemed to acquire 10% or more of our Common Shares should consider the possible
application of the CFC rules.

UNDER CERTAIN CIRCUMSTANCES, YOU MAY BE REQUIRED TO PAY TAXES ON YOUR
PRO RATA SHARE OF PLATINUM BERMUDA'S AND PLATINUM UK'S RELATED PERSON
INSURANCE INCOME.

If Platinum UK's or Platinum Bermuda's related person insurance income
("RPII") were to equal or exceed 20% of Platinum UK's or Platinum Bermuda's
gross insurance income in any taxable year and direct or indirect insureds (and
persons related to such insureds) own (or are treated as owning directly or
indirectly) 20% or more of the voting power or value of the shares of Platinum
UK or Platinum Bermuda, a U.S. person who owns the Common Shares of Platinum
Holdings directly or indirectly on the last day of the taxable year would be
required to include in its income for U.S. federal income tax purposes the
shareholder's pro rata share of Platinum UK's or Platinum Bermuda's RPII for the
entire taxable year, determined as if such RPII were distributed proportionately
to such United States shareholders at that date regardless of whether such
income is distributed. In addition, U.S. tax-exempt organizations would be
required to treat RPII as unrelated business taxable income if Platinum UK's or
Platinum Bermuda's RPII equaled or exceeded 20% of Platinum UK's or Platinum
Bermuda's gross insurance income in any taxable year. The amount of RPII earned
by Platinum UK or Platinum Bermuda (generally, premium and related investment
income from the direct or indirect insurance or reinsurance of any direct or
indirect U.S. shareholder of Platinum UK or Platinum Bermuda or any person
related to such shareholder, including St. Paul) will depend on a number of
factors, including the geographic distribution of Platinum UK's or Platinum
Bermuda's business and the identity of persons directly or indirectly insured or
reinsured by Platinum UK or Platinum Bermuda. Some of the factors which
determine the extent of RPII in any period may be beyond Platinum UK's or
Platinum Bermuda's control. Consequently, Platinum UK's or Platinum Bermuda's
RPII could equal or exceed 20% of its gross insurance income in any taxable year
and ownership of its shares by direct or indirect insureds and related persons
could equal or exceed the 20% threshold described above.

The RPII rules provide that if a shareholder who is a U.S. person
disposes of shares in a foreign insurance corporation that has RPII (even if the
amount of RPII is less than 20% of the corporation's gross insurance income) and
in which U.S. persons own 25% or more of the shares, any gain from the
disposition will generally be treated as ordinary income to the extent of the
shareholder's share of the corporation's undistributed earnings and profits that
were accumulated during the period that the shareholder owned the shares
(whether or not such earnings and profits are attributable to RPII). In
addition, such a shareholder will be required to comply with certain reporting
requirements, regardless of the amount of shares owned by the shareholder. These
rules should not apply to dispositions of Common Shares because Platinum
Holdings will not itself be directly engaged in the insurance business and
because proposed U.S. Treasury regulations appear to apply only in the case of
shares of corporations that are directly engaged in the insurance business.
However, the IRS might interpret the proposed regulations in a different manner
and the applicable proposed regulations may be promulgated in final form in a
manner that would cause these rules to apply to dispositions of our Common
Shares.

EX-2.1 134th Page of 301 TOC 1st Previous Next ↓Bottom Just 134th
CHANGES IN U.S. FEDERAL INCOME TAX LAW COULD MATERIALLY ADVERSELY
AFFECT SHAREHOLDERS' INVESTMENT.

Recently proposed U.S. legislation targeting so-called "inversion
transactions" would under certain circumstances treat a foreign corporation as a
U.S. corporation for U.S. federal income tax purposes and under other
circumstances would require obtaining IRS approval of the terms of related-party
transactions. In addition, interest deductions on debt borrowed from or
guaranteed by a related non-U.S. party would be more severely limited than under
existing so-called "earnings stripping" provisions.

The Company and its subsidiaries would appear generally not to be
subject to the proposed legislation directed at inversion transactions as
currently drafted. However, the proposed changes to the earnings stripping
provisions could impose significant restrictions on the amount of interest
deductible by the Company's U.S. subsidiaries on certain debt owed to or
guaranteed by related non-U.S. parties (including the surplus note to be issued
by Platinum US to Platinum Ireland and the senior notes to be issued by Platinum
Finance and guaranteed by the Company). We cannot predict whether the proposed
legislation (or any similar legislation) will be enacted or, if enacted, what
the specific provisions or the effective date of any such legislation would be,
or whether it would have any effect on the Company or its subsidiaries.

If the inversion legislation were enacted and made applicable to the
Company and its subsidiaries, we could be treated as a U.S. corporation. If we
were treated as a U.S. corporation, we would be subject to taxation in the U.S.
at regular corporate rates, in which case our earnings and shareholders'
investments would be materially adversely affected. In addition, the U.S. tax
consequences to our shareholders would be significantly different from those
described below in "Certain Tax Considerations--Taxation of Shareholders--United
States Taxation of U.S. and Non-U.S. Shareholders". If the inversion legislation
were to so apply, however, the earnings stripping provisions would, if also
enacted, be inapplicable to the extent the non-U.S. related-party lender or
guarantor was treated as a U.S. corporation under the inversion legislation.
Prospective investors should consult their tax advisors regarding the U.S. tax
consequences to them, in their particular circumstances, if we were treated as a
U.S. corporation.

In addition, a bill has been introduced in the House of Representatives
that would effectively deny--by deferring for an extended period--a U.S.-based
insurer or reinsurer that reinsures or retrocedes a portion of its risk with or
to a related foreign-based reinsurer or retrocedent in a low tax rate
jurisdiction (such as Bermuda) a deduction for the portion of the insurance or
reinsurance premium ceded to the related foreign-based party, thereby
effectively subjecting all of the premium income to U.S. tax. Moreover, a senior
official of the U.S. Treasury Department has also identified related party
reinsurance arrangements as an area that requires study because it may result in
an inappropriate shift of income from a U.S. corporate group to its foreign
affiliates, implying that, were that to be the conclusion of such a study,
legislation, possibly in the form of legislation imposing a premium-based tax,
might be needed. Enactment of legislation of either type could materially
adversely affect our earnings and shareholders' investments.

WE MAY BECOME SUBJECT TO TAXES IN BERMUDA AFTER 2016.

We have received a standard assurance from the Bermuda Minister of
Finance, under Bermuda's Exempted Undertakings Tax Protection Act 1966, that if
any legislation is enacted in Bermuda that would impose tax computed on profits
or income, or computed on any capital asset, gain or appreciation, or any tax in
the nature of estate duty or inheritance tax, then the imposition of any such
tax will not be applicable to us or to any of our operations or our shares,
debentures or other obligations until March 28, 2016. Consequently, if our
Bermuda tax exemption is not extended past March 28, 2016, we may be subject to
any Bermuda tax after that date. For more information

EX-2.1 135th Page of 301 TOC 1st Previous Next ↓Bottom Just 135th
on Bermuda taxation of Platinum Holdings and Platinum Bermuda, see "Certain Tax
Considerations".

BERMUDA COULD BE SUBJECT TO SANCTIONS BY A NUMBER OF MULTINATIONAL
ORGANIZATIONS WHICH COULD ADVERSELY AFFECT BERMUDA COMPANIES.

A number of multinational organizations, including the EU, the
Organization for Economic Cooperation and Development ("OECD"), including its
Financial Action Task Force, and the Financial Stability Forum have all recently
identified certain countries as blocking information exchange, engaging in
harmful tax competition or not maintaining adequate controls to prevent
corruption, such as money laundering activities. Recommendations to limit such
harmful practices are under consideration by these organizations, and a recent
report published on November 27, 2001 by the OECD contains an extensive
discussion of specific recommendations. The OECD has threatened non-member
jurisdictions that do not agree to cooperate with the OECD with punitive
sanctions by OECD member countries. It is unclear what these sanctions will be
and if they will be imposed. Bermuda has committed to a course of action to
enable compliance with the requirements of these multinational organizations.
However, the action taken by Bermuda may not be sufficient to preclude all
effects of the measures or sanctions described above, which if ultimately
adopted could adversely affect Bermuda companies such as Platinum Holdings and
Platinum Bermuda.

Some of the statements contained in this prospectus, including those
using words such as "believes", "expects", "intends", "estimates", "projects",
"predicts", "assumes", "anticipates", "plans" and "seeks", and variations
thereof, are forward-looking statements. Forward-looking statements are
statements other than of historical fact. Since Platinum has no history of
operations, most of the statements relating to Platinum and its business,
including statements relating to its competitive strengths and business
strategies, are forward-looking statements. These forward-looking statements are
subject to risks and uncertainties and are not a guarantee of future
performance. In light of these risks and uncertainties, actual results may
differ materially from those suggested by the forward-looking statements for
various reasons, including those discussed in this section. We may not be able
to conduct our business successfully, execute our strategies effectively or
achieve our financial and other objectives.

As with any common stock investment, the price of our Common Shares may
fluctuate widely depending on many factors, including:

- the perceived prospects of our business in particular and the
insurance, asset management, securities and financial services
industries generally;

- differences between our actual financial and operating results and
those expected by investors and analysts;

- changes in analysts' recommendations or projections;

- changes in general economic, market and political conditions; and

- broad market and interest rate fluctuations.

DILUTION

Net tangible book value per Common Share represents the amount of
tangible assets less total liabilities, divided by the number of Common Shares
outstanding. Dilution in net tangible book value per Common Share represents the
difference between the amount per Common Share paid by purchasers of our Common
Shares in the Public Offering and the net tangible book value per Common Share,
immediately after the Public Offering. Because St. Paul will make the Cash
Contribution and contribute the Transferred Business, having a net tangible book
value of

EX-2.1 136th Page of 301 TOC 1st Previous Next ↓Bottom Just 136th
approximately $11 million as of June 30, 2002, in return for its Common Shares
and the St. Paul Option, because we will record the assets so contributed at
their net book value, and because RenaissanceRe will pay a purchase price per
share equal to the initial public offering price less the underwriting discount
in the RenaissanceRe Investment, the initial public offering price per Common
Share will be higher than our net tangible book value per share. Accordingly, if
you purchase Common Shares in the Public Offering, you will suffer immediate
dilution of your investment. After giving effect to (1) St. Paul's Cash
Contribution ranging from $121 million to $126 million and its contribution of
the Transferred Business in return for 6,000,000 Common Shares and the St. Paul
Option, (2) our sale of 30,040,000 Common Shares in the Public Offering at an
assumed initial public offering price of $22.00, $22.50 and $23.00,
respectively, per Common Share, (3) proceeds from the RenaissanceRe Investment
ranging from $83 million to $86 million and (4) our sale of $125 million in
equity security units in the ESU Offering, after deduction of underwriting
discounts and commissions and estimated formation, organization and offering
expenses payable by us, resulting in net proceeds to us of approximately $949
million to $987 million, the range of our pro forma net tangible book value as
of June 30, 2002 would have been approximately $830 million to $868 million, or
$20.76 to $21.71 per Common Share. This represents an immediate dilution in pro
forma net tangible book value of approximately $1.24 to $1.29 per Common Share
to purchasers in this offering.

[Enlarge/Download Table]

IPO PRICE IPO PRICE IPO PRICE
OF $22.00 OF $22.50 OF $23.00
PER SHARE PER SHARE PER SHARE
--------- --------- ---------

St. Paul Cash Contribution (in millions) ........................... $ 121 $ 123 $ 126
RenaissanceRe Investment (in millions) ............................. 83 84 86
Assumed initial public offering price per Common Share ............. 22.00 22.50 23.00
Net tangible book value per Common Share after the offering ........ 20.76 21.24 21.71
--------- --------- ---------
Net tangible book value dilution per Common Share to investors ..... $ 1.24 $ 1.26 $ 1.29
========= ========= =========

As we are newly formed, our net tangible book value before the Public Offering,
the ESU Offering, the St. Paul Investment and the RenaissanceRe Investment was
$120,000 as of June 30, 2002.

The following table sets forth, on a pro forma basis as of June 30,
2002, and assuming an initial public offering price of $22.50 per share (the
midpoint of the range stated on the front cover page), for St. Paul,
RenaissanceRe and the investors in the Public Offering:

- the number of Common Shares purchased from us;

- the total consideration paid (including cash, and in the case of
St. Paul, the outstanding capital stock of Platinum US, which
includes net assets of approximately $5 million in cash and cash
equivalents after reflecting a dividend of $15 million to be paid,
prior to the completion of the Public Offering, to United States
Fidelity and Guaranty Company, the current parent of Platinum US);

- the average price per Common Share paid by St. Paul and
RenaissanceRe, which represents an amount approximately equal to
the initial public offering price less the underwriters' discount;
and

EX-2.1 137th Page of 301 TOC 1st Previous Next ↓Bottom Just 137th
- the average price per Common Share paid by investors in the Public
Offering before deducting underwriting discounts and commissions
and estimated offering expenses.

[Download Table]

COMMON SHARES PRO FORMA TOTAL AVERAGE
PURCHASED CONSIDERATION PRICE PER
------------------- ------------------------ COMMON
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- --------------- ------- ---------

St. Paul ................ 6,000,000 15.0% $ 127,912,500 14.4% $ 21.32
RenaissanceRe ........... 3,960,000 9.9 84,422,250 9.5 21.32
Investors ............... 30,040,000 75.1 675,900,000 76.1 22.50
---------- ----- --------------- ----- ---------
Total ................... 40,000,000 100.0% $ 888,234,750 100.0% $ 22.21
========== ===== =============== ===== =========

The above table does not include St. Paul's contribution to Platinum of
tangible assets and certain intangible assets having a net book value of
approximately $7 million as of June 30, 2002. The above table also does not
include Common Shares issuable upon (1) exercise of the underwriters' option to
purchase additional Common Shares in the Public Offering and the concurrent
optional purchase by St. Paul or RenaissanceRe of additional Common Shares to
maintain their respective proportionate share ownership immediately following
the Public Offering, (2) exercise of the St. Paul Option, (3) exercise of the
RenaissanceRe Option, (4) exercise of options to be issued to our management and
other employees pursuant to our employee compensation plans or (5) settlement of
the purchase contracts contained in the equity security units. Including the
underwriters' option to purchase additional shares (and the exercise in full by
St. Paul and RenaissanceRe of their options to purchase additional shares to
maintain their respective ownership levels). Assuming an initial public offering
price of from $22.00 to $23.00, respectively, St. Paul's total contribution
would be for an average price of from $21.98 to $22.93 per share, and
RenaissanceRe's contribution would be for an average price of from $20.85 to
$21.79 per share.

Any exercise of the St. Paul Option or RenaissanceRe Option would not
be dilutive to investors in the Public Offering because the exercise price for
each of the options is 120% of the initial public offering price. We have
estimated the fair value per underlying Common Share of the St. Paul Option (to
St. Paul) and of the RenaissanceRe Option (to RenaissanceRe) to be between
approximately $7.00 and $11.00, as of the date of this preliminary prospectus,
assuming the initial public offering price is $22.50 per Common Share. Such
estimates were determined using the Black-Scholes model for valuing options, and
incorporated the following assumptions: ten year holding period; stock
volatility between 30% and 45%; ten-year discount and loan rate of approximately
4.4%; and a dividend rate of $0.32 per year.

USE OF PROCEEDS

Assuming no exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares in connection with
the Public Offering or the underwriters' option to purchase additional equity
security units, we expect to receive net proceeds (after the underwriters'

EX-2.1 138th Page of 301 TOC 1st Previous Next ↓Bottom Just 138th
discount and before expenses) from the Public Offering, the Cash Contribution,
the RenaissanceRe Investment and the ESU Offering as set forth in the following
table:

[Download Table]

IPO PRICE IPO PRICE IPO PRICE
OF $22.00 OF $22.50 OF $23.00
PER SHARE PER SHARE PER SHARE
--------- --------- ---------
($ IN MILLIONS)

Public Offering ................... $ 626 $ 640 $ 655
St. Paul Cash Contribution ........ 121 123 126
RenaissanceRe Investment .......... 83 84 86
ESU Offering ...................... 120 120 120
Total Net Proceeds(1) ............. $ 949 $ 968 $ 987

------------------
(1) Components may not add to totals due to rounding.

Assuming full exercise (which is in their sole discretion) by the
underwriters, St. Paul and RenaissanceRe of their options to purchase additional
Common Shares in connection with the Public Offering and the underwriters'
option to purchase additional equity security units, we expect to receive net
proceeds (after the underwriters' discount and before expenses) from the Public
Offering, the Cash Contribution, the RenaissanceRe Investment and the ESU
Offering as set forth in the following table:

[Download Table]

IPO PRICE IPO PRICE IPO PRICE
OF $22.00 OF $22.50 OF $23.00
PER SHARE PER SHARE PER SHARE
--------- --------- ---------
($ IN MILLIONS)

Public Offering ................... $ 720 $ 736 $ 753
St. Paul Cash Contribution ........ 139 143 146
RenaissanceRe Investment .......... 95 97 99
ESU Offering ...................... 138 138 138
Total Net Proceeds ................ $ 1,092 $ 1,114 $ 1,136

A portion of the net proceeds of the Public Offering, the Cash
Contribution and the RenaissanceRe Investment, currently estimated at
approximately $10 million, will be retained by Platinum Holdings and the balance
will be contributed to the capital of Platinum US (in an amount not less than
$250 million, which includes net proceeds from the ESU Offering as discussed
below), Platinum UK (in an amount not less than $150 million, upon its being
licensed in the United Kingdom), Platinum Ireland (in an amount not less than
$100 million, substantially all of which will be used to purchase a surplus note
issued by Platinum US) and Platinum Bermuda (in an amount not less than $375
million). To the extent we receive net proceeds from the Public Offering, the
Cash Contribution and the RenaissanceRe Investment in excess of the minimum
amounts stated above, we expect to contribute substantially all such proceeds to
the capital of Platinum Bermuda. All but approximately $20 million of the net
proceeds from the ESU Offering (or approximately $23 million if the underwriters
exercise in full their option to purchase additional equity security units) will
be contributed to Platinum US. The remaining net proceeds from the ESU Offering
will be retained by Platinum Finance.

The following table shows the application of the minimum and maximum
aggregate estimated net proceeds of the Public Offering, the Cash Contribution,
the RenaissanceRe Investment and the ESU Offering. The minimum net proceeds
assume an initial public offering price of $22.00 per share and no exercise of
the underwriters', St. Paul's or RenaissanceRe's options to purchase additional
Common Shares in connection with the Public Offering or the underwriters' option
to purchase additional equity security units (i.e., aggregate net proceeds of
$949 million) and the maximum net proceeds assume an initial public offering
price of $23.00 per share and full exercise of the underwriters', St. Paul's and
RenaissanceRe's options to purchase additional Common Shares in

EX-2.1 139th Page of 301 TOC 1st Previous Next ↓Bottom Just 139th
connection with the Public Offering and the underwriters' option to purchase
additional equity security units (i.e., aggregate net proceeds of $1,136
million):

[Download Table]

MINIMUM NET MAXIMUM
PROCEEDS NET PROCEEDS
----------- ------------
($ IN MILLIONS)

Platinum Holdings ............ $ 10 $ 10
Platinum Ireland ............. 100 100
Platinum Finance ............. 20 23
Platinum US .................. 250 265
Platinum UK .................. 150 150
Platinum Bermuda ............. 419 588
------ --------
Total ........................ $ 949 $ 1,136
------ --------

EX-2.1 140th Page of 301 TOC 1st Previous Next ↓Bottom Just 140th
DIVIDEND POLICY

The Company intends to declare and pay quarterly cash dividends of $
per Common Share beginning with the first quarter of 2003. The declaration and
payment of dividends will be at the discretion of the Board of Directors of the
Company but will be prohibited if certain contract adjustment payments in
respect of the equity security units are deferred, and will depend upon our
results of operations and cash flows, the financial position and capital
requirements of Platinum US, Platinum UK and Platinum Bermuda, general business
conditions, legal, tax and regulatory restrictions on the payment of dividends
and other factors the Board of Directors of the Company deems relevant. While
the Company is not itself subject to any significant legal prohibitions on the
payment of dividends, Platinum US will be subject to regulatory constraints
imposed by Maryland insurance law, Platinum UK will be subject to regulatory
constraints imposed by U.K. insurance law, Platinum Ireland will be subject to
constraints imposed by Irish law, and Platinum Bermuda will be subject to
regulatory constraints imposed by Bermuda insurance law, which affect their
ability to pay dividends to the Company. See "Business--Regulation".
Accordingly, there is no requirement or assurance that dividends will be
declared or paid in the future. In addition, we do not expect that our rate of
dividend increase, if any, will be more than 10% per year, and we have agreed to
adjust the exercise price in the St. Paul Option and the RenaissanceRe Option to
the extent dividend increases exceed such rate. See "Certain Relationships and
Related Transactions--The St. Paul Investment--St. Paul Option Agreement" and
"--The RenaissanceRe Investment--The RenaissanceRe Option Agreement".

EX-2.1 141st Page of 301 TOC 1st Previous Next ↓Bottom Just 141st
CAPITALIZATION

The following table sets forth the capitalization of the Company as of
June 30, 2002 and as adjusted to give effect to the Public Offering and the
RenaissanceRe Investment based on an assumed initial public offering price in
the Public Offering of $22.50 per Common Share (the midpoint of the range stated
on the front cover page) and a Cash Contribution of $123 million (the midpoint
of the $121 million to $126 million range for the Cash Contribution), as well as
the ESU Offering. This table assumes no exercise by the underwriters, St. Paul
or RenaissanceRe of their options to purchase up to, in aggregate, 6,000,000
additional Common Shares in connection with the Public Offering or the
underwriters' option to purchase up to $18.75 million of additional equity
security units in the ESU Offering.

[Enlarge/Download Table]

ADJUSTMENT FOR
ADJUSTMENT FOR PUBLIC OFFERING,
PUBLIC OFFERING, CASH CONTRIBUTION,
CASH CONTRIBUTION AND RENAISSANCERE
RENAISSANCERE ADJUSTMENT FOR INVESTMENT AND
ACTUAL INVESTMENT ESU OFFERING ESU OFFERING
------ --------------------- -------------- ------------------

Debt obligations ................ $ -- $ -- $ 125,000,000 $ 125,000,000
Shareholders' equity
Preferred Shares, par value
$0.01 per share
(25,000,000 shares
authorized, as adjusted;
none outstanding) .......... -- -- -- --
Common Shares, par value
$0.01 per share
(135,000,000 shares
authorized; 200,000,000
shares authorized, as
adjusted; 1,200,000 shares
outstanding;
40,000,000 shares
outstanding, as adjusted) .. 12,000 388,000 -- 400,000
Additional paid-in capital .... 108,000 859,041,000 (8,000,000)(1) 851,149,000
Retained earnings ............. -- (2,138,000)(2) -- (2,138,000)
---------- -------------- --------------- ----------------
Total shareholders' equity ...... 120,000 857,291,000 (8,000,000) 849,411,000
---------- -------------- --------------- ----------------
Total capitalization .......... $ 120,000 $ 857,291,000 $ 117,000,000 $ 974,411,000
========== ============== =============== ================

------------------
(1) Reflects an adjustment representing the present value of the contract
adjustment payments payable in connection with the purchase contracts
contained in the equity security units.

(2) Reflects certain formation and organization expenses as discussed in
Notes 2 and 12 to our consolidated balance sheet on pages F-5 and F-12
of this prospectus.

EX-2.1 142nd Page of 301 TOC 1st Previous Next ↓Bottom Just 142nd
PRO FORMA FINANCIAL INFORMATION

- Platinum's pro forma combined statement of underwriting results
includes premium and loss development on business entered into
prior to January 1, 2002. Under the Quota Share Retrocession
Agreements, we are assuming no premium or loss development on
business entered into prior to January 1, 2002. Therefore, our
reported premiums written and earned and reported losses and loss
adjustment expenses in our initial years of operation could be
substantially lower than as presented in Platinum's pro forma
combined statement of underwriting results. As such, our reported
results in our initial years of operation will not be subject to
prior year development for periods prior to January 1, 2002.

- Platinum's pro forma consolidated balance sheet reflects the
inception of the Quota Share Retrocession Agreements assuming
transferred balances as of June 30, 2002. Platinum's actual
consolidated balance sheet will report transferred amounts
determined as of 12:01 a.m., on the day immediately following the
date of completion of the Public Offering. Accordingly,
underwriting gain or loss with respect to the Assumed Reinsurance
Contracts for the period from January 1, 2002 through such date
will be retained by St. Paul.

PRO FORMA CONSOLIDATED BALANCE SHEET

We have prepared our unaudited pro forma consolidated balance sheet as
of June 30, 2002 to reflect our initial capitalization in the amount of $120,000
and adjusted to reflect, among other things,

EX-2.1 143rd Page of 301 TOC 1st Previous Next ↓Bottom Just 143rd
- amounts reflecting (a) the receipt of approximately $725 million,
representing the estimated net proceeds from the Public Offering
and the RenaissanceRe Investment based on an assumed initial
public offering price of $22.50 per Common Share (the midpoint of
the range stated on the front cover page), without giving effect
to any exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares, (b)
the redemption of the Common Shares that were issued at inception
and capital contributed prior to the Public Offering, (c) the
payment of certain formation and organization expenses, as
discussed in Notes 2 and 12 to our consolidated balance sheet, on
pages F-5 and F-12 of this prospectus, which total $5.1 million,
of which $2.1 million has been expensed as of June 30, 2002, and
(d) our entering into, and accruing for, the Services and Capacity
Reservation Agreement as of June 30, 2002. Additional formation
and organization expenses will be incurred prior to closing. It is
further assumed that the net proceeds from the Public Offering
will be invested in long-term, taxable fixed income securities;

- amounts reflecting Platinum entering into the Quota Share
Retrocession Agreements with St. Paul Re reinsuring the Assumed
Reinsurance Contracts as of June 30, 2002.

[Enlarge/Download Table]

JUNE 30, 2002
ADJUSTMENTS
-------------------------------------------------
PRO FORMA
HISTORICAL (1) (2) (3) (4) PLATINUM
---------- ---------- ---------- ---------- ---------- ---------
($ IN THOUSANDS)

ASSETS:
Investments ................................. $ -- $ 724,837 $ 123,375 $ 120,000 $ -- $ 968,212
Cash ........................................ 130 (5,230) 4,538 -- 200,186 199,624
Deferred acquisition costs .................. -- -- -- -- 24,839 24,839
Funds held by reinsured ..................... -- -- -- -- 40,739 40,739
Other assets ................................ -- 6,962 6,799 5,000 -- 18,761
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS ............................. $ 130 $ 726,569 $ 134,712 $ 125,000 $ 265,764 $1,252,175
========== ========== ========== ========== ========== ==========
LIABILITIES:
Unpaid losses and loss adjustment expense
reserves ................................... $ -- $ -- $ -- $ -- $ 108,957 $ 108,957
Unearned premium reserves ................... -- -- -- -- 140,155 140,155
Debt obligations ............................ -- -- -- 125,000 -- 125,000
Financial reinsurance liabilities ........... -- -- -- -- 16,652 16,652
Other liabilities ........................... 10 3,990 -- 8,000 -- 12,000
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES ........................ $ 10 $ 3,990 $ -- $ 133,000 $ 265,764 $ 402,764
---------- ---------- ---------- ---------- ---------- ----------
SHAREHOLDERS' EQUITY:
Common shares ............................... $ 12 $ 328 $ 60 $ -- $ -- $ 400
Additional paid-in capital .................. 108 724,389 134,652 (8,000) -- 851,149
Retained earnings ........................... -- (2,138) -- -- -- (2,138)
---------- ---------- ---------- ---------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY ............... $ 120 $ 722,579 $ 134,712 $ (8,000) $ -- $ 849,411
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .. $ 130 $ 726,569 $ 134,712 $ 125,000 $ 265,764 $1,252,175
========== ========== ========== ========== ========== ==========

EX-2.1 144th Page of 301 TOC 1st Previous Next ↓Bottom Just 144th
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

The following describe amounts included in the "Adjustments" columns above:

1. Amounts reflecting (a) the receipt of approximately $725 million,
representing the estimated net proceeds from the Public Offering and
the RenaissanceRe Investment based on an assumed initial public
offering price of $22.50 per Common Share (the midpoint of the range
stated on the front cover page), without giving effect to any exercise
of the underwriters', St. Paul's or RenaissanceRe's options to purchase
additional Common Shares, (b) the redemption of the Common Shares that
were issued at inception and capital contributed prior to the Public
Offering, (c) the payment of certain formation and organization
expenses, as discussed in Notes 2 and 12 to our consolidated balance
sheet, on pages F-5 and F-12 of this prospectus, which total $5.1
million, of which $2.1 million has been expensed as of June 30, 2002,
and (d) our entering into, and accruing for, the Services and Capacity
Reservation Agreement as of June 30, 2002. Additional formation and
organization expenses will be incurred prior to closing. It is further
assumed that the net proceeds from the Public Offering will be invested
in long-term, taxable fixed income securities.

2. Amounts representing the receipt of St. Paul's Cash Contribution of
$123 million (the midpoint of the $121 million to $126 million range
for the Cash Contribution) and the contribution of the Transferred
Business at historical cost in exchange for the issuance of Common
Shares and the St. Paul Option. Amounts related to net tangible assets
contributed to Platinum by St. Paul are recorded at St. Paul's book
value as of June 30, 2002. Assets as of June 30, 2002 include
approximately $5 million of net assets of Platinum US consisting of
cash and cash equivalents (which reflect a dividend of $15 million to
be paid, prior to the completion of the Public Offering, to United
States Fidelity and Guaranty Company, the current parent of Platinum
US) as well as approximately $7 million of tangible assets and other
intangible assets such as broker and customer lists and contract
renewal rights and licenses.

3. Amounts reflecting the receipt of approximately $120 million,
representing the estimated net proceeds from the ESU Offering and
recognition of the present value of future contract adjustment payments
payable on the purchase contracts contained within the equity security
units, without giving effect to any exercise of the underwriters'
option to purchase additional equity security units. It is further
assumed that the net proceeds from the ESU Offering will be invested in
long-term, taxable fixed income securities.

4. Amounts reflecting Platinum entering into the Quota Share Retrocession
Agreements with St. Paul Re reinsuring the Assumed Reinsurance
Contracts as of June 30, 2002.

PRO FORMA COMBINED STATEMENTS OF UNDERWRITING RESULTS FOR THE SIX MONTHS ENDED
JUNE 30, 2002 AND 2001, AND THE YEAR ENDED DECEMBER 31, 2001

We have prepared our unaudited pro forma combined statements of
underwriting results to represent our reinsurance business, as if we had
commenced our operations and the Public Offering, the ESU Offering, the St. Paul
Investment and the RenaissanceRe Investment had been completed as of January 1,
2001. Our presentation of our pro forma underwriting results assumes that all of
the Inception Agreements were entered into as of January 1, 2001. We have based
our presentation on St. Paul Re's actual underwriting results for the periods
presented. We have then adjusted these historical results to remove any of St.
Paul Re's reinsurance businesses that will not be part of Platinum following the
completion of this Public Offering, including

EX-2.1 145th Page of 301 TOC 1st Previous Next ↓Bottom Just 145th
previously underwritten in London. Platinum will not obtain the
renewal rights to these lines of business and will not assume
liabilities related to these lines of business, and Platinum's
management does not intend to write these lines of business in the
future, and

- amounts related to St. Paul Re's allocations from the St. Paul
corporate aggregate excess-of-loss reinsurance program that will
not be available to Platinum.

Except as noted above, the pro forma combined underwriting results assume that
all other retrocessional reinsurance with respect to the Assumed Reinsurance
Contracts entered into in 2002 will remain available to Platinum.

Our future results will depend in part on the amount of our investment
income, which cannot be predicted and which will fluctuate depending upon the
types of investments we select, our underwriting results and market factors.
Actual tax expense in future periods will be based on underwriting results plus
investment income and other income and expense items not reflected in the pro
forma combined statements of underwriting results. Our effective tax rate will
reflect the proportion of income recognized by our operating subsidiaries, with
Platinum US taxed at the U.S. corporate income tax rate (35%), Platinum UK taxed
at the U.K. corporate tax rate (generally 30%), Platinum Ireland taxed at a 25%
corporate tax rate on non-trading income and a 16% corporate tax rate on trading
income (the latter rate to be reduced to 12.5% as of January 1, 2003), and
Platinum Bermuda taxed at a zero corporate tax rate. In 2002, we expect to have
a greater portion of our income subject to U.S. taxation and U.K. taxation than
we expect to have in the future because our Bermuda operations are entirely new
but can be expected to grow as a proportion of our business. As a result of
changes in our geographic distribution of taxable income as well as changes in
the amount of our non-taxable income and expense, the relationship between our
reported income before tax and our income tax expense may change significantly
from one period to the next.

[Enlarge/Download Table]

SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2002 JUNE 30, 2001
---------------------------------------------- ----------------------------------------------
ADJUSTMENTS ADJUSTMENTS
HISTORICAL -------------------- PRO FORMA HISTORICAL --------------------- PRO FORMA
ST. PAUL RE (1) (2) (3) PLATINUM ST. PAUL RE (1) (2) (3) PLATINUM
----------- ----- ---- ---- --------- ----------- ------- ----- ----- ---------

NET PREMIUMS EARNED
Net premiums written .............. $ 663 $ (61) -- -- $ 602 $ 701 $(127) 2 -- $ 576
Change in unearned premiums,
net ............................. 19 (48) -- -- (29) (101) 14 (1) -- (88)
----- ----- ---- ---- ----- ------ ----- --- ---- -----
Net premiums earned ............. 682 (109) -- -- 573 600 (113) 1 -- 488

LOSSES AND UNDERWRITING
EXPENSES
Losses and loss adjustment
expenses ........................ 460 (110) -- -- 350 426 (82) -- -- 344
Policy acquisition expenses ....... 178 (34) -- -- 144 188 (39) -- -- 149
Other underwriting expenses ....... 35 (5) -- 4 34 42 (9) -- 4 37
----- ----- ---- ---- ----- ------ ----- --- ---- -----
Total underwriting losses
and expenses .................. $ 673 $(149) -- 4 $ 528 $ 656 $(130) -- 4 $ 530
----- ----- ---- ---- ----- ------ ----- --- ---- -----
UNDERWRITING GAIN (LOSS) ........ $ 9 $ 40 $ -- (4) $ 45 $ (56) $ 17 1 (4) $ (42)
===== ===== ==== ==== ===== ====== ===== === ==== =====

EX-2.1 146th Page of 301 TOC 1st Previous Next ↓Bottom Just 146th
YEAR ENDED DECEMBER 31, 2001

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ADJUSTMENTS
HISTORICAL ---------------------------------- PRO FORMA
ST. PAUL RE (1) (2) (3) PLATINUM
----------- ----- ----- ---- ----------
($ IN MILLIONS)

NET PREMIUMS EARNED
Net premiums written ....................... $ 1,677 $(228) $ (67) $ -- $ 1,382
Change in unearned premiums, net ........... (84) 4 -- -- (80)
------- ----- ----- ---- -------
Net premiums earned ...................... 1,593 (224) (67) -- 1,302

LOSSES AND UNDERWRITING EXPENSES
Losses and loss adjustment expenses ........ 1,922 (356) (126) -- 1,440
Policy acquisition expenses ................ 315 (78) -- -- 237
Other underwriting expenses ................ 82 (19) -- 6 69
------- ----- ----- ---- -------
Total losses and underwriting expenses.... 2,319 (453) (126) 6 1,746
------- ----- ----- ---- -------
UNDERWRITING GAIN (LOSS) ................. $ (726) $ 229 $ 59 $ (6) $ (444)
======= ===== ===== ==== =======

NOTES TO PRO FORMA COMBINED STATEMENTS OF UNDERWRITING RESULTS

The following describe amounts deducted in the "Adjustments" columns above:

1. Amounts related to St. Paul Re's reinsurance business representing
lines of business that will not be transferred to Platinum, including
aviation and bond and credit reinsurance, certain financial risk and
capital markets reinsurance products, and certain North American
business previously underwritten in London. Platinum will not obtain
the renewal rights to these lines of business and will not assume
liabilities related to these lines of business, and Platinum's
management does not intend to write these lines of business in the
future, and

2. Amounts related to St. Paul Re's allocations from St. Paul's corporate
aggregate excess-of-loss reinsurance program.

3. Amounts related to the Services and Capacity Reservation Agreement.

The St. Paul Option will be granted as part of the aggregate
consideration for St. Paul's Cash Contribution and its contribution of the
Transferred Business and its sponsorship of the Company, and is not being
granted in compensation for services. Similarly, the RenaissanceRe Option will
be granted to RenaissanceRe in its role as a strategic investor through the
RenaissanceRe Investment, and is not being granted in compensation for services.
Accordingly, no compensation expense related to these options is recognized in
Platinum's pro forma combined statements of underwriting results, nor will
compensation expense related to these options be recognized in Platinum's
consolidated financial statements following the completion of the Public
Offering. Following the completion of the Public Offering, Platinum will report
earnings per share on a basic and diluted basis. The diluted earnings per share
will reflect the dilutive effect of all dilutive instruments, including all
outstanding options to purchase Common Shares of the Company.

EX-2.1 147th Page of 301 TOC 1st Previous Next ↓Bottom Just 147th
The following presents a reconciliation of the amounts in Adjustment
column 1 to amounts in the Notes to Combined Statements of The St. Paul
Companies, Inc. Reinsurance Segment (Predecessor) (on page F-35 for the six
months ended June 30, 2002 and 2001, and on page F-25 for the year ended
December 31, 2001).

Reconciliation of amounts for the six months ended June 30, 2002 and
June 30, 2001:

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JUNE 30, 2002 JUNE 30, 2001
---------------------------------- -----------------------------
NET PREMIUMS UNDERWRITING NET PREMIUMS UNDERWRITING
EARNED RESULT EARNED RESULT
------------ ------------ ------------ ------------
($ IN MILLIONS)

Activity related to lines of business identified
by St. Paul to be exited including certain
foreign offices, plus allocation of St. Paul
corporate aggregate excess-of-loss
reinsurance program (per page F-35) ................. $ 167 $ (44) $ 177 $ (6)

Lines of business written in St. Paul's
closed foreign offices which St. Paul has
exited but which are being transferred to
Platinum as continuing business ..................... (58) 4 (64) (11)
------ ------- ------ ------
Pro forma adjustment related to lines of
business written by St. Paul Re that will
not be transferred to Platinum (per
page 53) ............................................ $ 109 $ (40) $ 113 $ (17)
====== ======= ====== ======

Reconciliation of amounts for the year ended December 31, 2001:

[Enlarge/Download Table]

NET PREMIUMS UNDERWRITING
EARNED RESULT
------------ ------------
($ IN MILLIONS)

Activity related to lines of business identified by St. Paul to be exited
including certain foreign offices, plus allocation of St. Paul corporate
aggregate excess-of-loss reinsurance program (per page F-25) ............................ $ 362 $ (318)

Portion of St. Paul corporate aggregate excess-of-loss reinsurance
program allocated to lines of business to be exited ..................................... (24) 20

Pro forma adjustment related to lines of business written by St. Paul Re
that will not be transferred to Platinum (per page 54) .................................. $ 224 $ (229)
====== ======

EX-2.1 148th Page of 301 TOC 1st Previous Next ↓Bottom Just 148th
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PRO FORMA FINANCIAL CONDITION
AND UNDERWRITING RESULTS

You should read the following pro forma discussion and analysis in
conjunction with our audited consolidated balance sheet and the related notes
included on pages F-3 through F-12 of this prospectus, as well as our unaudited
pro forma financial information and the related notes set forth under "Pro Forma
Financial Information". Our audited consolidated balance sheet and our unaudited
pro forma financial information have been prepared in accordance with U.S. GAAP.
The following pro forma discussion and analysis contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
materially from the results described or implied by the pro forma discussion and
analysis and these forward-looking statements. You should read the information
under "Risk Factors" beginning on page 22 of this prospectus for information
about material risks and uncertainties that affect our business.

OVERVIEW

Our objective is to provide property and casualty reinsurance coverages
to a diverse clientele of insurers and select reinsurers on a worldwide basis.
We will operate principally by using reinsurance brokers to market our products
and principally as a lead reinsurer on treaty reinsurance business. A
substantial majority of our business will be written as excess-of-loss
reinsurance. We intend to organize our worldwide reinsurance business around
three operating segments:

- GLOBAL PROPERTY AND MARINE. The Global Property and Marine
operating segment will include principally property and marine
reinsurance coverages. We intend to focus our underwriting
activities primarily on catastrophe excess-of-loss and per risk
excess-of-loss contracts. We intend to write other types of
property reinsurance as well, including selected property pro rata
reinsurance. This segment generated $315 million, or 22.8%, of
Platinum's 2001 pro forma net premiums written. Following the
completion of the Public Offering, we expect the proportion of our
net premiums written generated by the Global Property and Marine
segment to increase relative to 2001 levels.

- GLOBAL CASUALTY. The Global Casualty operating segment will
include principally general and automobile liability, professional
liability, workers' compensation, accident and health coverages
and casualty clash. We intend to focus our underwriting activities
primarily on excess-of-loss reinsurance coverages. This segment
generated $592 million, or 42.8%, of Platinum's 2001 pro forma net
premiums written. Following the completion of the Public Offering,
we expect the proportion of our net premiums written generated by
the Global Casualty segment to decrease relative to 2001 levels.

- FINITE RISK. The Finite Risk operating segment will include
principally non-traditional reinsurance treaties, including
multi-year excess-of-loss, aggregate stop loss, finite quota
share, loss portfolio transfer, and adverse loss development
contracts. We intend to provide clients, either directly or
through brokers, with customized solutions for their risk
management and other financial management needs. We intend to
focus our finite risk underwriting activities primarily on
multi-year excess-of-loss and aggregate stop loss reinsurance
treaties. Coverage classes within these products will primarily
include property, casualty and marine exposures. This segment
generated $475 million, or 34.4%, of Platinum's 2001 pro forma net
premiums written.

EX-2.1 149th Page of 301 TOC 1st Previous Next ↓Bottom Just 149th
BACKGROUND AND THE TRANSFERRED BUSINESS

St. Paul and its subsidiaries constitute one of the oldest insurance
organizations in the United States, dating back to 1853. Through its division
St. Paul Re, St. Paul has been engaged in the reinsurance business since 1983.
In December of 2001, in an effort to enhance the profitability of its
reinsurance business, St. Paul decided to narrow the product focus of its
reinsurance operations and exit certain lines of that business. As part of this
effort, St. Paul Re reduced its anticipated 2002 exposure and expenses by
exiting unprofitable lines of business and reducing the number of reinsurance
branch offices outside the U.S. The narrowing of reinsurance product lines
included exiting aviation, bond and credit reinsurance coverages, as well as
certain financial risk and capital markets lines. International branch office
closings included Munich, Brussels, Hong Kong, Sydney and Singapore. In addition
to curtailing various reinsurance operations, St. Paul's management decided that
its reinsurance business and its primary insurance business should ideally
operate as separate entities because of their different risk profiles and
business characteristics. As a result, contingent upon the completion of the
Public Offering, St. Paul will make the Cash Contribution and contribute the
Transferred Business through the arrangements described below:

- CASH CONTRIBUTION. At the completion of the Public Offering, St.
Paul will make the Cash Contribution in the amount of between $121
million and $126 million. The determination of the amount of the
Cash Contribution will be made when the terms of the Public
Offering are finally determined. An assumed Cash Contribution of
$123 million will result in a pro forma net tangible book value
per Common Share of $21.24 following the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment
based on an assumed initial public offering price of $22.50 per
Common Share (the midpoint of the range stated on the front cover
page) and assuming no exercise of the underwriters, St. Paul's or
RenaissanceRe's options to purchase additional Common Shares in
connection with the Public Offering or the underwriters' option to
purchase additional equity security units. Cash Contributions of
$121 million and $126 million will result in net tangible book
values of $20.76 and $21.71 per Common Share, respectively,
assuming initial public offering prices of $22.00 and $23.00,
respectively, and assuming no exercise of the underwriters'
options to purchase additional Common Shares or the underwriters'
option to purchase additional equity security units.

- RENEWAL OPPORTUNITIES AND COMMITMENTS. We will be acquiring from
St. Paul Re its existing customer lists and the right to seek to
renew substantially all of St. Paul Re's continuing reinsurance
contracts. We will also assume commitments, if any, of St. Paul Re
to offer reinsurance coverages in the future.

- ASSUMED REINSURANCE CONTRACTS. Through 100% quota share
retrocession agreements (the "Quota Share Retrocession
Agreements"), we will reinsure substantially all of the
reinsurance contracts St. Paul Re entered into on or after January
1, 2002, which we refer to as the "Assumed Reinsurance Contracts".
St. Paul Re will retain all of its reinsurance exposure not being
transferred to us and will administer the associated run-off.
Consequently, we will not assume any underwriting exposure with
respect to reinsurance contracts entered into by St. Paul prior to
January 1, 2002, except as noted below with respect to finite
reinsurance. St. Paul will also retain all liabilities relating to
the flooding in Europe in August 2002 and an intermediate layer of
liability for "named storms" in existence at the time of
completion of the Public Offering which cause insured damage
within ten days of such time, as described herein. We will receive
as consideration cash and other assets in an amount equal to the
aggregate of all loss reserves (excluding reserves relating to
liabilities retained by St. Paul), allocated loss adjustment
expense reserves, other reserves related to non-traditional
reinsurance treaties, ceding commission reserves and unearned
premium reserves, subject to agreed upon adjustments, and net of
ceding commissions under the Quota Share Retrocession Agreements
as of the transfer date. Underwriting gain or loss with respect to

EX-2.1 150th Page of 301 TOC 1st Previous Next ↓Bottom Just 150th
the Assumed Reinsurance Contracts for the period from January
1, 2002 to the transfer date will be retained by St. Paul.

- The terms of the Quota Share Retrocession Agreements
provide, with limited exceptions, that retrocessional
reinsurance purchased by St. Paul Re shall be for our
expense and shall inure to our benefit in respect of the
Assumed Reinsurance Contracts, providing us with
retrocessional reinsurance coverage for such contracts
through 2002 or the earlier termination or expiration of
the various retrocession agreements. We will bear all
the risk associated with non-payment by third party
retrocessionaires under such retrocessional reinsurance.
All the Quota Share Retrocession Agreements will take
effect as of 12:01 a.m., on the day immediately
following the date of the completion of the Public
Offering. Accordingly, while St. Paul will be
contractually committed to effect the transfer, the
effective time of the transfer of the Assumed
Reinsurance Contracts will occur after the sale to
investors of Common Shares in the Public Offering.

- In the case of business written in the U.S., we will
have the right to underwrite specified reinsurance
business on behalf of St. Paul for a period of one year
following the completion of the Public Offering in cases
where we are unable to underwrite that business
ourselves because, despite using our reasonable best
efforts, we have not obtained the necessary regulatory
license or approval to do so or we have not yet been
approved as a reinsurer by the cedent, and we will
reinsure such business pursuant to the Quota Share
Retrocession Agreements. In the case of the U.K.
business, until the earlier of the first anniversary of
the completion of the Public Offering, or Platinum UK
obtaining the required license, we will have the right
to underwrite specified reinsurance business on behalf
of St. Paul, and we will reinsure such business pursuant
to the Quota Share Retrocession Agreements. This will
allow us to continue to participate in reinsurance
business which is bound after the completion of the
Public Offering without any delay occasioned by the
start-up of our operations, including the lack of
required licenses, and facilitate the transition of St.
Paul Re's business to us.

- For a period of three years following the completion of
the Public Offering, we will underwrite on behalf of St.
Paul, with the consent of St. Paul, renewals of in-force
contracts of finite reinsurance. St. Paul will retrocede
to us 100% of the unpaid and future losses under
currently in-force contracts and we will have the option
to reinsure losses under certain renewed contracts and
will be required to offer to reinsure losses under other
renewed contracts for a fair market retrocession premium
pursuant to the Quota Share Retrocession Agreements.
Under the Quota Share Retrocession Agreements, a portion
of future premiums will be applied to settle balances
related to prior year experience for the benefit of St.
Paul. St. Paul will have an option to renew this
arrangement with us for a subsequent period of two
years. In the U.K., this arrangement will be limited to
finite treaties which St. Paul Re has entered into with
a small number of identified cedents and any further
finite treaties which may be entered into on behalf of
St. Paul Re UK prior to the first anniversary of the
completion of the Public Offering.

- RELATED ASSETS. We will be acquiring from St. Paul tangible and
intangible assets relating to the continuing businesses being
transferred to us, including furniture and equipment, systems and
software, assignments of leases, licenses and other assets as well
as all of the outstanding capital stock of Platinum US.

- EMPLOYEES. Upon or following the completion of the Public
Offering, we expect to employ approximately 150 employees
previously employed by St. Paul Re.

The Public Offering and the transactions contemplated thereby were
first announced to the public on April 25, 2002. Platinum believes St. Paul Re's
withdrawal from certain business may have adversely affected premiums written
during 2002 prior to the public announcement of the Public

EX-2.1 151st Page of 301 TOC 1st Previous Next ↓Bottom Just 151st
Offering. Management is unable to predict how the Public Offering's announcement
will affect premiums written in the future. See "Risk Factors".

OUR DRIVERS OF PROFITABILITY

REVENUES

We expect to derive our revenues from two principal sources, premiums
from our reinsurance business and income from our investment portfolio.
Reinsurance premiums are a function of the amount and type of contracts we write
as well as prevailing market prices. There are many types of reinsurance
contracts with unique pricing, terms and conditions and expected profit margins.
Therefore, changes in the amount of premiums we will write may not be an
accurate indicator of our anticipated profitability.

We expect our investment income to be a function of the average assets
in our portfolio and the average yield that we earn on those assets. The
investment yield will be a function of market interest rates as well as the
credit quality and maturity or our invested assets. In addition, we could
realize capital gains or losses on our investment portfolio as a result of
changing market conditions, including, but not limited to, changes in market
interest rates and changes in the market's perception of the credit quality of
our invested assets. We intend to earn investment income primarily on the assets
invested in our portfolio, but we may also earn revenue from investment income
on premium and loss deposits withheld by our clients.

EXPENSES

We expect that our expenses will consist primarily of two types of
expenses, loss and loss adjustment expenses, or "LAE", and operating and
administrative costs. Loss and loss adjustment expenses will be a function of
the amount and type of reinsurance contracts we will write. We will initially
record loss and loss adjustment expenses based on an actuarial analysis of the
estimated losses we expect to incur on each contract written. The ultimate loss
and loss adjustment expenses will depend on the actual costs to settle these
claims. We intend to increase or decrease our initial loss estimates as actual
losses occur. Our ability to estimate loss and loss adjustment expenses
accurately at the time of pricing our contracts will be a critical factor in
determining our profitability.

Operating and administrative costs are expected to consist primarily of
acquisition expenses, which are commission and brokerage fees paid to
intermediaries for the production of premiums written, excise taxes and other
underwriting expenses, overhead costs, interest expense and income taxes. We
expect our acquisition expenses to consist principally of ceding commissions
paid to cedents and brokerage commissions that represent a percentage of the
premiums on reinsurance contracts written. We expect that acquisition expenses
will be a function of the amount and types of contracts written. Overhead costs
are expected to consist primarily of salaries and related costs. These costs
will be primarily fixed in nature and will not vary with the amount of premiums
written. Interest expense (including payments on the senior notes forming part
of the equity security units) will be a function of outstanding borrowing or
funding commitments (such as letter of credit agreements) and the contractual
interest rate related to these commitments. Income taxes will be a function of
our profitability and the tax rate in the various jurisdictions in which we do
business.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in the notes to
Platinum Holdings' audited consolidated balance sheet. The following is a
summary of the critical accounting policies that will affect our future
financial performance: premiums, reserves, reinsurance and investments.

EX-2.1 152nd Page of 301 TOC 1st Previous Next ↓Bottom Just 152nd
PREMIUMS

Premiums will be recorded at the inception of each policy, based upon
information received from ceding companies and their brokers. For excess-of-loss
contracts, the amount of premium is usually contractually documented at
inception, and no management judgment is necessary in accounting for this.
Premiums are earned on a pro rata basis over the coverage period. For
proportional treaties, the amount of premium is normally estimated at inception
by the ceding company. We will account for such premium using the initial
estimates, and then adjust them once a sufficient period for actual premium
reporting has elapsed. For the year ended December 31, 2001, the pro forma
premiums written resulting from estimate accruals were less than 25% of total
premiums written. We will also accrue for reinstatement and additional premiums
resulting from losses. Such accruals will be based upon actual contractual
terms, and the only element of management judgment involved is with respect to
the amount of loss reserves, as described below.

Reinstatement and additional premiums are written at the time a loss
event occurs where coverage limits for the remaining life of the contract are
reinstated under pre-defined contract terms. Reinstatement premiums are the
premiums charged for the restoration of the reinsurance limit of a catastrophe
contract to its full amount after payment by the reinsurer of losses as a result
of an occurrence. These premiums relate to the future coverage obtained during
the remainder of the initial policy term, and are earned over the remaining
policy term. Additional premiums are premiums charged after coverage has
expired, related to experience during the policy term, which are earned
immediately.

RESERVES

Under U.S. GAAP, we will not be permitted to establish loss reserves
until the occurrence of an event which may give rise to a loss. Once such an
event occurs, we will establish reserves based upon estimates of total losses
incurred by the ceding insurers as a result of the event and our estimate of the
portion of such loss we have reinsured. As a result, only loss reserves
applicable to losses incurred up to the reporting date may be set aside, with no
allowance for the provision of a contingency reserve to account for expected
future losses. Losses arising from future events will be estimated and
recognized at the time the loss is incurred and could be substantial.

Setting appropriate reserves for loss and loss adjustment expenses is
an inherently uncertain process. Loss reserves will represent our estimates, at
a given point in time, of ultimate settlement and adjustment costs of losses
incurred (including incurred but not reported, or IBNR, losses, which are losses
that have been sustained but not yet reported to the insurer). We will regularly
review and update these estimates, using the most current information available
to us. Consequently, the ultimate liability for a loss is likely to differ from
the original estimate. Whenever we determine that any existing loss reserves are
inadequate, we are required to record such change in estimate; increasing the
loss reserves with a corresponding reduction, which could be material, in our
operating results in the period in which the deficiency is identified.
Adjustments resulting from changes in our estimates will be reflected in current
income. The establishment of new reserves, or the adjustment of reserves for
reported claims, could result in significant upward or downward changes to our
financial condition or results of underwriting in any particular period.

The reserve for losses and loss adjustment expenses will be based upon
reports, individual case estimates received from ceding companies and
management's estimates. Management's estimates are used mostly to estimate IBNR
loss amounts. For certain catastrophic events, there is considerable uncertainty
underlying the assumptions and associated estimated reserves for losses and loss
adjustment expenses. Reserves will be reviewed regularly and, as experience
develops and additional information becomes known, the reserves will be adjusted
as necessary. Such changes in estimate, if necessary, will be reflected in
results of operations in the current period. We currently intend to make
arrangements to permit us to discount the liability for certain assumed

EX-2.1 153rd Page of 301 TOC 1st Previous Next ↓Bottom Just 153rd
reinsurance contracts using rates based on our return on invested assets or, in
many cases, on yields contractually guaranteed to us on funds held by the ceding
company.

Generally, reserves are established without regard to whether we may
subsequently contest the loss. We expect our policy to be to establish reserves
for reported losses based upon reports received from ceding companies,
supplemented by our reserve estimates.

REINSURANCE

Written premiums (which are total premiums for a given period), earned
premiums (which are the portion of written premiums which applies to the expired
portion of the policy period), incurred losses (which are total losses, whether
paid or unpaid) and LAE reflect the net effects of assumed and ceded reinsurance
transactions. Reinsurance accounting is followed for assumed and ceded
transactions when risk transfer requirements have been met. These requirements
involve significant assumptions being made relating to the amount and timing of
expected cash flows, as well as the interpretation of underlying contract terms.
Reinsurance contracts that do not transfer significant insurance risk are
required to be accounted for as deposits. These deposits are accounted for as
financing transactions, with interest expense credited to the contract deposit.
Premiums received on retroactive reinsurance contracts are not reflected in the
statement of operations, but rather are recorded in the consolidated balance
sheet as an increase to loss and loss adjustment expenses reserves for the
liabilities assumed and as assets based on the consideration received. A
deferred charge or credit is recorded for any difference between liabilities
assumed and consideration received.

INVESTMENTS

In accordance with our investment guidelines, our investments will
initially consist of high-grade marketable fixed income securities. We may, in
the future, elect to invest a portion of our funds in marketable equity
securities. Investments will be carried at estimated fair value as determined by
the most recently traded price of each security as of the balance sheet date.
Unrealized gains and losses on our investments will be included as a separate
component of shareholders' equity. Realized gains and losses on sales of
investments will be determined on a specific identification basis. In addition,
unrealized depreciation in the value of individual securities considered by
management to be other than temporary will be charged to income in the period it
is determined. Investment income will be recorded when earned and will include
the amortization of premiums and discounts on investments. For a more detailed
discussion, see "Business--Our Business--Investments".

FORMATION OF PLATINUM HOLDINGS AND PRESENTATION OF PRO FORMA FINANCIAL
INFORMATION AND HISTORICAL ST. PAUL RE COMBINED FINANCIAL INFORMATION

FORMATION OF PLATINUM HOLDINGS

In connection with our formation, we have agreed with St. Paul and
certain of its affiliates to enter into the Inception Agreements. They will
become effective contingent upon the completion of the Public Offering (except
the Quota Share Retrocession Agreements which will take effect at 12:01 A.M., on
the day immmediately following the date of the completion of the Public
Offering) and will govern our relationship with St. Paul thereafter with respect
to various intercompany arrangements and services. The principal terms of these
agreements are summarized under "Certain Relationships and Related Transactions"
in this prospectus.

EX-2.1 154th Page of 301 TOC 1st Previous Next ↓Bottom Just 154th
PRESENTATION OF PRO FORMA FINANCIAL INFORMATION AND ST. PAUL RE COMBINED
FINANCIAL INFORMATION

As a newly formed company, we have no actual results of operations. In
this prospectus, we are therefore presenting pro forma financial information of
Platinum Holdings with respect to the reinsurance business which St. Paul will
be transferring to us under the terms of the Inception Agreements, contingent
upon the completion of the Public Offering. This pro forma financial information
is intended, under the various assumptions discussed in more detail under "Pro
Forma Financial Information", to illustrate the performance of our business as
if the Public Offering, the ESU Offering, the St. Paul Investment and the
RenaissanceRe Investment had been completed and we had commenced our operations
as of January 1, 2001.

We are also presenting the historical combined financial information of
St. Paul Re. For a detailed discussion of the historical underwriting results of
St. Paul Re, see "The Predecessor Business".

We caution that the Platinum pro forma consolidated balance sheet and
pro forma combined underwriting results presented herein are not indicative of
the actual results that we may achieve once we commence operations. Many factors
may cause our actual results to differ materially from these pro forma
consolidated balance sheet and results including, but not limited to, the
following:

- Platinum's pro forma combined statement of underwriting results
includes premium and loss development on business entered into
prior to January 1, 2002. Under the Quota Share Retrocession
Agreements, we are assuming no premium or loss development on
business entered into prior to January 1, 2002. Therefore, our
reported premiums written and earned and reported losses and loss
adjustment expenses in our initial years of operation could be
substantially lower than as presented in Platinum's pro forma
combined statement of underwriting results. As such, our reported
results in our initial years of operation will not be subject to
prior year development for periods prior to January 1, 2002.

- Although we expect to continue to be afforded the benefits of most
of St. Paul Re's retrocessional reinsurance program through their
expiration in 2002, we may enter into retrocessional reinsurance
contracts with significantly different terms and conditions from

EX-2.1 155th Page of 301 TOC 1st Previous Next ↓Bottom Just 155th
those that have been made available to us from St. Paul Re and
which form the basis of our initial operations.

EXPOSURE TO CATASTROPHES

As with other reinsurers, our operating results and financial condition
can be adversely affected by volatile and unpredictable natural and man-made
disasters, such as hurricanes, windstorms, earthquakes, floods, fires, riots and
explosions. Although we will attempt to limit our exposure to acceptable levels,
it is possible that an actual catastrophic event or multiple catastrophic events
could have a material adverse effect on our financial condition, results of
operations and cash flows. As noted above under "--Critical Accounting
Policies", under U.S. GAAP, we are not permitted to establish loss reserves
until the occurrence of an event which may give rise to a claim. Once such an
event occurs, we will establish reserves based upon estimates of total losses
incurred by the ceding insurers as a result of the event and our estimate of the
portion of such loss we have insured. As a result, only loss reserves applicable
to losses incurred up to the reporting date may be set aside, with no allowance
for the provision of a contingency reserve to account for expected future
losses. Losses arising from future events will be estimated and recognized at
the time the loss is incurred and could be substantial.

INCOME TAX

Except in Bermuda, we will be subject to local income tax requirements
in the jurisdictions in which we operate. The income tax expense reflected in
our pro forma financial statements therefore reflects a number of different
local tax rates, and as a result may change from one period to the next
depending on both the amount and the geographic distribution of our taxable
income. Actual tax expense in future periods will be based on underwriting
results plus investment income and other income and expense items not reflected
in the Pro Forma Consolidated Statements of Underwriting Results. Our effective
tax rate will reflect the proportion of income recognized by our operating
subsidiaries with Platinum US taxed at the U.S. corporate income rate (35%),
Platinum UK taxed at the U.K. corporate tax rate (generally 30%), Platinum
Ireland taxed at the Irish corporate tax rate (25% on non-trading income and 16%
on trading income, the latter rate to be reduced to 12.5% as of January 1,
2003), and Platinum Bermuda taxed at a zero corporate tax rate. In 2002, we
expect to have a greater portion of our income subject to U.S. taxation and U.K.
taxation than we expect to have in the future because our Bermuda operations are
entirely new but can be expected to grow as a proportion of our business over
time. As a result of changes in our geographic contribution of taxable income as
well as changes in the amount of our non-taxable income and expense, the
relationship between our reported income before tax and our income tax expense
may change significantly from one period to the next.

PRO FORMA COMBINED UNDERWRITING RESULTS OF PLATINUM HOLDINGS

The following table summarizes our pro forma combined underwriting
results for the six months ended June 30, 2002 and 2001, and for the year ended
December 31, 2001, as if the Public Offering,

EX-2.1 156th Page of 301 TOC 1st Previous Next ↓Bottom Just 156th
the ESU Offering, the St. Paul Investment and the RenaissanceRe Investment had
been completed on January 1, 2001. For a discussion of the historical results of
underwriting of St. Paul Re, see "The Predecessor Business".

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
----------------------------- DECEMBER 31,
2002 2001 2001
---------- -------------- ------------
($ IN MILLIONS)

NET PREMIUMS EARNED
Net premiums written ............................................. $ 602 $ 576 $ 1,382
Change in unearned premiums, net ................................. (29) (88) (80)
---------- ---------- -----
Net premiums earned ............................................ 573 488 1,302
---------- ---------- -----
LOSSES AND UNDERWRITING EXPENSES
Losses and loss adjustment expenses .............................. 350 344 1,440
Policy acquisition expenses ...................................... 144 149 237
Other underwriting expenses ...................................... 34 37 69
---------- ---------- -----
Total losses and underwriting expenses ........................... $ 528 $ 530 1,746
---------- ---------- -----
Underwriting gain (loss) ....................................... $ 45 $ (42) $ (444)
========== ========== =====
Selected Ratios - U.S. GAAP
Loss and loss adjustment expense ratio ........................... 61.2% 70.6% 110.6%
Underwriting expense ratio ....................................... 31.1% 38.1% 23.5%
---------- ---------- -----
Combined ratio ................................................... 92.3% 108.7% 134.1%
========== ========== =====
Selected Ratios - Statutory
Loss and loss adjustment expense ratio ........................... 61.2% 70.6% 110.6%
Underwriting expense ratio ....................................... 29.6% 32.3% 22.1%
---------- ---------- -----
Combined ratio ................................................... 90.8% 102.9% 132.7%
========== ========== =====
Impact of catastrophes on combined ratio (1) ................... (3.0)% 3.7% 40.9%
========== ========== =====

------------------
(1) Excludes ceded losses under St. Paul Re's aggregate excess-of-loss
treaties, because such treaties extend to non-catastrophic as well as
catastrophic losses as described below. The 3% benefit from
catastrophes on the June 30, 2002 combined ratio is driven by a lack of
catastrophes in the first six months of 2002 and favorable loss
development in 2002 on catastrophe losses incurred in prior years.

Included in the 2001 pro forma combined underwriting results are
pre-tax losses related to the September 11, 2001 terrorist attack totaling $468
million. This amount includes gross losses and loss adjustment expenses of $819
million, $123 million of ceded reinsurance, $137 million of additional and
reinstatement premiums and $91 million of reduced contingent commission
expenses. The determination of the impact of catastrophes on the combined ratio
excludes the ceded losses under St. Paul Re's aggregate excess-of-loss treaty;
this treaty which remains available to Platinum in 2002 (unless earlier
terminated pursuant to its terms), provides coverage for excess losses arising
from catastrophic and non-catastrophic events.

RETROCESSIONAL REINSURANCE

Our pro forma combined underwriting results for the six months ended
June 30, 2002 and 2001, and for the year ended December 31, 2001 reflect the
benefits of most of St. Paul Re's retrocessional reinsurance program as it
relates to Platinum. The pro forma results do not reflect the effects of the St.
Paul corporate aggregate excess-of-loss reinsurance program, which will not be
available to Platinum in 2002 or thereafter. St. Paul Re has utilized
retrocession agreements principally to increase aggregate premium capacity and
to reduce the risk of loss on reinsurance underwritten. In addition, through St.
Paul Re's aggregate excess-of-loss treaties, St. Paul Re has maintained
catastrophe reinsurance programs for the purpose of limiting its exposure with
respect to multiple claims arising from a single occurrence or event. St. Paul
Re's retrocession agreements

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provide for recovery of a portion of claims and claims expense from
retrocessionnaires. Under these programs, on a pro forma basis, St. Paul Re
ceded the following amounts to retrocessionaires:

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
----------------------------- DECEMBER 31,
2002 2001 2001
---------- --------------- ------------
($ IN MILLIONS)

Ceded premiums written ............................................. $ 42 $ 70 $ 167
Ceded premiums earned .............................................. 25 65 165
Ceded losses and loss adjustment expenses .......................... (27) 105 368
Ceded underwriting expenses ........................................ 4 3 8
---------- ---------- ----------
Net underwriting benefit (detriment) ............................. $ (48) $ 43 $ 211
========== ========== ==========

The amounts in the pro forma underwriting results on pages 64 and 69 of this
prospectus include the retrocession amounts reflected above.

The amounts included in the pro forma underwriting results on page 70
of this prospectus as well as the individual segment discussions on pages 71 to
76 of this prospectus, include the retrocession amounts reflected above, less
the following impacts of St. Paul Re's aggregate excess-of-loss treaties as they
relate to Platinum:

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
----------------------------- DECEMBER 31,
2002 2001 2001
---------- ---------- ------------
($ IN MILLIONS)

Ceded premiums written ............................................. $ 7 $ 37 $ 87
Ceded premiums earned .............................................. (1) 36 87
Ceded losses and loss adjustment expenses .......................... (21) 78 194
---------- ---------- ----------
Net underwriting benefit (detriment) ............................. $ (20) $ 42 $ 107
========== ========== ==========

Under the terms of St. Paul Re's aggregate excess-of-loss treaties, St.
Paul Re remits an initial margin premium in quarterly installments to its
counterparty, regardless of whether losses are ceded under the treaty. If losses
are ceded under these treaties, St. Paul Re remits additional premiums ceded,
plus accrued interest, to its counterparty when the related losses and loss
adjustment expenses are settled. For the six months ended June 30, 2002, no
losses were ceded under the 2002 treaty. Net underwriting detriment in the 2002
six-month period is driven by commutations in such period requested by one
retrocessionnaire of its ten percent portion of the 1999 and 2001 St. Paul Re
aggregate excess-of-loss treaties. In the six month period ending June 30, 2002
these commutations resulted in a reduction in ceded written and earned premiums
of $11 million and a reduction in ceded losses and loss adjustment expenses
incurred of $25 million, resulting in a net underwriting detriment of $14
million. These commutations were done in conjunction with the commutation of a
reinsurance treaty underwritten by St. Paul Re for the same party which resulted
in a net underwriting benefit of $10 million. The combined effect of these
commutations resulted in a net underwriting detriment of $4 million. The impact
of these commutations is not expected to be material to future operations or
financial position. The additional net underwriting detriment is due to $6
million of ceded premium pursuant to the St. Paul Re aggregate excess of loss
treaty with respect to the 2002 accident year.

EX-2.1 158th Page of 301 TOC 1st Previous Next ↓Bottom Just 158th
PRO FORMA COMBINED UNDERWRITING RESULTS

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30,
2001

Net premiums

Net premiums written for the six-month period ended June 30, 2002
increased 4.5% to $602 million from $576 million for the six-month period ended
June 30, 2001, including $242 million, or 40.2%, from the Global Casualty
segment, $212 million, or 35.2%, from the Global Property and Marine segment and
$148 million, or 24.6%, from the Finite Risk segment. The increase in premium is
due to rate increases averaging 29% across all lines of business offset by
decreases in exposures as a result of the re-underwriting of the core book of
business. In addition, a large quota share contract was rescinded at a cost to
us of $56 million, adversely affecting net written premiums. The large quota
share contract was a three year quota share reinsurance contract incepting in
1999. The coverage for 2001 was rescinded by mutual agreement with the ceding
company.

Net premiums earned for the six months ended June 30, 2002 increased
17.4% to $573 million from $488 million for the six months ended June 30, 2001,
reflecting the impact of price increases partly offset by the decrease in
exposure.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred were $350 million in the
six months ended June 30, 2002 compared to $344 million in the six months ended
June 30, 2001. The small increase as compared to the increase in earned premium
is attributable to favorable development in prior underwriting years as well as
increased rates impacting the current underwriting year. Favorable catastrophe
development resulted in a benefit of $17 million in the six months ended June
30, 2002 and catastrophe losses resulted in an expense of an $18 million
detriment in the six months ended June 30, 2001 due to the Midwest storms and
Hurricane Allison. The loss and loss adjustment expense ratio, also referred to
as loss ratio (which is the ratio of losses and loss adjustment expenses
incurred, including estimates for claims incurred but not reported, to premiums
earned) was 61.2% and 70.6% for the six months ended June 30, 2002 and 2001,
respectively. Catastrophe loss development had a favorable impact on loss ratios
for the six months ended June 30, 2002 of 3.0% and catastrophe losses had an
unfavorable impact of 3.7% for the six months ended June 30, 2001.

Acquisition expenses

Acquisition expenses were $144 million for the six month period ended
June 30, 2002 compared to $149 million for the six month period ended June 30,
2001. The resulting acquisition expense ratio was 25.1% for the six months ended
June 30, 2002 compared to 30.4% for the six months ended June 30, 2001. The
reduction in the expense ratio of 5.3% was attributable to lower commission and
brokerage costs across the portfolio primarily due to an increase in writings in
our Global Property segment, which carries lower commission and brokerage costs.

Other underwriting expenses

Other underwriting expenses consisted of the cost of operations
associated with underwriting activities. These expenses include compensation,
rent and all other general expenses associated with our underwriting activity
and exclude any investment or claim related expense. Other underwriting expenses
were $34 million for the six month period ended June 30, 2002 and $37 million
for the six month period ended June 30, 2001. The other underwriting expense
ratio for the six months ended June 30, 2002 was 6.0% compared to 7.7% for the
six month period ended June 30, 2001. The decrease was attributable to the
growth in premiums earned together with a

EX-2.1 159th Page of 301 TOC 1st Previous Next ↓Bottom Just 159th
decrease in underwriting expenses, principally compensation related due to a
reduction of employees.

YEAR ENDED DECEMBER 31, 2001

Net premiums

Net premiums written for the year ended December 31, 2001 totaled
$1,382 million, including $592 million, or 42.8%, from the Global Casualty
segment, $315 million, or 22.8%, from the Global Property and Marine segment and
$475 million, or 34.4%, from the Finite Risk segment. Included in net premiums
written for the period were $137 million in additional and reinstatement
premiums, principally as a result of losses under finite reinsurance treaties,
primarily related to the September 11, 2001 terrorist attack. Net premiums
earned for the full year 2001 were $1,302 million.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred totaled $1,440 million for
the year ended December 31, 2001, which included loss and loss adjustment
expense payments of $652 million and a net increase in reserves for unpaid
losses and loss adjustment expenses of $788 million.

For the year ended December 31, 2001, pre-tax catastrophe losses net of
reinsurance totaled $744 million, of which $696 million resulted from the
September 11, 2001 terrorist attack. The majority of the remaining $48 million
of catastrophe losses in 2001 were the result of a variety of storms throughout
the year in the U.S., and the explosion of a chemical manufacturing plant in
Toulouse, France.

The reported loss ratio of 110.6% for the year ended December 31, 2001
included a 46.7 percentage point detriment from losses incurred in the terrorist
attack (not including the effects of St. Paul Re's aggregate excess-of-loss
treaties). The reported loss ratio for the year ended December 31, 2001 also
included a benefit from St. Paul Re's aggregate excess-of-loss treaties.

St. Paul Re's actual estimated losses for the September 11, 2001
terrorist attack were based on a variety of actuarial techniques, coverage
interpretations and claims estimation methods. They included an estimate of
losses incurred but not reported, and an estimate of costs related to the
settlement of claims. The estimate of St. Paul Re's losses is also based on its
belief that property-casualty insurance losses from the terrorist attack will
total between $30 billion and $35 billion for the insurance industry. While the
estimate of industry losses is subject to significant uncertainties and may
change over time as additional information becomes available, Platinum will not
be subject to the impact of any loss development associated with the terrorist
attack in that reinsurance contracts which gave rise to the terrorist attack
losses are not included in the Assumed Reinsurance Contracts and Platinum is not
assuming any liability for prior period losses.

The estimated net pre-tax operating loss as a result of the terrorist
attack totaled $468 million, consisting of the following components:

[Enlarge/Download Table]

YEAR ENDED
DECEMBER 31, 2001
-----------------
($ IN MILLIONS)

Gross losses and loss adjustment expenses ................................. $ 819
Reinsurance recoverables .................................................. (123)
Additional and reinstatement premiums ..................................... (137)
Reduction in reinsurance contingent commission expense .................... (91)
--------
Total estimated pretax operating loss .................................. $ 468
========

EX-2.1 160th Page of 301 TOC 1st Previous Next ↓Bottom Just 160th
The estimated net pre-tax operating loss of $468 million related to the
terrorist attack would have been distributed among Platinum's intended business
segments as follows:

[Enlarge/Download Table]

YEAR ENDED
DECEMBER 31, 2001
-----------------
($ IN MILLIONS)

Global Property & Marine ................................................ $ 307
Global Casualty ......................................................... 32
Finite Risk ............................................................. 129
--------
Total ................................................................ $ 468
========

Acquisition expenses

Acquisition expenses were $237 million for the year ended December 31,
2001. The acquisition expenses were reduced by $91 million related to contingent
commissions that are no longer payable as a result of the losses caused by the
terrorist attack of September 11, 2001. This resulted in a 10.0 percentage point
benefit resulting from the contingent commission adjustment described above. The
resulting acquisition expense ratio, that is, acquisition expenses expressed as
a percentage of earned premium, was 18.2% for the year ended December 31, 2001.

Other underwriting expenses

Other underwriting expenses were $69 million for the year ended
December 31, 2001. This resulted in an other underwriting expense ratio of 5.3%
for the year ended December 31, 2001.

EX-2.1 161st Page of 301 TOC 1st Previous Next ↓Bottom Just 161st
PRO FORMA UNDERWRITING RESULTS BY OPERATING SEGMENT

The following table summarizes pro forma underwriting results and
combined ratios for each of our three operating segments for the six months
ended June 30, 2002 and 2001, and the year ended December 31, 2001.

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
----------------------------- DECEMBER 31,
2002 2001 2001
---------- ------------- ------------
($ IN MILLIONS)

GLOBAL PROPERTY & MARINE
Net premiums written ............................................. $ 212 $ 168 $ 315

Net premiums earned .............................................. 187 132 311
Losses and loss adjustment expenses ............................. 78 43 399
Underwriting expenses ............................................ 52 48 96
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ 57 $ 41 $ (184)
========== ========== ==========
Combined ratio ................................................... 69.5% 68.9% 159.2%
========== ========== ==========

GLOBAL CASUALTY
Net premiums written ............................................. $ 242 $ 284 $ 592

Net premiums earned .............................................. 239 230 521
Losses and loss adjustment expenses .............................. 198 226 460
Underwriting expenses ............................................ 75 84 191
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ (34) $ (80) $ (130)
========== ========== ==========
Combined ratio ................................................... 114.3% 134.6% 125.0%
========== ========== ==========

FINITE RISK
Net premiums written ............................................. $ 148 $ 124 $ 475

Net premiums earned .............................................. 147 126 470
Losses and loss adjustment expenses .............................. 74 75 581
Underwriting expenses ............................................ 51 54 19
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ 22 $ (3) $ (130)
========== ========== ==========
Combined ratio ................................................... 85.4% 102.2% 127.5%
========== ========== ==========

TOTAL
Net premiums written ............................................. $ 602 $ 576 $ 1,382

Net premiums earned .............................................. 573 488 1,302
Losses and loss adjustment expenses .............................. 350 344 1,440
Underwriting expenses ............................................ 178 186 306
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ 45 $ (42) $ (444)
========== ========== ==========
Loss and loss adjustment expense ratio .......................... 61.2% 70.6% 110.6%
Underwriting expense ratio ....................................... 31.1% 38.1% 23.5%
---------- ---------- ----------

Combined ratio ................................................... 92.3% 108.7% 134.1%
========== ========== ==========

The following table summarizes pro forma underwriting results and
combined ratios, excluding the impact of St. Paul Re's aggregate excess-of-loss
treaties and the impact of the September 11,

EX-2.1 162nd Page of 301 TOC 1st Previous Next ↓Bottom Just 162nd
2001 terrorist attack, for each of our three operating segments for the six
months ended June 30, 2002 and 2001, and the year ended December 31, 2001:

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
----------------------------- DECEMBER 31,
2002 2001 2001
---------- ------------- ------------
($ IN MILLIONS)

GLOBAL PROPERTY & MARINE
Net premiums written ............................................. $ 215 $ 196 $ 356

Net premiums earned .............................................. 187 159 352
Losses and loss adjustment expenses .............................. 71 100 194
Underwriting expenses ............................................ 52 48 96
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ 64 $ 11 $ 62
========== ========== ==========
Combined ratio ................................................... 65.8% 93.1% 82.4%
========== ========== ==========
GLOBAL CASUALTY
Net premiums written ............................................. $ 248 $ 288 $ 611

Net premiums earned .............................................. 241 234 540
Losses and loss adjustment expenses .............................. 196 240 468
Underwriting expenses ............................................ 74 83 191
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ (29) $ (89) $ (119)
========== ========== ==========
Combined ratio ................................................... 112.3% 138.1% 122.1%
========== ========== ==========
FINITE RISK
Net premiums written ............................................. $ 146 $ 129 $ 365

Net premiums earned .............................................. 144 131 360
Losses and loss adjustment expense ............................... 62 83 276
Underwriting expenses ............................................ 52 54 110
---------- ---------- ----------
Underwriting gain (loss) ......................................... $ 30 $ (6) $ (26)
========== ========== ==========
Combined ratio ................................................... 78.9% 104.8% 107.1%
========== ========== ==========
TOTAL
Net premiums written ............................................... $ 609 $ 613 $ 1,332

Net premiums earned ................................................ 572 524 1,252
Losses and loss adjustment expenses ................................ 329 423 938
Underwriting expenses .............................................. 178 185 397
---------- ---------- ----------
Underwriting gain (loss) ........................................... $ 65 $ (84) $ (83)
========== ========== ==========
Loss and loss adjustment expense ratio ............................. 57.6% 80.7% 74.9%
Underwriting expense ratio ......................................... 31.1% 35.3% 31.7%
---------- ---------- ----------
Combined ratio ..................................................... 88.7% 116.0% 106.6%
========== ========== ==========

The following provides a more detailed discussion of the pro forma
underwriting results for our three operating segments. To provide a more
meaningful analysis of the underlying performance of our business segments,
discussion of segment results excludes the impact of St. Paul Re's aggregate
excess-of-loss treaties and the impact of the September 11, 2001 terrorist
attack.

EX-2.1 163rd Page of 301 TOC 1st Previous Next ↓Bottom Just 163rd
GLOBAL PROPERTY AND MARINE

The Global Property and Marine operating segment will include
principally property and marine reinsurance coverages. We intend to focus our
underwriting activities primarily on catastrophe and excess-of-loss per risk
contracts. We intend to write other types of property reinsurance as well,
including selected property pro rata insurance. The following table summarizes
the pro forma underwriting results of Platinum's Global Property and Marine
segment for the six months ended June 30, 2002 and 2001, and the year ended
December 31, 2001. The underwriting results exclude the impact of St. Paul Re's
aggregate excess-of-loss treaties and the impact of the September 11, 2001
terrorist attack.

[Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
------------------------ DECEMBER 31,
2002 2001 2001
--------- --------- ------------
($ IN MILLIONS)

Net premiums written...................... $ 215 $ 196 $ 356
Net premiums earned....................... 187 159 352
Losses and loss adjustment expenses....... 71 100 194
Underwriting expenses..................... 52 48 96
--------- --------- ----------
Underwriting gain (loss).................. $ 64 $ 11 $ 62
========= ========= ==========
Loss and loss adjustment expense ratio.... 37.9% 62.7% 55.1%

Underwriting expense ratio................ 27.9% 30.4% 27.3%
--------- --------- ----------
Combined ratio............................ 65.8% 93.1% 82.4%
========= ========= ==========

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30,
2001

Net premiums

Net premiums written in the Global Property and Marine segment for the
six month period ended June 30, 2002 increased 9.7% to $215 million from $196
million for the six month period ended June 30, 2001. This increase was the
result of significant price increases averaging 36%, offset by decreased
exposures through re-underwriting efforts across all lines of business.

Net premiums written in the Global Property and Marine segment included
$164 million in excess-of-loss reinsurance contracts and $51 million in
proportional contracts.

Net premiums written in the Global Property and Marine segment grew
7.6% in the U.S. to $113 million for the six months ended June 30, 2002 compared
to $105 million in the U.S. for the six months ended June 30, 2001. Net premiums
written in the Global Property and Marine segment increased 12.1% outside the
U.S. to $102 million for the six months ended June 30, 2002 compared to $91
million outside the U.S. in the six months ended June 30, 2001. These increases
reflected the impact of price increases offset by the decrease in exposure.

Net premiums earned for the six months ended June 30, 2002 were
impacted by the same factors as written premiums and increased by 17.6% to $187
million from $159 million for the six month period ended June 30, 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred by Global Property and
Marine segment were $71 million in the six months ended June 30, 2002 compared
to $100 million in the six months ended June 30, 2001. The decrease in the six
months ended June 30, 2002 was principally attributable to the absence of
catastrophe losses and the favorable development of prior year catastrophes. The
Global Property and Marine segment's loss ratio was 37.9% and 62.7% for the six
month periods ending June 30, 2002 and 2001, respectively. The absence of
catastrophe losses in 2002, as well as favorable loss development from prior
period catastrophes, resulted in a benefit of $14 million for the six months

EX-2.1 164th Page of 301 TOC 1st Previous Next ↓Bottom Just 164th
ended June 30, 2002. For the six months ended June 30, 2001 catastrophe losses
totaled $18 million mainly due to Hurricane Allison and the Midwest storms in
2001.

Underwriting expenses

Acquisition costs associated with the Global Property and Marine
segment were $37 million for the six month period ended June 30, 2002 compared
to $31 million for the six month period ended June 30, 2001. After deferring
those costs related to the unearned portions of net premiums written, the
resulting acquisition expense ratio was 20.0% for the six months ended June 30,
2002 compared to 19.4% for the six months ended June 30, 2001. The increase in
the expense ratio of 0.6% was attributable to higher commission and brokerage
costs reflecting an increase in proportional business, which carries a higher
commission and brokerage ratio. Other underwriting expenses of the Global
Property and Marine segment, including direct and allocated underwriting
expenses were $15 million for the six month period ended June 30, 2002 and $17
million for the six month period ended June 30, 2001. The other underwriting
expense ratio for the Global Property and Marine segment for the six months
ended June 30, 2002 was 7.9% compared with 11.0% for the six month period ended
June 30, 2001. The decrease in the other underwriting expense ratio was
attributable to the increase in written premiums and a decrease in other
underwriting expenses, mainly compensation related due to a reduction of
employees.

YEAR ENDED DECEMBER 31, 2001

Net premiums

Net premiums written in the Global Property and Marine segment for the
year ended December 31, 2001 totaled $356 million. Net premium volume in 2001
reflected the benefit of strong rate increases throughout the segment. Price
increases accelerated as the year progressed, particularly in the aftermath of
the September 11, 2001 terrorist attack.

Net premiums written in the Global Property and Marine segment in the
U.S. totaled $196 million in 2001. Net premiums written in the Global Property
and Marine segment for ceding companies outside the U.S. totaled $160 million in
2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred for the Global Property
and Marine segment totaled $194 million for the year ended December 31, 2001.
Losses and loss adjustment expenses incurred for the year ended December 31,
2001 included loss and loss adjustment expense payments of $190 million and a
net increase in reserves for unpaid losses and loss adjustment expenses of $4
million.

Underwriting expenses

Acquisition costs for the Global Property and Marine segment were $66
million for the year ended December 31, 2001, after deferring those costs
related to the unearned portion of premiums written. The resulting acquisition
expense ratio was 18.7% for the year ended December 31, 2001. Other underwriting
expenses of the Global Property and Marine segment, including direct and
allocated underwriting expenses during 2001, totaled $30 million, resulting in
an other underwriting expense ratio of 8.6%.

GLOBAL CASUALTY

The Global Casualty operating segment will include principally general
and automobile liability, professional liability, workers' compensation,
accident and health coverages and casualty clash. We intend to focus our
underwriting activities primarily on excess-of-loss reinsurance coverages. The
following table summarizes the pro forma underwriting results of Platinum's
Global Casualty segment for the periods covered by this discussion. As with the
discussion of the Global Property and Marine segment, the underwriting results
below for the six months ended June 30, 2002 and 2001, and for the year ended
December 31, 2001 exclude the impact of St. Paul Re's aggregate excess-of-loss
treaties and the impact of the September 11, 2001 terrorist attack.

EX-2.1 165th Page of 301 TOC 1st Previous Next ↓Bottom Just 165th
[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
-------------------------- DECEMBER 31,
2002 2001 2001
---------- ---------- ------------
($ IN MILLIONS)

Net premiums written......................... $ 248 $ 288 $ 611

Net premiums earned.......................... 241 234 540
Losses and loss adjustment expenses.......... 196 240 468
Underwriting expenses........................ 74 83 191
---------- ---------- -----------

Underwriting gain (loss)..................... $ (29) $ (89) $ (119)
========== ========== ===========

Loss and loss adjustment expense ratio....... 81.4% 102.5% 86.7%
Underwriting expense ratio................... 30.9% 35.6% 35.4%
---------- ---------- -----------
Combined ratio............................... 112.3% 138.1% 122.1%
========== ========== ===========

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30,
2001

Net premiums

Net premiums written in the Global Casualty segment for the six month
period ended June 30, 2002 decreased 13.9% to $248 million from $288 million for
the six month period ended June 30, 2001. The decrease in net premiums written
was primarily due to the re-underwriting of the portfolio including the
rescission of a large quota share contract and a decrease in proportional
reinsurance. The large quota share contract was a three year quota share
reinsurance contract incepting in 1999. As a result of the strategic initiative
to improve profitability and focus on core lines of business, the coverage for
2001 was rescinded by mutual agreement with the ceding company. These decreases
to the portfolio were offset by significant rate increases on renewal business
averaging 30% across the portfolio.

Net premiums written in the Global Casualty segment included $202
million in excess-of-loss reinsurance contracts and $46 million in proportional
contracts.

Net premiums written in the Global Casualty segment declined 10.7% in
the U.S. to $208 million for the six months ended June 30, 2002 compared to $233
million in the U.S. in the six months ended June 30, 2001. Net premiums written
in the Global Casualty segment declined 27.3% outside the U.S. to $40 million
for the six months ended June 30, 2002 compared to $55 million outside the U.S.
in the six months ended June 30, 2001. The decreases reflect the rescission of
the large quota share contract offset by rate increases achieved on renewal
business.

Net premiums earned for the six months ended June 30, 2002 were
impacted by the same factors as net premiums written and increased by 3.0% to
$241 million from $234 million for the six month period ended June 30, 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred in the Global Casualty
segment were $196 million in the six months ended June 30, 2002 compared to $240
million in the six months ended June 30, 2001. The decrease is attributable to
favorable development in prior underwriting years as well as increased rates
impacting the current underwriting year. The Global Casualty segment's loss
ratio was 81.4% and 102.5% for the six month periods ended June 30, 2002 and
2001, respectively.

EX-2.1 166th Page of 301 TOC 1st Previous Next ↓Bottom Just 166th
Underwriting expenses

Acquisition costs associated with the Global Casualty segment were $61
million for the six month period ended June 30, 2002 compared to $69 million for
the six month period ended June 30, 2001, after deferring those costs related to
the unearned portion of premiums written. The resulting acquisition expense
ratio was 25.5% for the six months ended June 30, 2002 compared to 29.8% for the
six months ended June 30, 2001. The reduction in the acquisition expense ratio
of 4.3% was attributable to better terms and conditions negotiated with our
ceding companies. Other underwriting expenses of the Global Casualty segment,
including direct and allocated underwriting expenses, were $13 million for the
six month period ended June 30, 2002 and $14 million for the six month period
ended June 30, 2001. The other underwriting expense ratio for the six months
ended June 30, 2002 was 5.4% compared to 5.8% for the six month period ended
June 30, 2001. The decrease in the other underwriting expense ratio was
attributable to a decrease in expenses, principally compensation related due to
a reduction of employees.

YEAR ENDED DECEMBER 31, 2001

Net premiums

Net premiums written in the Global Casualty segment for 2001 included
$454 million in excess-of-loss reinsurance contracts and $157 million in
proportional contracts. Net premium volume reflected the benefit of significant
price increases for substantially all coverages in the segment.

Net premiums written in the Global Casualty segment for ceding
companies in the U.S. totaled $501 million in 2001. Net premiums written in the
Global Casualty segment for ceding companies outside the U.S. was $110 million
in 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred for the Global Casualty
segment totaled $468 million for the year ended December 31, 2001. Loss and loss
adjustment expenses incurred for the year ended December 31, 2001 included loss
and loss expense payments of $310 million and a net increase in reserves for
unpaid losses and loss adjustment expenses of $158 million.

Underwriting expenses

Acquisition costs for the Global Casualty segment were $163 million for
the year ended December 31, 2001. After deferring those costs related to the
unearned portion of net premiums written, the resulting acquisition expense
ratio was 30.2% for the year ended December 31, 2001. Other underwriting
expenses of the Global Casualty segment, including direct and allocated
underwriting expenses during 2001 totaled $28 million, resulting in an other
underwriting expense ratio of 5.2%.

FINITE RISK

The Finite Risk operating segment will include principally
non-traditional reinsurance treaties, including multi-year excess-of-loss,
aggregate stop loss, finite quota share, loss portfolio transfer, and adverse
loss development contracts. We intend to provide clients, either directly or
through brokers, with customized solutions for their risk management and other
financial management needs. We intend to focus our finite risk underwriting
activities primarily on multi-year excess-of-loss and aggregate stop loss
reinsurance treaties. Coverage classes within these products will primarily
include property, casualty, marine and/or whole account property and casualty
exposures. The following table summarizes results for the Finite Risk segment
for the periods covered by this discussion. As with the discussion of our other
operating segments, the pro forma underwriting results below for the six months
ended June 30, 2002 and 2001, and for the year ended

EX-2.1 167th Page of 301 TOC 1st Previous Next ↓Bottom Just 167th
December 31, 2001 exclude the impact of St. Paul Re's aggregate excess-of-loss
treaties and the impact of the September 11, 2001 terrorist attack.

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
---------------------- DECEMBER 31,
2002 2001 2001
------- --------- ------------
($ IN MILLIONS)

Net premiums written........................... $ 146 $ 129 $ 365

Net premiums earned............................ 144 131 360
Losses and loss adjustment expenses............ 62 83 276
Underwriting expenses.......................... 52 54 110
------- --------- ----------

Underwriting gain (loss)....................... $ 30 $ (6) $ (26)
======= ========= ==========
Loss and loss adjustment expense ratio......... 43.4% 63.5% 76.6%
Underwriting expense ratio..................... 35.5% 41.3% 30.5%
------- --------- ----------
Combined ratio................................. 78.9% 104.8% 107.1%
======= ========= ==========

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30,
2001

Net premiums

Net premiums written in the Finite Risk segment for the six month
period ended June 30, 2002 increased 13.2% to $146 million from $129 million for
the six month period ended June 30, 2001. The increase in premiums written in
the six months ended June 30, 2002 compared with the six months ended June 30,
2001 was due to one large finite quota share contract written in the fourth
quarter of 2001 that has significant premium in calendar year 2002.

Net premiums written in the Finite Risk segment grew 27.5% in the U.S.
to $88 million for the six months ended June 30, 2002 compared to $69 million in
the U.S. in the six months ended June 30, 2001. Net premiums written in the
Finite Risk segment decreased 3.3% outside the U.S. to $58 million for the six
months ended June 30, 2002 compared to $60 million outside the U.S. for the six
months ended June 30, 2001. The increase in U.S. business is due to the rate
increases achieved on renewal business after the September 11, 2001 terrorist
attack on the United States.

Net premiums earned for the six months ended June 30, 2002 were
impacted by the same factors as net premiums written and increased by 9.9% to
$144 million from $131 million for the six month period ended June 30, 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred in the Finite Risk segment
were $62 million for the six months ended June 30, 2002 compared to $83 million
in the six months ended June 30, 2001. The decrease from the six months ended
June 30, 2001 was principally attributable to the commutation of an assumed
aggregate stop loss treaty and the absence of large losses. The commutation of
this treaty resulted in a net gain of $10 million. In the six months ended June
30, 2001, the Petrobras oil platform collapse impacted losses by $11 million.
The Finite Risk segment's loss ratio was 43.4% and 63.5% for the six month
periods ended June 30, 2002 and 2001, respectively.

Underwriting expenses

Acquisition costs associated with the Finite Risk segment were $46
million for the six month period ended June 30, 2002 compared to $48 million for
the six month period ended June 30, 2001. After deferring those costs related to
the unearned portion of net premiums written, the

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resulting acquisition expense ratio was 31.5% for the six months ended June 30,
2002 compared to 36.8% for the six months ended June 30, 2001. The reduction in
the expense ratio of 5.3 percentage points was attributable to lower commission
and brokerage costs across the portfolio. Other underwriting expenses of the
Finite Risk segment, including direct and allocated underwriting expenses, were
$6 million for the six month period ended June 30, 2002 and $6 million for the
six month period ended June 30, 2001. The other underwriting expense ratio for
the six months ended June 30, 2002 was 4.0% compared to 4.5% for the six month
period ended June 30, 2001. The decrease in the other underwriting expense ratio
was attributable to the increase in net premiums written.

YEAR ENDED DECEMBER 31, 2001

Net Premiums

Net premiums written in the Finite Risk segment for ceding companies in
the U.S. totaled $204 million in 2001. Net premiums written in the Finite Risk
segment for ceding companies outside the U.S. totaled $161 million in 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred for the Finite Risk
segment totaled $276 million for the year ended December 31, 2001. Loss and loss
adjustment expenses incurred for the year ended December 31, 2001 included loss
and loss expense payments of $153 million and a net increase in reserves for
unpaid losses and loss adjustment expenses of $123 million.

Underwriting expenses

Acquisition costs for the Finite Risk segment were $99 million for the
year ended December 31, 2001. After deferring those costs related to the
unearned portion of net premiums written, the resulting acquisition expense
ratio was 27.6% for the year ended December 31, 2001.

Other underwriting expenses of the Finite Risk segment, including
direct and allocated underwriting expenses during 2001, totaled $11 million,
resulting in an other underwriting expense ratio of 2.9%.

LIQUIDITY AND CAPITAL RESOURCES

Platinum Holdings is a holding company that will conduct no reinsurance
operations of its own. All its reinsurance operations will be conducted through
its wholly owned operating subsidiaries Platinum US (which it will own through
Platinum Ireland and Platinum Finance), Platinum UK (which it will own through
Platinum Ireland) and Platinum Bermuda. As a holding company, Platinum Holdings'
cash flow will consist primarily of dividends, interest and other permissible
payments from its subsidiaries. Platinum Holdings will depend on such payments
to receive funds for general corporate purposes and to meet its obligations,
including the payment of any dividends to its shareholders.

OUR LIQUIDITY REQUIREMENTS

Our principal consolidated cash requirements are expected to be the
payment of dividends to Platinum Holdings' shareholders, the servicing of debt
(including interest payments on the senior notes and contract adjustment
payments on the purchase contracts included in the equity security units issued
in the concurrent ESU Offering), the acquisition of and investment in
businesses, capital expenditures, premiums retroceded and payment of losses and
loss adjustment expenses, policy benefits, brokerage commissions, excise taxes
and operating expenses.

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We intend to pay quarterly dividends of $ per Common Share beginning in
the first quarter 2003, subject to the recommendation of our Board of Directors.
Our dividends, if any, will be paid by us in U.S. dollars. Our dividend policy
in future periods will depend on a number of factors including our results of
operations, our financial condition, our capital and cash requirements, general
business conditions, legal, contractual and regulatory restrictions regarding
the payment of dividends by us and other factors. See "Dividend Policy".

We will operate a treasury function responsible for managing our future
banking relationships, capital raising activities including equity and debt
issues, our overall cash, cash pooling and liquidity positions and the payment
of internal and external dividends. Our subsidiaries will be responsible for
managing local cash and liquidity positions.

OUR SOURCES OF CASH

Our sources of funds are expected to consist of premiums written,
losses recovered from retrocedents, investment income and proceeds from sales
and redemptions of investments.

In addition, we have entered into a 364 day committed credit facility
with a group of banks that will permit us to make borrowings of up to $100
million in the aggregate from time to time. The credit facility contains various
covenants and agreements, including a requirement that we satisfy specified
tangible net worth and leverage ratios. It is a condition to our ability to
borrow under the credit facility that we have received not less than $825
million of aggregate proceeds (net of the underwriters' discount) from the sale
of our Common Shares in the Public Offering, the RenaissanceRe Investment and
the Cash Contribution. Assuming an initial public offering price of $22.00 per
Common Share (the low end of the range stated on the front cover page), a Cash
Contribution of $121 million and proceeds of $83 million from the RenaissanceRe
Investment, and assuming no exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares in connection with
the Public Offering, we expect to receive aggregate net proceeds of
approximately $829 million from the Public Offering, the Cash Contribution and
the RenaissanceRe Investment. We may not raise net proceeds in such amount, and
if we fail to do so we will be unable to borrow under the facility. In addition,
we may not be able to extend or replace this credit facility upon satisfactory
terms when it terminates on June 20, 2003. Failure to satisfy the conditions to
borrowing under our credit facility, or to extend or replace it when it expires,
would limit Platinum Holdings' liquidity to the net proceeds of the Public
Offering, the RenaissanceRe Investment and the Cash Contribution retained by it
and dividends, if any, received from Platinum US, Platinum UK and Platinum
Bermuda unless we arrange for other sources of liquidity.

RESTRICTIONS ON DIVIDEND PAYMENTS FROM OUR OPERATING SUBSIDIARIES

Bermuda. Bermuda legislation imposes limitations on the dividends that
Platinum Bermuda may pay. Under the Bermuda Insurance Act, Platinum Bermuda will
be required to maintain a specified solvency margin and a minimum liquidity
ratio and will be prohibited from declaring or paying any dividends if doing so
would cause Platinum Bermuda to fail to meet its solvency margin and its minimum
liquidity ratio. Under the Bermuda Insurance Act, Platinum Bermuda will be
prohibited from paying dividends of more than 25% of its total statutory capital
and surplus at the end of the previous fiscal year unless it files an affidavit
stating that the declaration of such dividends has not caused it to fail to meet
its solvency margin and minimum liquidity ratio. The Bermuda Insurance Act will
also prohibit Platinum Bermuda from declaring or paying dividends without the
approval of the Supervisor of Insurance of Bermuda if Platinum Bermuda failed to
meet its solvency margin and minimum liquidity ratio on the last day of the
previous fiscal year. Additionally, under the Companies Act, Platinum Bermuda
may declare or pay a dividend only if it has no reasonable grounds for believing
that it is, or would after the payment, be unable to pay its liabilities as they
become due, or that the realizable value of its assets would thereby be less
than

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the aggregate of its liabilities and its issued share capital and share premium
accounts. See "Business--Regulation--Bermuda".

United States. Platinum US is subject to regulation by the State of
Maryland. Under Maryland insurance law, Platinum US may pay dividends out of
surplus, provided it must give the Maryland Insurance Commissioner at least
thirty days' prior notice before paying an "extraordinary dividend" or making an
"extraordinary distribution". Extraordinary dividends and extraordinary
distributions are dividends or distributions which, together with any other
dividends and distributions paid during the immediately preceding twelve-month
period, would exceed the lesser of

(1) ten percent of Platinum US's statutory policyholders' surplus (as
determined under statutory accounting principles) as of December
31 of the prior year and

(2) Platinum US's net investment income excluding realized capital
gains (as determined under statutory accounting principles) for
the twelve-month period ending on December 31 of the prior year,
plus any amounts of net investment income (excluding realized
capital gains) in the three preceding years which have not been
distributed.

These statutory limitations are subject to change. Platinum US may not pay
extraordinary dividends or make extraordinary distributions until either the
thirty-day notice period has expired (without the Maryland Insurance
Commissioner disapproving such payment) or the Maryland Insurance Commissioner
has approved the payment within that period. Extraordinary dividends and
extraordinary distributions may only be paid out of earned surplus.

In addition, Platinum US must give ten days' prior notice to the
Maryland Insurance Commissioner of its intention to pay any dividend or make any
distribution other than an extraordinary dividend or extraordinary distribution.
The Maryland Insurance Commissioner has the right to prevent payment of such a
dividend or such a distribution if he determines, in his discretion, that after
the payment thereof Platinum US's policyholders' surplus would be inadequate or
could cause Platinum US to be in a hazardous financial condition.

As it is not engaged in the insurance business, Platinum Finance is not
subject to the restrictions on dividend payments or distributions set forth
above.

United Kingdom. U.K. law prohibits Platinum UK from declaring a
dividend to its stockholders unless it has "profits available for distribution".
The determination of whether a company has profits available for distribution is
based on its accumulated realized profits less its accumulated realized losses.
While the United Kingdom insurance regulatory laws impose no statutory
restrictions on a general insurer's ability to declare a dividend, the insurance
regulator in the United Kingdom strictly controls the maintenance of each
insurance company's solvency margin within its jurisdiction and may restrict
Platinum UK from declaring a dividend at a level which the regulator determines
would adversely affect Platinum UK's solvency requirements. It is common
practice in the United Kingdom to notify the regulator in advance of any
significant dividend payment.

Ireland. Platinum Ireland is currently a holding company incorporated
under the laws of Ireland. Irish law prohibits Platinum Ireland from declaring a
dividend to its stockholders unless it has "profits available for distribution"
as determined under Irish law. As Platinum Ireland is not currently a regulated
entity, there are no insurance or other regulatory laws applicable to the
payment of dividends by Platinum Ireland.

ESTABLISHMENT OF LOSS RESERVES BY OUR INSURANCE SUBSIDIARIES

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contingency reserve to account for expected future losses. Losses arising from
future events will be estimated and recognized at the time the loss is incurred
and could be substantial.

Setting appropriate reserves for loss and loss adjustment expenses is
an inherently uncertain process. Loss reserves will represent our estimates, at
a given point in time, of ultimate settlement and adjustment costs of losses
incurred (including incurred but not reported, or IBNR, losses). We will
regularly review and update these estimates, using the most current information
available to us. Consequently, the ultimate liability for a loss will likely
differ from the original estimate. Whenever we determine that any existing loss
reserves are inadequate, we are required to increase the loss reserves with a
corresponding reduction, which could be material, in our operating results in
the period in which the deficiency is identified. The establishment of new
reserves, or the adjustment of reserves for reported claims, could result in
significant upward or downward changes to our financial condition or results of
operations in any particular period.

FUNCTIONAL CURRENCY

Our functional currency will be the U.S. dollar. Our operating currency
will generally also be the U.S. dollar. However, premiums receivable and losses
payable in respect of a portion of our business will be denominated in
currencies of other countries, principally the industrialized countries.
Consequently, we may, from time to time, experience currency exchange gains and
losses that could affect our financial position and results of operations. We do
not expect to and as a practical matter will not be able to hedge our non-U.S.
dollar currency exposure with respect to potential loss until a loss payable in
a non-U.S. dollar currency occurs, after which we may match such liability with
assets denominated in the same currency or enter into forward purchase contracts
for specific currencies. This type of exposure could be substantial. We also do
not intend to hedge our non-U.S. dollar currency exposure with respect to
premiums receivable, which will be generally collected over the relevant
contract term. We expect to exchange non-U.S. dollar denominated premiums upon
receipt. We may make foreign currency investments, generally for the purpose of
improving overall portfolio yield.

INVESTMENT OF FUNDS

With the exception of cash holdings, our funds will be primarily
invested initially in fixed income securities, the market value of which is
subject to fluctuation depending on changes in prevailing interest rates. We may
in the future elect to also invest a portion of our funds in marketable equity
securities. We expect to hedge our investment portfolio against interest rate
risk. Nevertheless, an increase in interest rates may result in losses, both
realized and unrealized, on our investments.

We do not expect our investment portfolio to include options, warrants,
swaps, collars or similar derivative instruments. Our investment policy
guidelines will provide that financial futures and options and foreign exchange
contracts may not be used in a speculative manner, but may be used, subject to
certain numerical limits, only as part of a defensive strategy to protect the
market value of the portfolio. Also, we do not expect our portfolio to contain
any investments in real estate or mortgage loans.

POSTING OF SECURITY BY OUR NON-U.S. OPERATING SUBSIDIARIES

Platinum UK and Platinum Bermuda are not licensed, approved or
accredited as reinsurers anywhere in the United States and therefore, under the
terms of most of their contracts in the United States, they will have to provide
security to reinsureds to cover unpaid liabilities in a form acceptable to state
insurance commissioners. Typically, this type of security will take the form of
a letter of credit issued by an acceptable bank, the establishment of a trust,
or a cash advance. Platinum UK and Platinum Bermuda are expected to obtain
letters of credit through commercial banks. In turn, Platinum UK and Platinum
Bermuda will provide the banks security by giving the banks liens over certain
of Platinum UK's and Platinum Bermuda's investments.

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CAPITAL EXPENDITURES; INFLATION

None of Platinum Holdings, Platinum US, Platinum UK and Platinum
Bermuda will have any material commitments for capital expenditures upon the
completion of the Public Offering.

Platinum US, Platinum UK and Platinum Bermuda will estimate the effect
of inflation on their business and reflect these estimates in the pricing of
their reinsurance contracts when estimating reserves. The actual effects of
inflation on the results of the operating subsidiaries cannot be accurately
known until claims are ultimately settled. Levels of inflation also affect
investment returns.

EXPOSURES TO MARKET RISK

Market risk can be described as the risk of change in fair value of a
financial instrument due to changes in interest rates, equity prices,
creditworthiness, foreign exchange rates or other factors. We seek to mitigate
that risk by a number of actions, as described below.

INTEREST RATE RISK

Our exposure to market risk for changes in interest rates will be
concentrated in our investment portfolio once we commence operations. Changes in
investment values attributable to interest rate changes will be mitigated,
however, by corresponding and partially offsetting changes in the economic value
of our insurance reserves. This exposure will be monitored through periodic
reviews of our consolidated asset and liability positions. Estimates of cash
flows, as well as the impact of interest rate fluctuations relating to the
investment portfolio and insurance reserves, will be modeled and reviewed
periodically.

CREDIT RISK

Our investment portfolio is expected to include initially fixed
maturities and short-term investments, which will be subject to credit risk.
This risk is defined as the potential loss in market value resulting from
adverse changes in the borrower's ability to repay the debt. Our investment
objective will be to earn competitive relative returns by investing in a
diversified portfolio of securities. Credit risk will be actively managed
through stringent review and analysis of the creditworthiness of all potential
investments.

We will also have other receivable amounts subject to credit risk. The
most significant of these are reinsurance recoverables. To mitigate the risk of
these counterparties' nonpayment of amounts due, we will establish business and
financial standards for reinsurer approval, incorporating ratings by major
rating agencies and considering then-current market information.

EQUITY PRICE RISK

Our investment portfolio may in the future include marketable equity
securities, which will be carried on our consolidated balance sheet at market
value. These securities have exposure to price risk, which is defined as the
potential loss in market value resulting from an adverse change in prices. If we
invest in equity securities, our objective with respect to such investments will
be to earn competitive relative returns by investing in a diverse portfolio of
high-quality, liquid securities. Portfolio characteristics are expected to be
analyzed regularly and market risk will be actively managed through a variety of
modeling techniques. If we invest in equity securities, our holdings are
expected to be diversified across industries, and concentrations in any one
company or industry will be limited by parameters established by senior
management, as well as by statutory requirements.

FOREIGN CURRENCY EXPOSURE

Our exposure to market risk for changes in foreign exchange rates will
be concentrated in our insurance reserves denominated in foreign currencies. In
addition, there may be foreign currency exposure in our investment portfolio
related to those investments that are denominated in foreign currencies. Cash
flows from foreign operations are expected to be the primary source of funds for
purchases of investments denominated in foreign currencies. Those investments
will be purchased primarily to hedge insurance reserves and other liabilities
denominated in the same currency, effectively reducing foreign currency exchange
rate exposure at the Platinum consolidated level.

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BUSINESS

INDUSTRY OVERVIEW

GENERAL

Reinsurance is an arrangement in which an insurance company, referred
to as the reinsurer, agrees to assume from another insurance company, referred
to as the ceding company, all or a portion of the insurance risks that the
ceding company has underwritten under one or more insurance contracts. In
return, the reinsurer receives a premium for the insured risks that it assumes
from the ceding company. Reinsurance, however, does not discharge the ceding
company from its liabilities to policyholders. Reinsurance provides ceding
insurers with three principal benefits: a reduction in net liability on
individual risks, catastrophe protection from large or multiple losses and
assistance in maintaining acceptable financial ratios. Reinsurance also provides
a ceding company with additional underwriting capacity by permitting it to
accept larger risks and write more business than would be possible without an
accompanying increase in capital and surplus.

During the period between the time premiums are received by the
reinsurer and the time that the reinsurer must pay losses and loss adjustment
expenses, the reinsurer has an opportunity to invest the funds received as
premiums, less expenses. This investment activity can make a significant
contribution to a reinsurer's profitability.

TYPES OF REINSURANCE

PROPERTY AND CASUALTY REINSURANCE

Reinsurance is typically classified into two categories, property and
casualty, or non-life, reinsurance and life reinsurance. We intend to write
property and casualty reinsurance. We do not currently intend to write any life
reinsurance.

Property insurance protects an insured against financial loss arising
out of the loss of property caused by an insured peril. Examples of property
reinsurance are property catastrophe and property per-risk coverages. Property
catastrophe insurance protects an insured against losses arising out of multiple
claims for a single event while property per-risk insurance protects an insured
against loss arising out of a single claim for a single event.

Casualty insurance protects an insured against financial loss arising
out of loss or damage to persons other than the insured or property belonging to
a third party. Examples of casualty insurance are general and automobile
liability, professional liability, workers' compensation, and accident and
health.

Although property reinsurance involves a high degree of volatility,
property reinsurance claims are generally reported soon after the event giving
rise to the claim and tend to be assessed and paid relatively expeditiously. In
comparison, there tends to be a greater time lag between the occurrence,
reporting and payment of casualty reinsurance claims. Additionally, as compared
with property reinsurance, casualty reinsurance tends to involve greater
diversity of exposures and variation in contract terms, pose greater challenges
in capturing underwriting information and casualty reinsurance results are also
more likely to be affected by the claims handling process.

EXCESS-OF-LOSS AND PROPORTIONAL REINSURANCE

Reinsurance can be written on either an excess-of-loss basis or a pro
rata, or proportional, basis. We expect that a substantial majority of the
reinsurance we will underwrite will be excess-of-loss reinsurance.

In the case of excess-of-loss reinsurance, the reinsurer, in return for
a negotiated premium, assumes all or a specified portion of the ceding company's
risks in excess of a specified amount, which amount is referred to as the ceding
company's retention or the reinsurer's attachment point,

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subject to a negotiated reinsurance contract limit. For example, property
catastrophe excess-of-loss reinsurance provides coverage to a primary insurer
when aggregate losses and loss adjustment expenses from a single occurrence of a
peril covered under a portfolio of primary insurance contracts written by the
primary insurer exceed the attachment point specified in the reinsurance
contract with the primary insurer. Property per-risk excess-of-loss-reinsurance
provides coverage to a primary insurer in excess of its retention level on a
single risk. A risk in this context might mean the insurance coverage on a
single property location. Because a reinsurer providing excess-of-loss
reinsurance does not assume a direct proportion of the ceding company's risk,
the premiums that the ceding company pays to the reinsurer are not directly
proportional to the premiums that the ceding company receives. Instead,
excess-of-loss reinsurance contracts provide a reinsurer flexibility in
determining premiums at specific retention levels, independent of the premiums
charged by primary insurers, and based upon its own underwriting assumptions.

Excess-of-loss property and casualty reinsurance is often written in
layers. One or a group of reinsurers accepts the risk just above the ceding
company's retention up to a specified amount, at which point another reinsurer
or a group of reinsurers accepts the excess liability up to an additional
specified limit or the excess liability reverts to the ceding company. The
reinsurer taking on the risk just above the ceding company's retention is
typically said to write lower layer excess reinsurance. Lower layers are also
referred to as working layers. A claim that reaches just beyond the ceding
company's retention will create a claims payment for the lower layer reinsurer,
but not for the reinsurers of any higher layers. In a limited number of cases,
reinsurance is also written on an aggregate stop-loss basis to protect the
ceding company's total portfolio from extraordinary losses resulting from the
aggregation of individual risks.

In the case of proportional reinsurance, the reinsurer assumes a
predetermined portion of the ceding company's risks under the covered insurance
contract or contracts. The frequency of claims under a proportional reinsurance
contract is usually greater than under an excess-of-loss contract. Premiums that
the ceding company pays to a reinsurer for proportional reinsurance are a
predetermined portion of the premiums that the ceding company receives from its
insured, consistent with the proportional sharing of risk. In addition, in
proportional reinsurance, the reinsurer generally pays the ceding company a
ceding commission. The ceding commission is usually based on the ceding
company's cost of generating the business being reinsured, which includes
commissions, premium taxes and assessments of the ceding company's own operating
expenses. A profit commission or increased ceding commission may be included and
paid to the ceding company if the loss experience is profitable. The ceding
commission may also be affected by competitive factors.

TREATY AND FACULTATIVE REINSURANCE

Reinsurance can be written either through treaty or facultative
reinsurance arrangements. In treaty reinsurance, the ceding company cedes, and
the reinsurer assumes, a specified portion of a type or category of risks
insured by the ceding company. In facultative reinsurance, the ceding company
cedes, and the reinsurer assumes, all or part of a specific risk or risks. We
plan to underwrite substantially all treaty reinsurance, and we do not expect to
underwrite facultative reinsurance except in very limited and opportunistic
circumstances.

Generally in the industry, treaty reinsurers do not separately evaluate
each of the individual risks assumed under their treaties and are largely
dependent on the original risk underwriting decisions made by the ceding
company's underwriters. Accordingly, reinsurers will carefully evaluate the
ceding company's risk management and underwriting practices, as well as claims
settlement practices and procedures, in deciding whether to provide treaty
reinsurance and in appropriately pricing the treaty.

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Generally, reinsurers who provide facultative reinsurance do so
separately from their treaty operations. Facultative reinsurance normally is
purchased by ceding companies for risks not covered by their reinsurance
treaties, for amounts in excess of the monetary limits of their reinsurance
treaties and for unusual and complex risks. In addition, facultative risks often
provide coverages for relatively severe exposures which results in greater
volatility. Reinsurers who provide facultative coverage solely, or through
distinct operations, experience relatively high underwriting expenses and, in
particular, personnel costs, because each risk is individually underwritten and
administered. The ability to evaluate separately each risk reinsured, however,
increases the probability that the reinsurance underwriter can price the
contract to reflect more accurately the risks involved. Because of the
transactional nature of the business and the greater risks generally involved,
margins on facultative business are usually higher than on treaty business.

NON-TRADITIONAL/FINITE REINSURANCE

Non-traditional/finite reinsurance involves structured reinsurance
solutions tailored to meet an individual cedent's strategic and financial
objectives. Property and casualty risks can be reinsured on a
non-traditional/finite basis. Often these reinsurance solutions provide
reinsurance protection across a company's entire insurance portfolio. For
instance, a whole account aggregate stop loss, whether single year or multi-year
in design, provides protection for a company from deterioration in its accident
year results. Another common solution is a loss portfolio transfer, which can
take many forms, and which is frequently used to assist companies in efficiently
and effectively exiting lines of business or facilitating insurance entity sales
transactions. With increasing frequency, non-traditional/finite reinsurance has
been utilized in various ways to assist companies in managing property
catastrophe exposures and other loss exposures from single or multiple events
which, in the aggregate, could be significant. Because of the constantly
changing industry and regulatory framework, as well as the changing market
demands facing insurance companies, the approaches utilized in
non-traditional/finite programs are constantly evolving and will continue to do
so. We expect to be active participants in the non-traditional/finite
reinsurance business.

In particular, non-traditional/finite reinsurance products are utilized
by customers whose needs may not be met efficiently through traditional
reinsurance products, specifically, customers who seek to dampen volatility
associated with the insurance or reinsurance pricing cycle, adjust their
exposure to specific geographic areas or lines of business, increase their level
of retention over a period of time, minimize existing and potential liabilities
in connection with extraordinary corporate events, such as a merger or
acquisition, and manage their capital during periods of rapid growth. These
customers use non-traditional/finite products principally to mitigate volatility
in earnings and capital as well as to transfer insurance risks. The structure of
the product will depend on whether the concern about volatility relates
primarily to statutory capital and loss ratios, or to reported earnings under
the customer's accounting basis for investors, e.g., International Accounting
Standards, U.S. GAAP or other sovereign GAAP. Income tax treatment will also
affect the products' structure. The more widely used finite products have
similar features but differing terms and limits, depending on the customer's
requirements.

BROKER AND DIRECT REINSURANCE

Reinsurance can be written through reinsurance brokers or directly with
ceding companies. We believe that a ceding company's decision to select either
the broker market or the direct market is influenced by various factors
including, among others, market capacity, market competition, the value of the
broker's advocacy on the ceding company's behalf, the spread of risk,
flexibility in the terms and conditions, an ability to efficiently compare the
analysis and quotes of several reinsurers, the speed of a reinsurance placement,
the historical relationship with the reinsurer and the efficiency of claims
settlement with respect to a coverage. Through the use of reinsurance brokers, a
reinsurer may be able to avoid the need to develop a large staff dedicated to
particular

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reinsurance markets and to maintain the flexibility to move into other
reinsurance markets when it perceives opportunities. We believe that the use of
reinsurance brokers will allow us to avoid the significant fixed cost of
maintaining a sales force. We believe that brokers are particularly useful in
assisting clients in arranging excess-of-loss reinsurance programs. We expect to
underwrite a substantial majority of our reinsurance through brokers and, to a
much more limited extent, may also contract directly with ceding companies.

RETROCESSION

Reinsurers typically purchase reinsurance to cover their own risk
exposure or to increase their capacity. Reinsurance of a reinsurer's business is
called retrocession. Reinsurance companies cede risks under retrocessional
agreements to other reinsurers, known as retrocessionaires, for reasons similar
to those that cause primary insurers to purchase reinsurance. These reasons
include reducing liability on individual risks, protecting against catastrophic
losses, stabilizing financial ratios and obtaining additional underwriting
capacity. We plan to purchase and issue retrocessional policies.

REINSURANCE INDUSTRY CONDITIONS AND TRENDS

The reinsurance industry historically has been cyclical, characterized
by periods of price competition due to excessive underwriting capacity as well
as periods when shortages of underwriting capacity have permitted favorable
pricing.

Cyclical trends in the industry and the industry's profitability can
also be affected significantly by volatile and unpredictable developments,
including natural and other disasters, such as hurricanes, windstorms,
earthquakes, floods, fires, explosions and other catastrophic events, including
terrorist attacks, the frequency and severity of which are inherently
unpredictable. We believe that property and casualty reinsurance rates often
rise in the aftermath of significant catastrophe losses. As claims are reserved,
the industry's capacity to write new business diminishes. The industry is also
affected by changes in the propensity of courts to expand insurance coverage and
grant large damage awards, as well as fluctuations in interest rates and other
changes in the economic environment that affect market prices of investments.

As a result of favorable loss levels and strong investment returns
beginning in 1995, the reinsurance industry entered a cycle of increased
competition and industry capacity, which pushed property and casualty premium
rates down. However, in 1999, there were several significant worldwide
catastrophic events, which resulted in insured losses of approximately $31
billion. These losses, and the subsequent contraction of capacity in the market,
fueled improvements in rates, terms and conditions beginning with January 2000
renewals. These improvements continued in 2001 with a number of catastrophic
events in the first half of the year, and were accelerated by the terrorist
attack of September 11, 2001. With insured losses estimated to be in the range
of $30 billion to $35 billion, the terrorist attack resulted in the largest
insured losses ever experienced by the industry. By comparison, the largest
insured catastrophic event prior to the attack was Hurricane Andrew in 1992 with
$20 billion in estimated losses.

We believe that the insured losses of 2001 have reduced the industry's
capacity to write new business. At the same time, it appears that the heightened
awareness that commercial properties are exposed to a variety of risks, and the
perception that certain regions of the world may be underinsured, have increased
the demand for property-related insurance and reinsurance. As a result, with
respect to January, April and July 2002 renewals, St. Paul Re experienced
substantial rate increases, generally ranging from 20% to 50% depending on the
line of business. We expect that the current imbalance between the increased
demand for property-related insurance and reinsurance and the reduced supply of
this type of coverage will continue to fuel improved rates, terms and conditions
for at least the immediate future.

EX-2.1 177th Page of 301 TOC 1st Previous Next ↓Bottom Just 177th
Following the terrorist attack of September 11, 2001, there is
uncertainty in the insurance and reinsurance markets about the extent to which
future coverages will extend to terrorist acts. There is also uncertainty about
the definition of terrorist acts. We believe that coverage of claims that are
the result of terrorist acts (as they are ultimately defined by industry and
government standards) will generally be excluded from property catastrophe
reinsurance contracts covering large commercial risks, above specified property
values, but generally will not be excluded for smaller commercial coverages,
personal lines or other coverages. Accordingly, we expect that we will incur
exposure to terrorist acts. The effect of potential U.S. and other governmental
intervention on the insurance and reinsurance markets we serve, including on the
extent to which coverage for terrorist acts will be offered by the insurance and
reinsurance markets in the future, is uncertain. Coverage for losses resulting
from terrorist acts may be offered separately in the reinsurance market, and we
may or may not offer such coverage in the future. If our and the insurance
industry's attempts to exclude coverage for terrorist acts were to fail, we
could incur large unexpected losses if further terrorist attacks occur.

OUR BUSINESS

GENERAL

Platinum Holdings is a newly formed Bermuda insurance holding company.
Our objective is to provide on a worldwide basis, through our licensed operating
subsidiaries Platinum US, Platinum UK and Platinum Bermuda, property, casualty,
marine, accident and health and finite reinsurance coverages to a diverse
clientele of insurers and select reinsurers. Platinum UK and Platinum Bermuda
are newly formed companies and, as such, have no prior operating history or loss
reserve run-off. Platinum US was formed in 1995 and is a licensed insurance
company and wholly owned subsidiary of St. Paul incorporated and domiciled in
the state of Maryland. Platinum US has been an inactive company with no prior
operating history and no exposure to adverse loss development. Upon completion
of the Public Offering, we will own Platinum US and Platinum UK through Platinum
Ireland, our newly formed and wholly owned intermediate Irish holding
subsidiary. We expect that Platinum Ireland will conduct no business operations
of its own other than owning Platinum US (through Platinum Finance, which will
conduct no business operations of its own other than to raise funds for Platinum
US through the issuance of senior notes constituting part of the equity security
units offered concurrently with the Public Offering) and Platinum UK. However,
we intend to explore the possibility of using Platinum Ireland as a platform for
the development of a reinsurance business concentrating on continental Europe.
The following chart summarizes our corporate structure upon completion of the
transactions contemplated by this prospectus.

[Organization Chart]

EX-2.1 178th Page of 301 TOC 1st Previous Next ↓Bottom Just 178th
We intend to organize our worldwide reinsurance business around the
following three operating segments: Global Property and Marine, Global Casualty
and Finite Risk. In each of our operating segments, we intend to offer our
reinsurance solutions to providers of commercial and personal lines of property
insurance as well as casualty insurance. We expect to underwrite most of our
reinsurance through brokers but we may also contract directly with ceding
companies, which will give us the flexibility to pursue business in accordance
with our ceding companies' preferred reinsurance purchasing channels. We intend
to write substantially all of our reinsurance business through treaties rather
than on a facultative basis, and a substantial majority on an excess-of-loss
basis rather than on a proportional basis.

We expect to operate principally as a lead or quoting reinsurer on the
treaties in which we participate. Generally, the lead or quoting reinsurer
negotiates with the ceding company and the broker to establish the proposed
terms of coverage, including the premium rate and retention level for
excess-of-loss contracts. When not acting as the leading or quoting reinsurer on
a particular treaty, we may seek to actively negotiate additional terms or
conditions. We believe that, consistent with our underwriting strategy,
operating as a lead or quoting reinsurer will allow us to establish walk-away
prices and focus on profitability rather than market share. In addition to the
benefit of leading negotiations of contract terms and prices, we believe that
operating as a lead or quoting reinsurer will aid us in the development of close
and continuing relationships with brokers and ceding companies. We also believe
that operating as a lead or quoting reinsurer will result in our receiving
solicitations from brokers for a broader range of business and provide us with
greater access to preferred risks.

COMPETITIVE STRENGTHS

We believe that we will have the benefits of being both an established
business and a new market entrant because of our management's reputation and St.
Paul Re's experience and contacts in the reinsurance market, our unencumbered
capital base and our expectation that the Assumed Reinsurance Contracts and our
right to seek to renew St. Paul Re's other contracts will be a long-term source
of business to us. As a well-capitalized company with reinsurance as our single
focus, we believe we will be able to expand our relationships with existing
clients and establish relationships with new clients.

We expect our initial portfolio to contain a variety of businesses
which we believe would normally take a significant time to develop. Upon
completion of the Public Offering, we expect to be diversified across several
types of coverage with approximately two-thirds of our premiums coming from
traditional property and casualty reinsurance and one-third from finite
reinsurance. We believe that the existing portfolio of business generated by St.
Paul Re represents a valuable asset given the renewal nature of the reinsurance
industry and the importance of continuity of relationships and information.

We believe that the market perceptions and reputation established by
St. Paul Re with respect to service and responsiveness will benefit us in light
of the transfer of personnel and underwriting activities from St. Paul Re to us.
We also believe that we will enjoy a reputation with our brokers and clients for
promptly responding to underwriting submissions and consistent underwriting
standards that emphasize long term profitability over premium growth or market
share.

We believe that the use of reinsurance brokers as our principal source
of business provides us with an advantage over direct writers in adjusting
treaty participations upward or downward to reflect changing market conditions,
as well as discontinuing any participation in treaties if rates and terms are no
longer attractive. In addition, we believe that the use of reinsurance brokers
will allow us to avoid the significant fixed cost of maintaining a sales force.
Furthermore, we believe that access to new opportunities on new treaties for
existing clients or new clients are facilitated by using the broker distribution
channel, due to the syndicated placement of the business.

EX-2.1 179th Page of 301 TOC 1st Previous Next ↓Bottom Just 179th
PLATINUM'S STRATEGY

- BUILD OUR FUTURE ON A STRONG FOUNDATION. We will commence operations
with the benefit of the Transferred Business:

- RENEWAL RIGHTS AND ASSUMED REINSURANCE CONTRACTS. Our
initial portfolio will contain a diversity of business that
would normally take many years to develop. We will be
acquiring St. Paul Re's existing customer lists and the
right to seek to renew its continuing in-force reinsurance
contracts, which produced 2001 pro forma net premiums
written of approximately $1.4 billion. Our business is
expected to be diversified between property contracts,
which tend to be short-tail in nature (where ultimate
losses are known relatively quickly), and casualty
contracts, which tend to be long-tail in nature (where
ultimate losses may not be known for many years). Property
catastrophe reinsurance will be a principal focus and will
initially constitute a diversified global book of business
in excess of $100 million in annual net premiums written.

- FULLY OPERATIONAL INFRASTRUCTURE. We will select
experienced employees from the skilled St. Paul Re employee
base. These employees have broker and ceding company
relationships and underwriting pricing and claims
experience that will allow us to be fully staffed and
operational in key underwriting and support functions. We
believe that this strong foundation will allow us to offer
clients and brokers a full range of products, support and
service immediately following the completion of the Public
Offering.

- ADD NEW EXECUTIVE LEADERSHIP TO EXISTING TALENT. In order to take
full advantage of the historical strengths of St. Paul Re, we have
significantly strengthened our senior management team with the
addition of Mr. Newman and Mr. Fadden. Mr. Newman and Mr. Fadden
have extensive experience in leading publicly traded reinsurance
companies and intend to implement a number of initiatives to
capitalize on the strengths of St. Paul Re to create a more focused
and more profitable reinsurance business. We expect these
initiatives to include implementing a new underwriting strategy,
improving risk management and reducing operating expenses.

- FOCUS ON PROFITABILITY, NOT MARKET SHARE. Our new
management team intends to pursue a strategy that
emphasizes underwriting discipline and profitability over
market share. Key elements of this strategy will be prudent
risk selection, appropriate pricing through strict
underwriting discipline and adjusting our business mix to
respond to changing market conditions. We intend to
increase our writing of lines of business, such as property
catastrophe excess-of-loss and property risk
excess-of-loss, which we believe will contribute to our
long-term profitability.

- EXERCISE DISCIPLINED UNDERWRITING AND RISK MANAGEMENT. We
intend to exercise risk management discipline by (i)
maintaining a diverse spread of risk in our book of
business across products and geographic zones, (ii)
focusing on excess-of-loss contracts as opposed to
proportional contracts, and (iii) reducing our aggregate
catastrophe exposure relative to historical levels through
more sophisticated management of property catastrophe
aggregate exposures.

- OPERATE A LEAN AND EXPENSE-FOCUSED UNDERWRITING BUSINESS.
We believe a lean underwriting culture will support our
focus on profitability and allow us to be more responsive
to changing market conditions. We intend to keep our
headcount low and maintain a limited number of offices. We
expect to have approximately 150 employees at the
completion of the Public Offering. The number of
underwriting offices was reduced by St. Paul Re from ten at
January 1, 2001 to five as of June 30, 2002. In addition,
we

EX-2.1 180th Page of 301 TOC 1st Previous Next ↓Bottom Just 180th
expect to originate most of our business from brokers,
rather than directly from ceding companies, which we believe
will keep our expenses low.

- GROW OUR BUSINESS BY LEVERAGING OUR GLOBAL PLATFORM. We intend to
operate in all three of the world's leading reinsurance markets with
offices in New York, London and Bermuda. St. Paul Re has conducted
authorized reinsurance activities in the U.S. and London for many
years, and has been well established as a lead underwriter in excess
casualty, property catastrophe and certain other classes of
reinsurance. Our new Bermuda subsidiary will provide us with both a
new market in which to write reinsurance and the flexibility to
provide reinsurance products that are best facilitated by an
offshore company.

- OPERATE FROM A POSITION OF FINANCIAL STRENGTH. As a newly formed
company, our initial capital position is unencumbered by any
development of loss reserves for business written prior to January
1, 2002. We intend to operate the Company with a target
capitalization consistent with our ratings objectives. Upon
completion of the Public Offering, the ESU Offering, the St. Paul
Investment and the RenaissanceRe Investment, we expect to have a
total capitalization of between approximately $955 million (assuming
an initial public offering price of $22.00, a Cash Contribution of
$121 million and no exercise of the underwriters', St. Paul's or
RenaissanceRe's options to purchase additional Common Shares or the
underwriters' option to purchase additional equity security units)
and approximately $1,142 million (assuming an initial public
offering price of $23.00, a Cash Contribution of $126 million and
full exercise of the underwriters', St. Paul's and RenaissanceRe's
options to purchase additional Common Shares in connection with the
Public Offering and the underwriters' option to purchase additional
equity security units). Our investment strategy will focus on
security and stability in our investment portfolio by maintaining a
diversified portfolio that will consist primarily of investment
grade fixed-income securities. We believe these factors, combined
with our strict underwriting discipline, will allow us to maintain
our strong financial position and to be opportunistic when market
conditions are most attractive.

OUR LINES OF BUSINESS

We intend to organize our worldwide reinsurance business around the
following three operating segments: Global Property and Marine, Global Casualty
and Finite Risk. On the pro forma basis described under "Pro Forma Financial
Information", we had net premiums written of $1,382 million for the year ended
December 31, 2001, $602 million for the six months ended June 30, 2002, and $576
million for the six months ended June 30, 2001. We expect that our global
reinsurance business will be comprised primarily of the types of reinsurance set
forth below, which we have grouped in accordance with our three operating
segments. The following table sets forth, on a pro forma basis, the distribution
by operating segment and by type of reinsurance, of our net premiums written for
the year ended December 31, 2001, and the six month periods ended June 30, 2002
and 2001. For a more detailed discussion of the pro forma combined results of
underwriting, see "Management's Discussion and Analysis of Pro Forma Financial
Condition and Underwriting Results".

EX-2.1 181st Page of 301 TOC 1st Previous Next ↓Bottom Just 181st
[Enlarge/Download Table]

SIX MONTHS ENDED JUNE 30, YEAR ENDED
----------------------------------------------- DECEMBER 31,
2002 2001 2001
-------------------- ------------------------ ------------------------
$ % TOTAL $ % TOTAL $ % TOTAL
------- ------- --------- ------- ---------- -------
($ IN MILLIONS)

GLOBAL PROPERTY AND MARINE
Excess-of-loss............................ $ 162 27% $ 132 23% $ 249 18%
Proportional.............................. 50 8% 36 6% 66 5
------- --- --------- --- ---------- ---
TOTAL GLOBAL PROPERTY AND MARINE 212 35% 168 29% 315 23
------- --- --------- --- ---------- ---
GLOBAL CASUALTY
Excess-of-loss............................ 197 33% 208 36% 440 32
Proportional.............................. 45 7% 76 13% 152 11
------- --- --------- --- ---------- ---
TOTAL GLOBAL CASUALTY................... 242 40% 284 49% 592 43
------- --- --------- --- ---------- ---
FINITE RISK................................. 148 25% 124 22% 475 34
------- --- --------- --- ---------- ---
TOTAL..................................... $ 602 100% $ 576 100% $ 1,382 100%
======= === ========= === ========== ===

The following table sets forth, on a pro forma basis, the distribution
by operating segment and by location of the cedent of our net premiums written
for the year ended December 31, 2001, and the six months ended June 30, 2002 and
2001.

[Enlarge/Download Table]

GLOBAL PROPERTY AND MARINE
United States............................. $ 112 18% $ 91 16% $ 173 13%
International............................. 100 17% 77 13% 142 10
------- --- --------- --- ---------- ---

TOTAL GLOBAL PROPERTY AND MARINE 212 35% 168 29% 315 23
------- --- --------- --- ---------- ---

GLOBAL CASUALTY
United States............................. 203 34% 230 40% 485 35
International............................. 39 6% 54 9% 107 8
------- --- --------- --- ---------- ---

TOTAL GLOBAL CASUALTY................... 242 40% 284 49% 592 43
------- --- --------- --- ---------- ---

FINITE RISK
United States............................. 89 15% 67 12% 266 19
International............................. 59 10% 57 10% 209 15
------- --- --------- --- ---------- ---

TOTAL FINITE RISK....................... 148 25% 124 22% 475 34
------- --- --------- --- ---------- ---
TOTAL..................................... $ 602 100% $ 576 100% $ 1,382 100%
======= === ========= === ========== ===

GLOBAL PROPERTY AND MARINE

The Global Property and Marine operating segment will include
principally property and marine reinsurance coverages that will be written both
in the United States and international markets. We expect that the majority of
the property business will consist of catastrophe excess-of-loss reinsurance
treaties. We expect that this global operating segment will also include
property per risk excess-of-loss treaties and property pro rata treaties. We
expect that marine reinsurance will include coverage for hull and cargo as well
as third party marine coverages for "protection and indemnity" and excess
liabilities, primarily under excess-of-loss treaties. We may write a limited
amount of other types of reinsurance on an opportunistic basis. Following the
completion of the Public Offering we expect the proportion of our net premiums
written generated by the Global Property and Marine segment to increase relative
to 2001 levels.

EX-2.1 182nd Page of 301 TOC 1st Previous Next ↓Bottom Just 182nd
- PROPERTY. We expect that our property reinsurance activities will
emphasize catastrophe excess-of-loss reinsurance. Such contracts
will provide a defined limit of liability, permitting us to quantify
our aggregate maximum loss exposure. By contrast, maximum liability
under pro rata contracts is more difficult to quantify precisely
within the occurrence limits that are normally part of the
contracts. Quantification of loss exposure will be fundamental to
our ability to manage our loss exposure through geographical zone
limits and program limits.

In addition, when our pricing standards are met, we may, to a
limited extent, write other property coverages, including per risk
excess-of-loss or pro rata treaties. In writing per risk
excess-of-loss business we intend to avoid lower layers in favor of
higher layers. These lines will diversify risk (although they
involve some catastrophe exposure) and thus reduce the volatility in
results of operations caused by catastrophes. We will enter into a
Services and Capacity Reservation Agreement with RenaissanceRe which
provides for a periodic review and assistance in measuring risk and
managing aggregate catastrophe exposures. For a discussion of our
Services and Capacity Reservation Agreement with RenaissanceRe, see
"Certain Relationships and Related Transactions--The RenaissanceRe
Investment--Business Arrangements--Services and Capacity Reservation
Agreement".

Excess-of-loss contracts will also help us to control our
underwriting results by increasing our flexibility to determine
premiums for reinsurance at specific retention levels, independent
of the premiums charged by primary insurers, and based upon our own
underwriting assumptions. Also, because primary insurers typically
retain a larger loss exposure under excess-of-loss contracts, we
believe that they have a greater incentive to underwrite risks and
adjust losses in a prudent manner.

- MARINE. We intend to provide reinsurance coverage of marine and
offshore energy insurance programs. We expect that coverages
reinsured will include hull damage, protection and indemnity, cargo
damage and general marine liability. We expect that such reinsurance
treaties will include excess-of-loss as well as proportional
treaties. We will emphasize excess-of-loss treaties that provide for
an evaluation using experience and exposure pricing models.

GLOBAL CASUALTY

The Global Casualty segment will include principally general and
automobile liability, professional liability, workers' compensation, accident
and health and casualty clash coverages. We also expect to include accident and
health reinsurance treaties in the form of self-insured aggregate medical stop
loss coverages, which go into effect when a self-insuring employer's total group
health insurance claims attain a certain level, as well as other types of
coverages as opportunities develop. We intend to generally write reinsurance
coverage in this segment through excess-of-loss treaties, including umbrella
coverages, which protect against losses in excess of amounts covered by other
policies, although we expect to reinsure selected classes of casualty business
on a pro rata basis, including accident and health business. Following the
completion of the Public Offering, we expect the proportion of our net premiums
written generated by the Global Casualty segment to decrease relative to 2001
levels.

- GENERAL AND AUTOMOBILE LIABILITY. We intend to reinsure accident and
casualty risks and collision damage of motor vehicles. Automobile
insurance can include coverage in three major areas--casualty,
accident benefits and physical damage. Casualty insurance provides
coverage payment for injuries and for property damage to third
parties. Accident benefits insurance provides coverage for loss of
income and medical and rehabilitation expenses for insured persons
who are injured in an automobile accident, regardless of fault.
Physical damage insurance provides for payment of damages to an
insured automobile arising from a collision with another object or
from other risks such as fire or theft.

EX-2.1 183rd Page of 301 TOC 1st Previous Next ↓Bottom Just 183rd
In addition, we expect to provide a broad range of coverage for
reinsurance of industrial, manufacturer, operational, environmental,
product and general third party liability. We expect that our
general and automobile liability reinsurance products will generally
be written on an excess-of-loss basis. We may, however, consider
selected accounts to be written on a proportional or pro rata basis
to the extent that such business satisfies our profitability
standards.

- PROFESSIONAL LIABILITY. We intend to write reinsurance treaties for
professional liability programs, including directors and officers
liability insurance and errors and omissions liability insurance. We
expect that, in most circumstances, the underlying insurance
products will be written on a claims-made form, which requires
claims related to the liabilities insured under the policy to be
submitted to the insurer while the policy is in force. We intend to
employ underwriters and pricing actuaries who specialize in
professional liability and we expect to seek to reinsure
professional liability programs and lines of casualty business where
and to the extent we believe past experience permits a reasonably
accurate estimation of premium adequacy. We intend, however, to
underwrite new exposures after a comprehensive evaluation of the
capability of the ceding company, a clear understanding of the type
of product, and establishment of underwriting and operating
procedures.

- WORKERS' COMPENSATION. We intend that our workers' compensation
coverages will provide flexible solutions that can help our clients
manage their global workers' compensation risks. We expect to
reinsure workers' compensation on a per-claimant basis as well as on
a catastrophe occurrence basis. We expect that our workers'
compensation reinsurance offerings will range from complete coverage
of a full workers' compensation program to specific carve-out
coverages that address a client's targeted concerns.

- ACCIDENT AND HEALTH. We intend to provide accident and health
reinsurance, typically in the form of self-insured aggregate medical
stop-loss coverages, referred to as "employers stop loss covers". On
a less frequent basis, we also expect to write medical providers
stop-loss, first dollar health insurance and other reinsurance of
health providers. We expect to rely principally on managing general
underwriters as intermediaries in connection with this line of
business.

- CASUALTY CLASH. We expect that our casualty clash coverages will
cover losses arising from a single set of circumstances (an
occurrence) covered by more than one cedent's insurance policy or
multiple claimants on one policy. We expect to limit our exposure to
a proportion of the cedent's loss in excess of a specified per
occurrence retention up to a specified limit.

FINITE RISK

The Finite Risk operating segment will include principally finite
reinsurance solutions to cedents whose needs may not be met efficiently through
traditional reinsurance products. We intend to focus on providing such clients
with customized solutions for their risk management and other financial
management needs. Whether working directly with the client or through a broker,
we will seek to develop client-specific solutions after spending time with the
client to understand its business needs. We intend to take a uniform risk
assessment approach throughout our worldwide operations as the classes of risks
underwritten through finite products will generally be consistent with the
classes covered using traditional products. See "--Underwriting and Risk
Management". The four main categories of finite products that we intend to sell
are described below:

- MULTI-YEAR EXCESS OF LOSS. These reinsurance contracts often
complement cedents' traditional excess-of-loss reinsurance programs.
They may involve any type of risk, but most often they cover
property and marine. In general, these contracts are designed so
that the cedent funds the normal level of loss activity over a
multi-year period. The reinsurer charges an additional margin to
provide a profit margin and to cover its costs and the risk that
losses are worse than normal. This type of product will often carry
an up-front premium plus

EX-2.1 184th Page of 301 TOC 1st Previous Next ↓Bottom Just 184th
additional premiums which are dependent on the magnitude of losses
claimed by the ceding company under the contract. The ceding company
generally also participates in a profit sharing arrangement under
this type of reinsurance contract if the business covered does not
generate excessive losses.

- AGGREGATE STOP LOSS. Aggregate stop loss reinsurance contracts
provide broad protection against a wide range of contingencies that
are difficult to address with traditional reinsurance. They can be
offered on a single or multi-year basis, and provide either
catastrophic or attritional loss protection.

- FINITE QUOTA SHARE. Finite quota share reinsurance contracts limit
the reinsurer's underwriting exposure while allowing the cedent
surplus and expense ratio relief.

- LOSS PORTFOLIO TRANSFER AND ADVERSE LOSS DEVELOPMENT. These types of
reinsurance contracts are considered retroactive reinsurance as they
cover past periods for which the loss events have already occurred,
but where all claims have not yet been made or paid. Retroactive
finite reinsurance products remain an attractive solution for
certain clients, who may, for example, wish to exit a particular
line of business, facilitate a business acquisition (where the
reinsurance contract effectively replaces the seller's requirement
to provide a loss reserve guarantee to the purchaser), or stabilize
statutory capital. Typically, a loss portfolio transfer will
transfer to the reinsurer all risks underwritten, subject to an
aggregate loss limit established in the contract. Adverse loss
development products provide reinsurance coverage for losses in
excess of the carried loss reserves of the ceding company at the
transaction date, or in some cases at a mutually agreed attachment
point, in excess of existing loss reserves.

MARKETING

We intend to market our reinsurance products worldwide through our
underwriting offices and non-exclusive relationships with more than 50 of the
leading reinsurance brokers active in the U.S. and non-U.S. markets for property
catastrophe reinsurance and other categories of reinsurance in which we will be
active.

On a pro forma basis, based on net premiums written during the three
months ended June 30, 2002, the five brokers from which St. Paul Re derived the
largest portions of its business (with the approximate percentage of St. Paul
Re's business derived from such brokers and their affiliates) are Aon
Corporation (25.5%), Marsh & McLennan Companies (20.9%), Benfield Blanch Inc.
(19.6%), Willis Group Holdings (9.4%) and Towers Perrin (3.0%). The loss of any
of these top five brokers could have a material effect on the amount of
reinsurance business that we obtain and consequently the reinsurance premiums
that we receive. On a pro forma basis, during the year ended December 31, 2001,
St. Paul Re had in force reinsurance contracts with 146 ceding companies that
were not derived from a reinsurance broker; otherwise, products are marketed
exclusively through brokers. All brokerage transactions are entered into on an
arm's-length basis. During 2001, on a pro forma basis, one ceding insurer
accounted for more than 6% of St. Paul Re's premiums written and no other single
ceding insurer accounted for more than 3%. Based on the Company's strategy,
which includes our intention to employ key St. Paul Re personnel and to maintain
our presence in our lines of business, management expects to maintain strong
relationships with these brokers.

We expect that brokers will perform data collection, contract
preparation and other administrative tasks, enabling us to market our
reinsurance products cost effectively by maintaining a small staff. We intend to
rely largely on reinsurance brokers to market our products. We believe that by
relying largely on reinsurance brokers, we will be able to avoid the expense and
regulatory complications of worldwide offices, thereby minimizing fixed costs
associated with marketing activities. We believe that by maintaining close
relationships with brokers, we will be able to obtain access to a broad range of
potential reinsureds.

EX-2.1 185th Page of 301 TOC 1st Previous Next ↓Bottom Just 185th
The following table sets forth, on a pro forma basis, net premiums
written and the percentage of St. Paul Re's premiums allocated to the geographic
location of the ceding company for St. Paul Re's aggregate operations. For a
more detailed discussion of the pro forma results of underwriting, see
"Management's Discussion and Analysis of Pro Forma Financial Condition and
Underwriting Results".

[Enlarge/Download Table]

SIX MONTHS ENDED
JUNE 30,
------------------------------------------ YEAR ENDED
2002 2001 DECEMBER 31, 2001
----------------- ----------------- -----------------
$ % $ % $ %
-------- --- ------- --- --------- ---
($ IN MILLIONS)

North America (ex Caribbean).......... $ 422 70% $ 397 69% $ 968 70%
Caribbean............................. 36 6 29 5 83 6
Latin America......................... 6 1 6 1 14 1
Far East.............................. 18 3 29 5 55 4
Continental Europe.................... 36 6 52 9 110 8
United Kingdom........................ 78 13 57 10 138 10
Other................................. 6 1% 6 1% 14 1%
-------- --- ------- --- --------- ---
$ 602 100% $ 576 100% $ 1,382 100%
======== === ======= === ========= ===

UNDERWRITING AND RISK MANAGEMENT

We intend to have a disciplined approach to underwriting and risk
management that emphasizes a profit orientation rather than a premium volume or
market-share oriented approach. In addition to geographic zones, we intend to
seek to limit our overall exposure to risk by limiting the amount of reinsurance
we will supply in accordance with a particular program or contract, so as to
achieve diversification within and across geographic zones.

We expect our risk management to use a variety of means, including the
use of contract terms, diversification criteria and probability analysis and the
analysis of comparable historical loss experience. We will monitor
concentrations of casualty risk by industry and classes of risk. We intend to
estimate the impact of certain catastrophic events using catastrophe modeling
software and contract information to evaluate our exposure to losses from
individual contracts and in the aggregate. For example, we expect that the
majority of the natural catastrophe reinsurance we will write will relate to
exposures within the United States, Europe and Japan. Accordingly, we will
monitor our exposure to natural catastrophic events that affect these regions,
such as U.S. hurricane, California earthquake, European windstorm and Japanese
typhoon or earthquake events.

We will seek to limit our potential loss, pre tax, but after
reinstatement and other premiums received due to the loss, from a single
one-in-250-year catastrophe on a probable maximum loss basis, after giving
effect to our retrocessional programs, to no more than 30% of our shareholders'
equity. There can be no assurance that our underwriting risk management
procedures and our retrocessional programs will successfully limit actual losses
to such amount and losses from a single catastrophe may materially exceed such
amount. The intended limitation in probable maximum loss exposure will rely
significantly on our retrocessional programs and the availability of
retrocessional coverage in the future. There have been, and in the future may
be, periods when retrocessional coverage is not available at all or at rates and
levels which would be acceptable. Loss of all or portions of our retrocessional
coverage could subject us to increased exposure, which could be material. A
limited number of the Assumed Reinsurance Contracts do not contain loss cap
ratios, which means that there is no contractual limit to the losses that we may
be required to pay pursuant to such Assumed Reinsurance Contracts.

EX-2.1 186th Page of 301 TOC 1st Previous Next ↓Bottom Just 186th
Substantially all property reinsurance business with natural peril
catastrophe exposure will have occurrence limits. Substantially all high layer
property, casualty and marine excess-of-loss business will also contain
aggregate limits in the contracts, with limited reinstatements of an occurrence
limit, which restore the original limit under the contract after the limit has
been depleted by losses incurred on that treaty. We intend to use our
proprietary models to assess the pricing adequacy, underwriting profitability
and investment returns to be expected from our reinsurance underwriting. We
expect that our actuarial and underwriting departments will work together to
establish an accurate pricing model for these purposes.

In addition, we will have available for our use the historical loss
experience of St. Paul Re to assist us in pricing individual treaties and
overall lines of business. We believe that this information provides us with a
significant benefit in the underwriting of future contracts and in the renewal
thereof. We expect to maintain the normal maximum program limits described under
"--Geographic Diversification" below. We will also attempt to distribute our
exposure across a range of attachment points, or the amount of claims that have
to be borne by the ceding insurer before our reinsurance coverage applies.
Attachment points will vary and will be based upon an assessment of the ceding
insurer's market share of property perils in any given geographic zone to which
the contract relates, as well as the capital needs of the ceding insurer.

Before we review any program proposal, we intend to consider the
appropriateness of the cedent, including the quality of its management and its
capital and risk management strategy. In addition, we intend to require that
each proposed reinsurance program include information on the nature of the
perils to be included and detailed aggregate information as to the location or
locations of the risks covered under the catastrophe contract. We would also
expect to request information on the cedent's loss history for the perils being
reinsured, together with relevant underwriting considerations, which would
impact exposures to catastrophe reinsurers. We expect to first evaluate
exposures on new programs in light of the overall zone limits in any given
catastrophe zone, together with program limits and contract limits, to ensure a
balanced and disciplined underwriting approach. If the program meets all these
initial underwriting criteria, we expect to then evaluate the proposal in terms
of its risk/reward profile to assess the adequacy of the proposed pricing and
its potential impact on our overall return on capital.

We plan to extensively use sophisticated modeling and other technology
in our underwriting process. We expect that each submission received will be
registered on the reinsurance data system that we will use for both underwriting
and aggregate control purposes. This system will enable both management and
underwriters to have on-line information regarding both individual exposures and
zonal aggregate concentrations. We expect that submissions will be recorded to
determine and monitor their status as being pending, authorized, or bound.

In addition to the reinsurance data system, we expect to use computer
modeling to measure and estimate loss exposure under both simulated and actual
loss scenarios and in comparing exposure portfolios to both single and multiple
events. We expect to contract with Applied Insurance Research for the use of
Cattrader and EQE for the use of Equecat, and we also plan to use RMS models as
part of our modeling approach. We expect to take an active role in the
evaluation of these commercial catastrophe pricing models, providing feedback to
the modeling companies to improve the efficiencies of these models. These
computer-based loss modeling systems utilize Best's data and direct exposure
information obtained from our clients to assess each client's catastrophe
management approach and adequacy of their program's protection. We believe that
modeling is a very important part of the underwriting criteria for catastrophe
exposure pricing. We expect to apply proprietary analysis of the catastrophe
exposure to supplement the model output in certain territories. The majority of
our expected client base also use one or more of the various modeling consulting
firms in their exposure management analysis. In addition, we

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intend to sometimes perform or contract for additional modeling analysis when
reviewing our global commitments. We expect that the combination of reinsurance
system information, together with the various commercial models we expect to
employ, will enable us to monitor and control our acceptance of exposure on a
global basis. We also intend to use proprietary risk modeling systems to measure
expected losses for perils other than hurricane and earthquake and that include
allowances for expenses and profit in pricing.

We expect to seek to limit our overall exposure to risk by pursuing a
disciplined underwriting strategy which will limit the amount of reinsurance we
will supply in accordance with a particular program or contract so as to achieve
diversification within and across geographical zones. Commencing January 2002,
St. Paul Re has maintained normal maximum program limits of $5 million on risk
programs, $6 million on casualty clash programs and $20 million on property
catastrophe programs. In a small number of instances, we may exceed these
limits. A limited number of the Assumed Reinsurance Contracts do not contain
loss cap ratios, which means that there is no contractual limit to the losses
that we may be required to pay pursuant to such Assumed Reinsurance Contracts.

We intend to establish a procedure for underwriting control to ensure
that all acceptances are made in accordance with our underwriting policy and
aggregate control. We expect that each underwriting individual will be given an
underwriting authority limit, and that underwriting amounts above those limits
will have to be submitted for approval to the chief underwriting officer.

Generally, about 50% of premiums we write each year are expected to be
for contracts which have effective dates in January, about 20% in April, about
20% in July and the remainder at other times throughout the year. Premiums are
generally due in installments over the contract term, with each installment
generally received within 30 days after the due date.

GEOGRAPHIC DIVERSIFICATION

We intend to seek, based on the location of the risk, to diversify our
exposure across geographic zones around the world in order to obtain a favorable
spread of risk. We intend to limit the coverage we provide for risks located in
particular zones, so as to maintain our aggregate loss exposure from all
contracts covering risks believed to be located in that zone, to a predetermined
level. We intend to monitor concentrations of risk in any particular geographic
area, and to seek to avoid accumulations of property risks located in areas
considered to have a higher probability of natural catastrophes, such as the
West Coast states, the Gulf Coast and Southeastern United States, as well as the
Caribbean, Japan, Northern Europe and other exposed international territories.

We expect to establish the predetermined levels referred to in the
prior paragraph annually on the basis of, and as a proportion of, shareholders'
equity. If a proposed reinsurance program would cause the limit then in effect
to be exceeded, we would expect to decline the program, regardless of its
desirability, unless we utilize retrocessional coverage, thereby reducing the
net aggregate exposure to the maximum limit permitted, or less. If we were to
suffer a net financial loss in any fiscal year, thus reducing shareholders'
equity, we would attempt to reduce the limits per zone in the following year,
with the possible effect that we would thereafter reduce existing business in a
zone exceeding such limit.

We intend to track our catastrophe exposures in all significant
countries around the world. We intend to maintain a database of our exposures in
each country and to conservatively estimate our probable maximum loss in each
country for the perils to which that country is subject (e.g., earthquakes,
hurricanes, and floods.) We expect to base our estimates on catastrophe models
and underwriting assessments. In addition, we expect to use catastrophe modeling
to review exposures

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on events that cross country borders such as wind events that may affect the
Caribbean and Florida or the U.K. and Continental Europe. The largest exposures
are expected to be in the U.S. for earthquake and hurricane, in the U.K. for
flood and wind, and in Japan for earthquake and wind.

We recognize that events may affect more than one zone, and to the
extent we intend to reinsure a ceding insurer with a loss exposure in more than
one zone, we intend to consider such potential loss in testing its limits in all
such affected zones. For example, a program with worldwide exposure may be
subject to limits in the North America zones as well as other zones around the
world, as applicable. This results in very substantial "double-counting" of
exposures in determining utilization of an aggregate within a given zone.
Consequently, the total sum insured may be less than the sums of utilized
aggregates for all of the zones.

RETROCESSIONAL REINSURANCE

We expect to obtain retrocessional reinsurance to, among other things,
reduce volatility in general, and to increase our capacity offered on individual
reinsurance programs.

The major types of retrocessional coverage we expect to purchase will
include the following:

- specific coverage for certain property, marine and casualty
exposures,

- catastrophe coverage for property business, and

- corporate level coverage for the potential accumulation or
aggregation of exposures across some or all of our operations.

We may purchase further retrocessional coverage on an opportunistic
basis. For a discussion of our Investment Agreement with St. Paul and
RenaissanceRe, see "Certain Relationships and Related Transactions--the
RenaissanceRe Investment".

We expect that our decisions with respect to purchasing retrocessional
coverage will consider both the potential coverage and market conditions with
respect to the pricing, terms, conditions and availability of such coverage,
with the aim of securing cost-effective protection. We expect that the level of
retrocessional coverage will vary over time, reflecting the underwriter's and/or
our view of the changing dynamics of both the underlying exposure and the
reinsurance markets.

We expect that, prior to entering into a retrocessional agreement, we
will analyze the financial strength and rating of each retrocessionaire. We
expect that retrocessional coverage will generally be derived from companies
rated "A" or better by Best's. Afterwards, the financial performance and rating
status of all material retrocessionaires will be monitored. Retrocession
agreements do not relieve us from our obligations to the insurers and reinsurers
from whom we assume business. The failure of retrocessionaires to honor their
obligations could result in losses to us.

For 2002, St. Paul Re purchased an accident year aggregate
excess-of-loss retrocession agreement which provides up to $200 million of
coverage if the accident year loss ratio exceeds a specified loss ratio
attachment point for the 2002 accident year. This retrocessional agreement will
cover risks retained by St. Paul Re and risks underwritten by Platinum with
respect to the 2002 accident year. The attachment point is net of inuring
retrocessions and includes adjustable premium provisions that effectively cause
the Company to pay to the retrocessionaire, on a pre-tax income basis, up to 50%
of such ceded losses, through additional premiums.

Platinum Bermuda expects to reinsure up to approximately 70% of
Platinum US's reinsurance business, excluding business subject to the Quota
Share Retrocession Agreements, written after the Public Offering and up to
approximately 55% of Platinum UK's reinsurance business, excluding

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business subject to the Quota Share Retrocession Agreements, written after the
Public Offering. St. Paul will write reinsurance in the U.K. and reinsure it
100% to us for up to one year following the completion of the Public Offering or
the date on which Platinum UK receives its authorization (if earlier). For a
discussion of potential future limits on the portion of the reinsurance written
by Platinum UK after the Public Offering which can be reinsured to Platinum
Bermuda, see "Business--Our Business--Regulation--U.K. Regulation--Proposed
Limits on Concentration of Reinsurance Exposures".

CLAIMS ADMINISTRATION

With respect to the Assumed Reinsurance Contracts, claims will be
managed by St. Paul's claims department, with our supervision and management,
pursuant to the Quota Share Retrocession Agreements described below under
"Certain Relationships and Related Transactions--The St. Paul Investment--Quota
Share Retrocession Agreements". We will reimburse St. Paul for costs of managing
these claims. Platinum may, at its discretion and expense, take over
administration of any specific claims. Our own claims department will administer
claims arising under our contracts other than the Assumed Reinsurance Contracts.

The responsibilities of the claims department will include reviewing
initial loss reports, monitoring claims handling activities of clients,
requesting additional information where appropriate, establishing initial case
reserves and approving payment of individual claims. We expect that authority
for payment and establishing reserves will always be established in levels,
depending upon rank and experience.

In addition to managing reported claims and conferring with ceding
companies on claims matters, we expect that the claims department will conduct
periodic audits of specific claims and the overall claims procedures of our
clients at the offices of ceding companies. We expect to rely on the ability to
monitor effectively the claims handling and claims reserving practices of ceding
companies in order to establish the proper reinsurance premium for reinsurance
agreements and to establish proper loss reserves. Moreover, prior to accepting
certain risks, we expect that our underwriters will often request that the
claims department conduct pre-underwriting claims audits of prospective ceding
companies. Through these audits, we intend to attempt to evaluate the ceding
company's claims-handling practices, including the organization of their claims
department, their fact-finding and investigation techniques, their loss
notifications, the adequacy of their reserves, their negotiation and settlement
practices and their adherence to claims-handling guidelines. Following these
audits, we expect that the claims department will provide feedback to the ceding
company, including an assessment of the claims operation and, if appropriate,
recommendations regarding procedures, processing and personnel.

RESERVES

We are required by applicable insurance laws and regulations and U.S.
GAAP to establish reserves for payment of losses and loss adjustment expenses
that will arise from our products. These reserves will be balance sheet
liabilities representing estimates of future amounts required to pay losses and
loss adjustment expenses for insured claims which have occurred at or before the
balance sheet date, whether already known to us or not yet reported. Significant
periods of time can elapse between the occurrence of an insured claim, its
reporting by the insured to the primary insurance company and from the insurance
company to its reinsurance company. Loss reserves fall into two categories:
reserves for reported losses and loss adjustment expenses and reserves for
incurred but not reported, or IBNR, losses and loss adjustment expenses.

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Upon receipt of a notice of claim from a ceding company, we will
establish a case reserve for the estimated amount of the ultimate settlement.
Case reserves are usually based upon the amount of reserves reported by the
primary insurance company and may subsequently be supplemented or reduced as
deemed necessary by our claims department. We will also establish reserves for
loss amounts incurred but not yet reported, including expected development of
reported claims. These IBNR reserves will include estimated legal and other loss
adjustment expenses. We will calculate IBNR reserves by using generally accepted
actuarial techniques. We will utilize actuarial tools that rely on historical
and pricing information and statistical models as well as our pricing analyses.
We will revise these reserves for losses and loss adjustment expenses as
additional information becomes available and as claims are reported and paid.

Loss reserves will represent our estimates, at a given point in time,
of the ultimate settlement and administration costs of claims incurred, and it
is possible that the ultimate liability may exceed or be less than such
estimates. Such estimates will not be precise because, among other things, they
are based on predictions of future developments and estimates of future trends
in claim severity and frequency and other variable factors such as inflation and
currency exchange rates. During the claim settlement period, it will often
become necessary to refine and adjust the estimates of liability on a claim
either upward or downward, and any such adjustment would affect our results of
operations in the period when the adjustment is determined. Even after such
adjustments, ultimate liability may materially exceed or be less than the
revised estimates. In contrast to casualty losses, which frequently can be
determined only through lengthy, unpredictable litigation, property losses tend
to be reported promptly and settled within a shorter period of time.

Our estimates of reserves from reported and unreported losses and
related reinsurance recoverable assets will be reviewed and updated. Adjustments
resulting from changes in our estimates will be reflected in current income. The
analysis relies upon the basic assumption that past experience, adjusted for the
effect of current developments and likely trends, is an appropriate basis to
estimate our current loss and loss adjustment expense liabilities. Because
estimation of loss reserves is an inherently uncertain process, quantitative
techniques frequently have to be supplemented by professional and managerial
judgment. In addition, trends that have affected development of reserves in the
past may not necessarily occur or affect reserve development to the same degree
in the future.

The uncertainty inherent in loss estimation is particularly pronounced
for long-tail lines such as umbrella, general and professional liability and
automobile liability, where information, such as required medical treatment and
costs for bodily injury claims, will only emerge over time. In the overall
reserve setting process, provisions for economic inflation and changes in the
social and legal environment are considered. The uncertainty inherent in the
reserving process for primary insurance companies is even greater for the
reinsurer. This is because of, but not limited to, the time lag inherent in
reporting information from the insurer to the reinsurer and differing reserving
practices among ceding companies. As a result, actual losses and loss adjustment
expenses may deviate, perhaps materially, from expected ultimate costs reflected
in our current reserves.

In setting reserves, we expect to utilize the same integrated,
multi-disciplinary approach that we expect to use to establish our reinsurance
prices. We expect that, after an initial analysis by members of our actuarial
staff, preliminary results will be shared with appropriate underwriters, pricing
actuaries, claims and finance professionals and, as appropriate, senior
management. Final actuarial recommendations will incorporate feedback from these
professionals. To the extent reserves prove to be insufficient to cover actual
losses and loss adjustment expenses after taking into account available
retrocessional coverage, we would have to augment such reserves and incur a
charge to earnings in the period during which such reserves are augmented that
could be material.

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Under U.S. GAAP, we will not be permitted to establish loss reserves
until the occurrence of an event which may give rise to a loss. Once such an
event occurs, we will establish reserves based upon estimates of total losses
incurred by the ceding insurers as a result of the event and our estimate of the
portion of such loss we have reinsured. As a result, only loss reserves
applicable to losses incurred up to the reporting date may be set aside, with no
allowance for the provision of a contingency reserve to account for expected
future losses. Losses arising from future events will be estimated and
recognized at the time the loss is incurred and could be substantial.

INVESTMENTS

GENERAL GUIDELINES. We intend to develop investment guidelines for the
management of our investment portfolio by third party investment managers.
Although these guidelines are expected to stress diversification of risk,
preservation of capital and market liquidity, investments will be subject to
market-wide risks and fluctuations, as well as risks inherent in particular
securities. The primary objective of the portfolio, to be set forth in the
guidelines, will be to maximize investment returns consistent with appropriate
safety, diversification, tax and regulatory considerations and to provide
sufficient liquidity to enable us to meet our obligations on a timely basis.
These guidelines will be subject to oversight and change at the discretion of
our Board of Directors.

Our investment strategy will take into consideration the risks inherent
in property catastrophe and other reinsurance. For this reason management
expects that our investment policy will be conservative with a strong emphasis
on high quality, fixed maturity investments. We expect that the guidelines will
include limitations with respect to the maximum effective maturity. The duration
of the portfolio will vary according to decisions taken by the investment
advisors on the outlook for interest rate movements, subject to limitations set
forth in the guidelines. The duration limitations set forth in the guidelines
are expected to take into consideration the estimated duration of the
reinsurance liabilities in the business.

Initially, we expect to invest only in investment grade securities. We
do not currently intend to invest any of our portfolio in equity securities,
although we may do so in the future. We do not intend to invest in real estate
or other classes of alternative investments. We expect that our investment
guidelines will contain restrictions and limitations designed to provide
diversification across our portfolio, including limitations on the portion of
the portfolio that may be invested in the securities of any single issue or
issuer, with the exception of sovereign governments or agencies, including
supernational agencies, with prescribed minimum ratings. Our investment managers
may be instructed to invest some of the investment portfolio in currencies other
than U.S. dollars based upon the business we anticipate writing, the exposures
and loss reserves on our books, or regulatory requirements. We expect that our
investment guidelines will provide that financial futures and options and
foreign exchange contracts may not be used in a speculative manner but may be
used, subject to certain numerical restrictions set by the Board of Directors,
only as part of a defensive strategy to protect the market value of investments.

Insurance company investments must comply with applicable laws and
regulations which prescribe the kind, quality and concentration of investments.
In general, these laws and regulations permit investments, within specified
limits and subject to some qualifications, in federal, state and municipal
obligations, corporate bonds, preferred and common equity securities, mortgage
loans, real estate and some other investments.

INVESTMENT MANAGEMENT AGREEMENT. We expect to enter into an investment
management agreement, effective upon completion of the Public Offering, with
Alliance Capital Management L.P., which will provide investment advisory
services to us.

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VALUATION. We expect to classify our entire investment portfolio as
available-for-sale. All of our fixed income securities will be carried at their
estimated fair value, with the difference between amortized cost and the fair
value, net of any deferred taxes, to be charged or credited directly to our
shareholders' equity. We will calculate the fair value based on quoted market
prices, as reported by reputable market data providers such as Bloomberg,
Reuters or Telerate. If quoted market prices are not available, fair values will
be estimated either based on values obtained from independent pricing services
or on a cash flow estimate. Cash equivalents and short-term investments will be
carried at cost, which we expect will approximate fair value. Realized gains and
losses on disposal of investments will be determined based upon specific
identification of the cost of investments sold and will be recorded in our
statements of operations. We will monitor the unrealized difference between the
cost and the estimated fair value of the securities in our portfolio. If the
value of any of our investments declines in a manner that we believe is other
than temporary, we will write down that investment and will record a realized
loss on our statement of operations.

COMPETITION

The property and casualty reinsurance industry is highly competitive
and, except for regulatory considerations, there are relatively few barriers to
entry. We will compete with insurers and reinsurers worldwide, many of which
have greater financial, marketing and management resources than ours. Some of
our competitors are large financial institutions who have reinsurance divisions,
while others are specialty reinsurance companies. Financial institutions have
also created alternative capital market products that compete with reinsurance
products, such as reinsurance securitization. Our principal competitors vary by
type of business. Bermuda-based reinsurers are significant competitors on
property catastrophe business. Lloyd's of London syndicates are significant
competitors on marine business. On international business, the large European
reinsurers are significant competitors. Large U.S. direct reinsurers, as well as
lead U.S.-based broker market reinsurers, are significant competitors on U.S.
casualty business. On an overall basis, we expect that our most significant
competitors will include General Re, Munich Re, Swiss Re, Employers Re, Lloyd's
of London, XL Capital, ACE, Converium Holding, Everest Re, and PartnerRe.

Recently, several individuals and companies in the reinsurance industry
have established new, well-capitalized Bermuda-based reinsurers to benefit from
improved market conditions following the September 11, 2001 terrorist attack,
and several existing competitors have raised additional capital or have
announced plans to do so. Many of the reinsurers who have entered the
reinsurance markets have or could have more capital than we will have. In
addition, there may be established companies or new companies of which we are
not aware that may be planning to commit capital to this market. Competition in
the types of reinsurance business that we underwrite is based on many factors,
including premium charges and other terms and conditions offered, services
provided, ratings assigned by independent rating agencies, speed of claims
payment, claims experience, perceived financial strength and experience and
reputation of the reinsurer in the line of reinsurance to be written. The full
effect of this additional capital on the reinsurance market and on the terms and
conditions of the reinsurance contracts of the types we expect to write may not
be known for some time.

The reinsurance industry is highly concentrated. We estimate that,
based on 2000 net premiums written, the four largest reinsurers currently have a
market share of approximately 49%, and the next ten largest property and
casualty reinsurers currently have a market share of approximately 30%.
Reinsurance companies have sought in recent years to expand their existing
markets, obtain critical mass in new markets, including life reinsurance, and
further diversify risk. At the same time, consolidation in the worldwide
insurance industry has created a smaller group of large ceding companies that
are retaining an increasing proportion of their business.

We are aware of a number of initiatives by traditional as well as new
capital market participants to produce alternative products (such as reinsurance
securitizations, catastrophe bonds and various

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derivatives such as swaps) that may compete with certain types of reinsurance,
such as property catastrophe. Over time, these numerous initiatives could
significantly affect supply, pricing and competition in our industry.

RATINGS

Best's is generally considered to be a significant rating agency with
respect to the evaluation of insurance and reinsurance companies. Best's ratings
are based on a quantitative evaluation of performance with respect to
profitability, leverage and liquidity and a qualitative evaluation of spread of
risk, reinsurance program, investments, reserves and management. Insurance
ratings are used by insurers and reinsurance intermediaries as an important
means of assessing the financial strength and quality of reinsurers. In
addition, a ceding company's own rating may be adversely affected by the lack of
a rating of its reinsurer. Therefore, the lack of a rating may dissuade a ceding
company from reinsuring with us and may influence a ceding company to reinsure
with a competitor of ours that has an insurance rating.

EMPLOYEES

Currently, we employ Jerome T. Fadden, our President and Chief
Executive Officer. None of our employees is expected to be subject to collective
bargaining agreements. We expect to employ approximately 150 employees of St.
Paul Re.

Mr. Fadden has obtained a temporary work permit, and we are seeking
longer-term work permits from the Bermuda authorities for him as well as for
William A. Robbie, Michael E. Lombardozzi and any other employees of Platinum
Holdings or Platinum Bermuda who are not Bermuda citizens. Permits obtained will
expire at various times over the next several years. We have no reason to
believe that these permits would not be extended upon request at their
respective expirations. However, the Bermuda government recently announced a new
policy that places a six-year term limit on individuals with work permits,
subject to certain exceptions for key employees.

SUBSIDIARIES

Platinum UK and Platinum Bermuda are wholly owned operating
subsidiaries of Platinum Holdings. Platinum UK was formed as a U.K. company on
April 10, 2002, and Platinum Bermuda was formed as a Bermuda company on May 8,
2002. Platinum US was formed as a Maryland company in 1995 and is a wholly owned
subsidiary of St. Paul. We own Platinum UK through Platinum Ireland and, upon
completion of the Public Offering, will own Platinum US through Platinum
Finance, which will be a wholly owned subsidiary of Platinum Ireland, our wholly
owned intermediate holding subsidiary. Platinum Finance was formed as a Delaware
corporation on May 10, 2002. Platinum Ireland was formed as an Irish company on
May 3, 2002. Platinum Holdings will enter into a capital support agreement for
the benefit of one or more of our operating company subsidiaries, the effect of
which is to assure that, at all times, those subsidiaries will have adequate
capital and surplus.

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OUR FACILITIES

Platinum Holdings' registered office is located at Clarendon House, 2
Church Street, Hamilton HM 11, Bermuda. We expect to enter into a lease
agreement in Bermuda for approximately 5,000 to 10,000 square feet of office
space. We will sublet a portion of the office space at that location to Platinum
Bermuda for use as its principal offices.

The principal offices of Platinum US will be located at 195 Broadway,
New York, New York, where Platinum US will sub-lease from St. Paul approximately
50,000 square feet of office space. The term of the lease ends August 31, 2003.
We are currently exploring the possibility of leasing space at 195 Broadway
after August 31, 2003 and are also considering options to replace the office
space at 195 Broadway with a new facility.

We expect that the principal offices of Platinum UK will be located at
122 Leadenhall Street, London, where (subject to landlord's consent) St. Paul
will sub-let to Platinum UK approximately 9,000 square feet of office space. The
term of the sub-lease is expected to end in 2008.

Platinum US will enter into sub-lease agreements or assignments of
leases with St. Paul with respect to approximately 4,000 square feet of office
space in Chicago, 6,300 square feet of office space in Miami and expects to
enter into a sub-lease or assignment of lease of approximately 600 square feet
of office space in Tokyo. The terms of these leases will end in 2005, 2006 and
2003 respectively.

LEGAL PROCEEDINGS

In the normal course of business, we may become involved in various
claims and legal proceedings. We are not currently aware of any pending or
threatened material litigation.

REGULATION

GENERAL

The business of reinsurance is regulated in most countries, although
the degree and type of regulation varies significantly from one jurisdiction to
another. Reinsurers are generally subject to less direct regulation than primary
insurers. In Bermuda, we operate under relatively less intensive regulatory
regimes. However, in the United States and in the United Kingdom licensed
reinsurers must comply with financial supervision standards comparable to those
governing primary insurers. Accordingly, Platinum US and Platinum UK are subject
to extensive regulation under applicable statutes. In the United States, those
statutes delegate regulatory, supervisory and administrative powers to state
insurance commissioners.

POTENTIAL LEGISLATIVE AND INDUSTRY CHANGES

We are aware of a number of new, proposed or potential legislative or
industry changes that may impact upon the worldwide demand for reinsurance.

- Following the September 11, 2001 terrorist attack, various proposed
legislation was introduced in the U.S. Congress designed to ensure
the availability of insurance coverage for terrorist acts.
Legislation has been adopted in the U.S. House of Representatives
designed, among other things, to provide federal government loans
over a short-term period to commercial insurers and reinsurers for
funding losses arising from terrorist acts against U.S. properties,
which loans would be repaid through industry assessments and, if
losses exceed a threshold, policyholder assessments. Similar,
alternative legislation has been adopted in the U.S. Senate; the
Senate legislation provides for direct government assistance to
commercial insurers and reinsurers for covered losses that exceed a
per-company "deductible." Adoption of legislation may also provide
insurance and reinsurance capacity in the markets and to the
customers we expect to target and regulate the terms of insurance
and reinsurance capacity

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and reinsurance policies in a manner which could materially
adversely affect us, directly or indirectly, by requiring coverage
for terrorist acts to be offered by insurers and/or reinsurers,
benefiting our competitors, reducing the demand for reinsurance or
benefiting insurers as compared to reinsurers such as us, providing
sources of liquidity to U.S.-based companies, or disproportionately
benefiting U.S. or other foreign countries' companies over
Bermuda-based companies such as ourselves. Legislation may be
introduced in other jurisdictions.

- Over the last few years capital markets participants, including
exchanges and financial intermediaries, have developed financial
products such as risk securitizations, intended to compete with
traditional reinsurance. We are also aware of many potential
initiatives by capital market participants to produce additional
alternative products that may compete with the existing catastrophe
reinsurance markets.

We are unable to predict the extent to which the foregoing new,
proposed or potential initiatives may affect the demand for our products or the
risks which may be available for us to consider underwriting.

BERMUDA

As a holding company, Platinum Holdings is not subject to Bermuda
insurance regulations.

The Insurance Act, which regulates the insurance business of Platinum
Bermuda, provides that no person may carry on any insurance business in or from
within Bermuda unless registered as an insurer under the Insurance Act by the
Bermuda Monetary Authority, which is responsible for the day-to-day supervision
of insurers. Under the Insurance Act, insurance business includes reinsurance
business. The Authority, in deciding whether to grant registration, has broad
discretion to act as the Authority thinks fit in the public interest. The
Authority is required by the Insurance Act to determine whether the applicant is
a fit and proper body to be engaged in the insurance business and, in
particular, whether it has, or has available to it, adequate knowledge and
expertise. The registration of an applicant as an insurer is subject to its
complying with the terms of its registration and such other conditions as the
Authority may impose from time to time. Platinum Bermuda has been registered
with the Authority.

An Insurance Advisory Committee appointed by the Bermuda Minister of
Finance advises the Authority on matters connected with the discharge of the
Authority's functions and sub-committees thereof supervise and review the law
and practice of insurance in Bermuda, including reviews of accounting and
administrative procedures. The day-to-day supervision of insurers is the
responsibility of the Bermuda Registrar of Companies.

The Insurance Act imposes on Bermuda insurance companies solvency and
liquidity standards and auditing and reporting requirements and grants to the
Authority powers to supervise, investigate and intervene in the affairs of
insurance companies. Certain significant aspects of the Bermuda insurance
regulatory framework are set forth below.

Classification of Insurers. The Insurance Act distinguishes between
insurers carrying on long-term business and insurers carrying on general
business. There are four classifications of insurers carrying on general
business with Class 4 insurers subject to the strictest regulation. Platinum
Bermuda is registered as a Class 4 insurer and is regulated as such under the
Insurance Act.

Cancellation of Insurer's Registration. An insurer's registration may
be canceled by the Authority on certain grounds specified in the Insurance Act,
including failure of the insurer to comply with its obligations under the
Insurance Act or if, in the opinion of the Authority, the insurer has not been
carrying on business in accordance with sound insurance principles.

Principal Representative. An insurer is required to maintain a
principal office in Bermuda and to appoint and maintain a principal
representative in Bermuda. For the purpose of the Insurance

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Act, the principal office of Platinum Bermuda is at our principal executive
offices in Bermuda, and Platinum Bermuda's principal representative will be our
President and Chief Executive Officer. Without a reason acceptable to the
Authority, an insurer may not terminate the appointment of its principal
representative, and the principal representative may not cease to act as such,
unless 30 days' notice in writing to the Authority is given of the intention to
do so. It is the duty of the principal representative, within 30 days of
reaching the view that there is a likelihood of the insurer for which the
principal representative acts becoming insolvent or that a reportable "event"
has, to the principal representative's knowledge, occurred or is believed to
have occurred, to make a report in writing to the Authority setting out all the
particulars of the case that are available to the principal representative.
Examples of such a reportable "event" include failure by the insurer to comply
substantially with a condition imposed upon the insurer by the Authority
relating to a solvency margin or liquidity or other ratio.

Independent Approved Auditor. Every registered insurer must appoint an
independent auditor who will annually audit and report on the statutory
financial statements and the statutory financial return of the insurer, both of
which, in the case of Platinum Bermuda, are required to be filed annually with
the Authority. The independent auditor of Platinum Bermuda must be approved by
the Authority and may be the same person or firm which audits Platinum Bermuda's
financial statements and reports for presentation to its shareholders. Platinum
Bermuda's independent auditor is KPMG LLP.

Loss Reserve Specialist. As a registered Class 4 insurer, Platinum
Bermuda will be required to submit an opinion of its approved loss reserve
specialist with its statutory financial return in respect of its loss and loss
adjustment expense provisions. The loss reserve specialist, who will normally be
a qualified casualty actuary, must be approved by the Authority. Neal J.
Schmidt, who will be the Chief Actuary of Platinum US, has been approved to act
as Platinum Bermuda's loss reserve specialist.

Statutory Financial Statements. An insurer must prepare annual
statutory financial statements. The Insurance Act prescribes rules for the
preparation and substance of such statutory financial statements (which include,
in statutory form, a balance sheet, an income statement, a statement of capital
and surplus and notes thereto). The insurer is required to give detailed
information and analyses regarding premiums, claims, reinsurance and
investments. The statutory financial statements are not prepared in accordance
with U.S. GAAP and are distinct from the financial statements prepared for
presentation to the insurer's shareholders under the Companies Act, which
financial statements will be prepared in accordance with U.S. GAAP. Platinum
Bermuda, as a general business insurer, will be required to submit the annual
statutory financial statements as part of the annual statutory financial return.
The statutory financial statements and the statutory financial return do not
form part of the public records maintained by the Authority.

Annual Statutory Financial Return. Platinum Bermuda is required to file
with the Authority a statutory financial return no later than four months after
its financial year end (unless specifically extended). The statutory financial
return for an insurer includes, among other matters, a report of the approved
independent auditor on the statutory financial statements of such insurer,
solvency certificates, the statutory financial statements themselves, the
opinion of the loss reserve specialist and a schedule of reinsurance ceded. The
solvency certificates must be signed by the principal representative and at
least two directors of the insurer who are required to certify, among other
matters, whether the minimum solvency margin has been met and whether the
insurer complied with the conditions attached to its certificate of
registration. The independent approved auditor is required to state whether in
its opinion it was reasonable for the directors to so certify. Where an
insurer's accounts have been audited for any purpose other than compliance with
the Insurance Act, a statement to that effect must be filed with the statutory
financial return.

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Minimum Solvency Margin and Restrictions on Dividends and
Distributions. Under the Insurance Act, the value of the general business assets
of a Class 4 insurer, such as Platinum Bermuda, must exceed the amount of its
general business liabilities by an amount greater than the prescribed minimum
solvency margin. Platinum Bermuda:

(1) is required, with respect to its general business, to maintain a
minimum solvency margin equal to the greatest of:

(A) $100,000,000;

(B) 50% of net premiums written (being gross premiums written less
any premiums ceded by Platinum Bermuda, but Platinum Bermuda
may not deduct more than 25% of gross premiums when computing
net premiums written); and

(2) is prohibited from declaring or paying any dividends during any
financial year if it is in breach of its minimum solvency margin or
minimum liquidity ratio or if the declaration or payment of such
dividends would cause it to fail to meet such margin or ratio (and if
it has failed to meet its minimum solvency margin or minimum liquidity
ratio on the last day of any financial year, Platinum Bermuda is
prohibited, without the approval of the Authority, from declaring or
paying any dividends during the next financial year);

(3) is prohibited from declaring or paying in any financial year dividends
of more than 25% of its total statutory capital and surplus (as shown
on its previous financial year's statutory balance sheet) unless it
files with the Authority (at least 7 days before payment of such
dividends) an affidavit stating that it will continue to meet the
required margins;

(4) is prohibited, without the approval of the Authority, from reducing by
15% or more its total statutory capital as set out in its previous
year's financial statements, and any application for such approval must
include an affidavit stating that it will continue to meet the required
margins; and

(5) is required, at any time it fails to meet its solvency margin, within
30 days (45 days where total statutory capital and surplus falls to $75
million or less) after becoming aware of that failure or having reason
to believe that such failure has occurred, to file with the Authority a
written report containing certain information.

Additionally, under the Companies Act, Platinum Holdings and Platinum
Bermuda may declare or pay a dividend only if Platinum Holdings or Platinum
Bermuda, as the case may be, has no reasonable grounds for believing that it is,
or would after the payment be, unable to pay its liabilities as they become due,
or that the realizable value of its assets would thereby be less than the
aggregate of its liabilities and its issued share capital and share premium
accounts.

Minimum Liquidity Ratio. The Insurance Act provides a minimum liquidity
ratio for general business insurers. An insurer engaged in general business is
required to maintain the value of its relevant assets at not less than 75% of
the amount of its relevant liabilities. Relevant assets include cash and time
deposits, quoted investments, unquoted bonds and debentures, first liens on real
estate, investment income due and accrued, accounts and premiums receivable and
reinsurance balances receivable. There are certain categories of assets which,
unless specifically permitted by the Authority, do not automatically qualify as
relevant assets, such as unquoted equity securities, investments in and advances
to affiliates and real estate and collateral loans. The relevant liabilities are
total general business insurance reserves and total other liabilities less
deferred income tax and sundry liabilities (by interpretation, those not
specifically defined).

Supervision, Investigation and Intervention. The Authority may appoint
an inspector with extensive powers to investigate the affairs of an insurer if
the Authority believes that an investigation is required in the interest of the
insurer's policyholders or persons who may become policyholders.

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In order to verify or supplement information otherwise provided to the
Authority, the Authority may direct an insurer to produce documents or
information relating to matters connected with the insurer's business.

If it appears to the Authority that there is a risk of the insurer
becoming insolvent, or that it is in breach of the Insurance Act or any
conditions imposed upon its registration, the Authority may, among other things,
direct the insurer (1) not to take on any new insurance business, (2) not to
vary any insurance contract if the effect would be to increase the insurer's
liabilities, (3) not to make certain investments, (4) to realize certain
investments, (5) to maintain in, or transfer to the custody of, a specified
bank, certain assets, (6) not to declare or pay any dividends or other
distributions or to restrict the making of such payments and/or (7) to limit its
premium income.

Disclosure of Information. In addition to powers under the Insurance
Act to investigate the affairs of an insurer, the Authority may require certain
information from an insurer (or certain other persons) to be produced to it.
Further, the Authority has been given powers to assist other regulatory
authorities, including foreign insurance regulatory authorities, with their
investigations involving insurance and reinsurance companies in Bermuda but
subject to restrictions. For example, the Authority must be satisfied that the
assistance being requested is in connection with the discharge of regulatory
responsibilities of the foreign regulatory authority. Further, the Supervisor
must consider whether to cooperate is in the public interest. The grounds for
disclosure are limited and the Insurance Act provides sanctions for breach of
the statutory duty of confidentiality.

Certain Other Considerations. Platinum Holdings and Platinum Bermuda
will each also need to comply with the provisions of the Companies Act
regulating the payment of dividends and making of distributions from contributed
surplus. A company is prohibited from declaring or paying a dividend, or making
a distribution out of contributed surplus, if there are reasonable grounds for
believing that: (a) the company is, or would after the payment be, unable to pay
its liabilities as they become due, or (b) the realizable value of the company's
assets would thereby be less than the aggregate of its liabilities and its
issued share capital and share premium accounts.

Although Platinum Bermuda is incorporated in Bermuda, it is classified
as a non-resident of Bermuda for exchange control purposes by the Authority.
Pursuant to its non-resident status, Platinum Bermuda may hold any currency
other than Bermuda Dollars and convert that currency into any other currency
(other than Bermuda Dollars) without restriction.

As "exempted" companies, Platinum Holdings and Platinum Bermuda may
not, without the express authorization of the Bermuda legislature or under a
license granted by the Minister of Finance, participate in certain business
transactions, including: (1) the acquisition or holding of land in Bermuda
(except that held by way of lease or tenancy agreement which is required for its
business and held for a term not exceeding 50 years, or which is used to provide
accommodation or recreational facilities for its officers and employees and held
with the consent of the Bermuda Minister of Finance, for a term not exceeding 21
years); (2) the taking of mortgages on land in Bermuda in excess of $50,000; or
(3) the carrying on of business of any kind for which it is not licensed in
Bermuda, except in certain limited circumstances such as doing business with
another exempted undertaking in furtherance of our business or Platinum
Bermuda's business (as the case may be) carried on outside Bermuda. Platinum
Bermuda is a licensed reinsurer in Bermuda, and so may carry on activities in
Bermuda that are related to and in support of its reinsurance business.

The Bermuda government actively encourages foreign investment in
"exempted" entities like Platinum Holdings that are based in Bermuda, but do not
operate in competition with local businesses. As well as having no restrictions
on the degree of foreign ownership, Platinum Holdings and Platinum Bermuda are
not currently subject to taxes on income or dividends or to any foreign exchange
controls in Bermuda. In addition, there currently is no capital gains tax in
Bermuda.

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Under Bermuda law, non-Bermudians (other than spouses of Bermudians)
may not engage in any gainful occupation in Bermuda without the specific
permission of the appropriate governmental authority. Such permission may be
granted or extended upon showing that, after proper public advertisement, no
Bermudian (or spouse of a Bermudian) is available who meets the minimum
standards for the advertised position. None of our executive officers is a
Bermudian, and all such officers will be working in Bermuda under work permits.
The Bermuda government recently announced a new policy that places a six-year
term limit on individuals with work permits, subject to certain exceptions for
key employees.

U.S. REGULATION

Platinum US is organized and domiciled in the State of Maryland and
licensed, authorized or accredited to write reinsurance in 24 states of the
United States and is seeking licenses in eight additional states. State
insurance laws regulate many aspects of its reinsurance business and state
insurance departments in the licensure states will supervise its insurance
operations. Its principal insurance regulatory authority will be the Maryland
Insurance Administration.

U.S. Insurance Holding Company Regulation of Platinum Holdings,
Platinum Ireland and Platinum Finance

Platinum Holdings and Platinum Ireland as the indirect parents of
Platinum US and Platinum Finance as the direct parent of Platinum US will be
subject to the insurance holding company laws of Maryland, where Platinum US is
organized and domiciled. These laws generally require the insurance holding
company and each insurance company directly or indirectly owned by the holding
company to register with the insurance department of the state of Maryland and
to furnish annually financial and other information about the operations of
companies within the holding company system. Generally, all transactions among
companies in the holding company system affecting Platinum US, including sales,
loans, reinsurance agreements, service agreements and dividend payments, must be
fair and, if material or of a specified category, require prior notice and
approval or non-disapproval by the Maryland Insurance Commissioner.

The insurance laws of Maryland prevent any person from acquiring
control of Platinum Holdings, Platinum Ireland, Platinum Finance or Platinum US
unless that person has filed a notification with specified information with the
Maryland Insurance Commissioner and has obtained his prior approval. Under the
Maryland statutes, acquiring 10% or more of the voting stock of an insurance
company or its parent company is presumptively considered a change of control,
although such presumption may be rebutted. Accordingly, any person who acquires,
directly or indirectly, 10% or more of the voting securities of Platinum
Holdings without the prior approval of the Maryland Insurance Commissioner will
be in violation of these laws and may be subject to injunctive action requiring
the disposition or seizure of those securities by the Maryland Insurance
Commissioner or prohibiting the voting of those securities and to other actions
determined by the Maryland Insurance Commissioner. In addition, many U.S. state
insurance laws require prior notification of state insurance departments of a
change in control of a non-domiciliary insurance company doing business in that
state. While these pre-notification statutes do not authorize the state
insurance departments to disapprove the change in control, they authorize
regulatory action in the affected state if particular conditions exist such as
undue market concentration. Any future transactions that would constitute a
change in control of Platinum Holdings, Platinum Ireland or Platinum Finance may
require prior notification in those states that have adopted pre-acquisition
notification laws.

These laws may discourage potential acquisition proposals and may
delay, deter or prevent a change of control of Platinum Holdings, including
through transactions, and in particular unsolicited transactions, that some or
all of the shareholders of Platinum Holdings might consider to be desirable.

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State Insurance Regulation of Platinum US

The terms and conditions of reinsurance agreements generally are not
subject to regulation by any U.S. state insurance department with respect to
rates or policy terms. This contrasts with primary insurance agreements, the
rates and policy terms of which are generally closely regulated by state
insurance departments. As a practical matter, however, the rates charged by
primary insurers do have an effect on the rates that can be charged by
reinsurers.

State insurance authorities have broad administrative powers with
respect to various aspects of the reinsurance business, including: licensing to
transact business, admittance of assets to statutory surplus, regulating unfair
trade and claims practices, establishing reserve requirements and solvency
standards, and regulating investments and dividends. State insurance laws and
regulations require Platinum US to file financial statements with insurance
departments everywhere it is licensed or authorized to do or accredited to do
business, and the operations of Platinum US are subject to examination by those
departments at any time. Platinum US will prepare statutory financial statements
in accordance with accounting practices and procedures prescribed or permitted
by these departments. State insurance departments conduct periodic examinations
of the books and records, financial reporting, policy filings and market conduct
of insurance companies domiciled in their states, generally once every three to
five years. Examinations are generally carried out in cooperation with the
insurance departments of other states under guidelines promulgated by the NAIC.

Under Maryland insurance law, Platinum US may pay dividends out of
surplus, provided it must give the Maryland Insurance Commissioner at least
thirty days' prior notice before paying an "extraordinary dividend" or making an
"extraordinary distribution". Extraordinary dividends and extraordinary
distributions are dividends or distributions which, together with any other
dividends and distributions paid during the immediately preceding twelve-month
period, would exceed the lesser of

(1) ten percent of Platinum US's statutory policyholders' surplus (as
determined under statutory accounting principles) as of December 31 of
the prior year; and

(2) Platinum US's net investment income excluding realized capital gains
(as determined under statutory accounting principles) for the
twelve-month period ending on December 31 of the prior year, plus any
amounts of net investment income (excluding realized capital gains) in
the three preceding years which have not been distributed.

In addition, Platinum US must give ten days' prior notice to the
Maryland Insurance Commissioner of its intention to pay any dividend or make any
distribution other than an extraordinary dividend or extraordinary distribution.
The Maryland Insurance Commissioner has the right to prevent payment of such a
dividend or such a distribution if he determines, in his discretion, that after
the payment thereof, Platinum US's policyholders' surplus would be inadequate or
could cause Platinum US to be in a hazardous financial condition.

In order to enhance the regulation of insurers' solvency, the NAIC
adopted a model law to implement risk-based capital ("RBC") requirements for
life, health, and property and casualty insurance companies. Maryland has
adopted the NAIC's model law. The RBC calculation, which regulators use to
assess the sufficiency of an insurer's capital, measures the risk
characteristics of a company's assets, liabilities and certain off-balance sheet
items. RBC is calculated by applying factors to various asset, premium and
liability items. Within a given risk category, these factors are

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higher for those items with greater underlying risk and lower for items with
lower underlying risk. Insurers that have less statutory capital than the RBC
calculation requires are considered to have inadequate capital and are subject
to varying degrees of regulatory action depending upon the level of capital
inadequacy. The RBC ratios of Platinum US are intended to be well above the
ranges that would require any regulatory or corrective action.

The NAIC assists state insurance supervisory officials in achieving
insurance regulatory objectives, including the maintenance and improvement of
state regulation. From time to time various regulatory and legislative changes
have been proposed in the insurance industry, some of which could have an effect
on reinsurers. The NAIC has instituted its Financial Regulatory Accreditation
Standards Program ("FRASP") in response to federal initiatives to regulate the
business of insurance. FRASP provides a set of standards designed to establish
effective state regulation of the financial condition of insurance companies.
Under FRASP, a state must adopt certain laws and regulations, institute required
regulatory practices and procedures, and have adequate insurance department
personnel to enforce such items in order to become an "accredited" state. The
NAIC determines whether individual states should be accredited, and each state's
accreditation is determined by the NAIC periodically. If a state is not
accredited or loses its accreditation, accredited states are not able to accept
certain financial examination reports of insurers prepared solely by the
regulatory agency in such unaccredited state. The state of Maryland is currently
accredited under FRASP.

Operations of Platinum UK and Platinum Bermuda

Platinum UK and Platinum Bermuda are not admitted to do business in the
U.S. However, the insurance laws of each state of the United States and of many
other countries regulate the sale of insurance and reinsurance within their
jurisdictions by non-domestic insurers and reinsurers such as Platinum UK and
Platinum Bermuda, which are not admitted to do business within such
jurisdictions. Such sale of insurance or reinsurance within a jurisdiction where
the insurer is not admitted to do business is generally prohibited. We do not
intend that Platinum Bermuda maintain an office or solicit, advertise, settle
claims or conduct other insurance activities in any jurisdiction other than
Bermuda--or, in the case of Platinum UK, London--where the conduct of such
activities would require Platinum UK and Platinum Bermuda to be so admitted.

In addition to the regulatory requirements imposed by the jurisdictions
in which they are licensed, reinsurers' business operations are affected by
regulatory requirements in various states of the United States governing "credit
for reinsurance" which are imposed on their ceding companies. In general, a
ceding company which obtains reinsurance from a reinsurer that is licensed,
accredited or approved by the jurisdiction or state in which the reinsurer files
statutory financial statements is permitted to reflect in its statutory
financial statements a credit in an aggregate amount equal to the liability for
unearned premiums (which are that portion of premiums written which applies to
the unexpired portion of the policy period) and loss reserves and loss expense
reserves ceded to the reinsurer. Platinum UK and Platinum Bermuda are not
licensed, accredited or approved in any state in the U.S. The great majority of
states, however, permit a credit to statutory surplus resulting from reinsurance
obtained from a non-licensed or non-accredited reinsurer to be offset to the
extent that the reinsurer provides a letter of credit or other acceptable
security arrangement. A few states do not allow credit for reinsurance ceded to
non-licensed reinsurers except in certain limited circumstances and others
impose additional requirements that make it difficult to become accredited.
Platinum UK or Platinum Bermuda may be subject to reinsurance premium excise
taxes in the US (1%) and certain other jurisdictions.

We do not believe that Platinum UK and Platinum Bermuda are in
violation of insurance laws of any jurisdiction in the U.S. There can be no
assurance, however, that inquiries or challenges to Platinum UK's or Platinum
Bermuda's reinsurance activities will not be raised in the future.

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U.K. REGULATION

General

The framework for supervision of insurance companies in the U.K. is
largely formed by EU Directives which are required to be implemented in member
states through national legislation. Directives aim to harmonize insurance
regulation and supervision throughout the EU by laying down minimum standards in
key areas, and requiring member states to give mutual recognition to each
other's standards of prudential supervision.

On December 1, 2001, the FSA assumed its full powers and
responsibilities under FSMA. The FSA is now the single statutory regulator
responsible for regulating deposit taking, insurance, investment and most other
financial services business. It is a criminal offense for any person to carry on
a regulated activity in the U.K. unless that person is authorized by the FSA or
falls under an exemption.

Insurance business (which includes reinsurance business) is authorized
and supervised by the FSA. Insurance business in the U.K. is divided between two
main categories: long-term insurance (which is primarily investment-related) and
general insurance (for example, building and contents cover and motor
(automobile) insurance). Under FSMA, effecting or carrying out any contract of
insurance, whether general or long-term, is a regulated activity requiring
authorization.

Platinum UK has applied to the FSA to write the business conducted by
St. Paul Re in the United Kingdom. Platinum UK may not be licensed by the FSA at
the time of the completion of the Public Offering. The issuance of the license
is at the discretion of the FSA and we may not be able to obtain such a license.
Until the earlier of the first anniversary of the completion of the Public
Offering or Platinum UK obtaining the required license, we will have the right
to underwrite specified reinsurance business on behalf of St. Paul. Platinum US
will reinsure all such business, together with certain other business written by
St. Paul Re UK since January 1, 2002. If Platinum UK does not obtain a license
by the first anniversary of the completion of the Public Offering, or if the
license it obtains contains material limitations, our results of operations
could be materially adversely affected, and we may not be able to conduct our UK
operations in the manner described in this prospectus.

Supervision

In its role as supervisor of insurance companies, the primary objective
of the FSA is to fulfill its responsibilities under the FSMA regime relating to
the safety and soundness of insurance companies with the aim of strengthening,
but not guaranteeing, the protection of insureds. The FSA carries out this
prudential supervision of insurance companies through the collection of
information from statistical returns, through review of accountants' reports, by
visits to insurance companies and through regular formal interviews.

The FSA has adopted a risk-based approach to the supervision of
insurance companies. Under this approach the FSA performs a formal risk
assessment of every insurance company or group carrying on business in the U.K.
during each supervisory period, which varies in length according to the risk
profile of the insurer. The FSA performs the risk assessment by analyzing
information which it receives during the normal course of its supervision, such
as regular prudential returns on the financial position of the insurance
company, or which it acquires through a series of meetings with senior
management of the insurance company. After each risk assessment, the FSA will
inform the insurer of its views on the insurer's risk profile. This will include
details of any remedial action which the FSA requires and the likely
consequences if this action is not taken.

Solvency Requirements

The Interim Prudential Sourcebook for Insurers requires that insurance
companies maintain a margin of solvency at all times in respect of any general
insurance undertaken by the insurance

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company, the calculation of which in any particular case depends on the type and
amount of insurance business a company writes. The method of calculation of the
solvency margin is set out in the Interim Prudential Sourcebook for Insurers,
and for these purposes, an insurer's assets and its liabilities are subject to
specific valuation rules set out in the Interim Prudential Sourcebook for
Insurers. Failure to maintain the required solvency margin is one of the grounds
on which wide powers of intervention conferred upon the FSA may be exercised.

Restrictions on Dividend Payments

English law prohibits Platinum UK from declaring a dividend to its
stockholders unless it has "profits available for distribution". The
determination of whether a company has profits available for distribution is
based on its accumulated realized profits less its accumulated realized losses.
While the United Kingdom insurance regulatory laws impose no statutory
restrictions on a general insurer's ability to declare a dividend, the FSA
strictly controls the maintenance of each insurance company's solvency margin
within its jurisdiction and may restrict Platinum UK from declaring a dividend
at a level which the FSA determines would adversely affect Platinum UK's
solvency requirements. It is common practice in the United Kingdom to notify the
FSA in advance of any significant dividend payment.

Reporting Requirements

U.K. insurance companies must prepare their financial statements under
the Companies Act 1985 (as amended), which requires the filing with Companies
House of audited financial statements and related reports. Under the Interim
Prudential Sourcebook for Insurers, audited accounts must be filed with the FSA
within 2 months and 15 days (or 3 months where the delivery of accounts is made
electronically).

Equalization Reserves

Each insurance company writing property, aviation, marine, business
interruption or nuclear insurance or reinsurance business is required by the
Interim Prudential Sourcebook for Insurers to maintain an equalization reserve
in respect of business written in the financial years ending on or after
December 23, 1996 calculated in accordance with the provisions of the Interim
Prudential Sourcebook for Insurers.

Insurance companies writing credit insurance business must maintain
equalization reserves calculated in accordance with certain provisions of the
Interim Prudential Sourcebook for Insurers as related specifically to credit
insurance business.

Supervision of Management

The FSA closely supervises the management of insurance companies
through the approved persons regime, by which any appointment of persons to a
position of significant influence within an authorized person must be approved
by the FSA. The FSA also has the authority to require there to be one or more
independent directors on the board of directors of an insurance company.

Change of Control

FSMA regulates the acquisition of "control" of any U.K. insurance
company authorized under FSMA. Any company or individual that (together with its
or his associates) directly or indirectly acquires 10% or more of the shares in
the parent company of a U.K. authorized insurance company, or is entitled to
exercise or control the exercise of 10% or more of the voting power in such a
parent company, would be considered to have acquired "control" for the purposes
of the relevant legislation, as would a person who had significant influence
over the management of such parent company by virtue of his shareholding in it.
A purchaser of more than 10% of the Common Shares would therefore be considered
to have acquired "control" of Platinum UK.

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Under FSMA, any person proposing to acquire "control" over a U.K.
authorized insurance company must give prior notification to the FSA of his
intention to do so. The FSA would then have three months to consider that
person's application to acquire "control". In considering whether to approve
such application, the FSA must be satisfied that both the acquirer is a fit and
proper person to have such "control" and that the interests of consumers would
not be threatened by such acquisition of "control". Failure to make the relevant
prior application would constitute a criminal offense.

Intervention and Enforcement

The FSA has extensive powers to intervene in the affairs of an
authorized person. FSMA imposes on the FSA statutory obligations to monitor
compliance with the requirements imposed by FSMA, and to enforce the provisions
of FSMA and its related secondary legislation. The FSA has power, among other
things, to enforce--and take disciplinary measures in respect of--breaches of
both the Interim Prudential Sourcebook for Insurers and breaches of the conduct
of business rules generally applicable to authorized persons.

FSMA permits the FSA to refer matters directly to its enforcement
division in order to implement disciplinary or regulatory action, but more
commonly enforcement action is preceded by the exercise of the FSA's
interventionist supervisory powers.

The FSA has a general power on giving notice to require information and
documents from authorized persons that the FSA reasonably requires in connection
with the exercise of its functions under the regulatory regime. The FSA also has
two distinct statutory powers to appoint investigators.

Under section 167 of FSMA, the FSA or the Secretary of State may
appoint suitably competent persons to conduct an investigation on its behalf
into the nature, conduct or state of the business of an authorized person, a
particular aspect of that business or the ownership or control of an authorized
person where there is general concern about an authorized person but the
circumstances of the case do not suggest a specific breach or contravention of
the regulatory regime.

By contrast, under section 168 of FSMA, the FSA or the Secretary of
State may order an investigation if there appear to be circumstances suggesting
that certain specified breaches or offenses under the regulatory regime have
occurred (for example, breach of the general prohibition on performing regulated
activities without suitable permission or misconduct by an approved person).
Investigators appointed under section 168 have significantly wider powers than
investigators appointed under section 167.

The FSA may also require an authorized person to provide a report
prepared by certain skilled professionals to be approved by the FSA on any
matter about which the FSA has required or could require the provision of
documents.

The FSA has many enforcement powers available to use against an
authorized or approved person. These include public censure, unlimited fines
and, in serious cases, the power to revoke or vary permission to carry on
regulated activities or an individual's approval. A serious case is one
involving, among other things, the failure of an authorized person to satisfy
the threshold conditions or the FSA considering that an approved person is no
longer fit and proper to perform the function in question. In addition, the FSA
may revoke an authorized person's permission if it is necessary to protect the
interests of consumers or potential consumers.

The FSA has further powers to obtain injunctions against authorized
persons and to impose or seek restitution orders where persons have suffered
loss. Once the FSA has made a decision to take enforcement action (other than in
the case of an application to the court for an injunction or restitution order)
against an authorized or approved person, the person affected may refer the

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matter to the Financial Services Tribunal, a quasi-judicial entity staffed and
operated independently of the FSA and administered by the Lord Chancellor's
Department. Appeal from the Tribunal on a matter of law lies to the Court of
Appeal provided that either the Tribunal or the Court of Appeal grants
permission.

Finally, the FSA is granted the power to prosecute criminal offenses
arising under FSMA, and to prosecute insider dealing under Part V of the
Criminal Justice Act 1993, and breaches of money laundering regulations. The
FSA's stated policy is to pursue criminal prosecution in all appropriate cases.

Proposed Limits on Concentration of Reinsurance Exposures

In July 2002, the FSA issued a consultation paper ("CP143") which sets
forth proposed reforms to strengthen both the capital regime and systems and
controls requirements for insurers and reinsurers subject to the FSA's
jurisdiction. CP143 includes proposals aimed at ensuring adequate
diversification of an insurer's or reinsurer's exposures to reinsurers (whether
intra- or extra-group). In particular, it proposes a rebuttable presumption that
an insurer or reinsurer must limit the gross earned premiums paid to a single
reinsurer (or group of related reinsurers) to a maximum of 20% of the insurer's
or reinsurer's projected gross earned premiums in any financial year in order to
meet prudential requirements. If an insurer or reinsurer wishes to exceed this
limit, it must first satisfy the FSA that this is appropriate. In addition, the
relevant guidance indicates that an insurer or reinsurer would be permitted to
take into account certain acceptable loss mitigation techniques, such as
effective security arrangements, in assessing the overall adequacy of the
diversification of its reinsurance exposure.

CP143 also proposes to limit an insurer's or reinsurer's exposure to a
single reinsurer (or group of related reinsurers) to 100% of its capital by
requiring it to alert its FSA supervisor if it approaches or has exceeded this
limit and explaining why it considers that prudent provision is or is not
required for the excess exposure.

CP143 is currently in draft form. The final rules and guidance, the
ultimate form of which may or may not differ from the contents of CP143, are
expected to take effect in 2004 and will apply to Platinum UK.

Substantial compliance with CP143 in its draft form is likely to be an
effective condition for receiving FSA authorisation.

IRELAND REGULATION

As a holding company, Platinum Ireland is not subject to Irish
insurance regulation. Platinum Ireland will initially function as a holding
company. In the future, it may be used to carry out reinsurance activities in
Ireland or the European Union outside of the United Kingdom, provided that the
necessary regulatory approvals are first obtained.

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MANAGEMENT

OUR DIRECTORS AND EXECUTIVE OFFICERS

We have assembled a new management team of experienced insurance
industry professionals led by Steven H. Newman, who is Chairman of the Board,
and Jerome T. Fadden, who is President and Chief Executive Officer. The
following table provides information regarding those persons who are directors
and executive officers of Platinum Holdings:

[Enlarge/Download Table]

NAME AGE POSITION AT PLATINUM HOLDINGS
---- --- -----------------------------

Steven H. Newman 59 Chairman of the Board of Directors; Chairman of the Executive
Committee

Jerome T. Fadden 45 President, Chief Executive Officer and Director; member of the
Executive Committee

Michael D. Price 35 Chief Operating Officer and Chief Underwriting Officer,
Platinum US (upon completion of the Public Offering)

William A. Robbie 51 Executive Vice President and Chief Financial Officer

Michael E. Lombardozzi 40 Executive Vice President and General Counsel

Neal J. Schmidt 45 Executive Vice President and Chief Actuary, Platinum US (upon
completion of the Public Offering)

H. Furlong Baldwin 70 Director; Chairman of the Audit Committee

Jonathan F. Bank 59 Director; member of the Compensation and Audit Committees

Dan R. Carmichael 57 Director; member of the Compensation and Audit Committees

Jay S. Fishman 49 Director; member of the Executive Committee and the
Compensation Committee

Peter T. Pruitt 69 Director; Chairman of the Compensation Committee

Biographical information about the foregoing persons for at least the
last five years is as follows:

STEVEN H. NEWMAN has been the Chairman of the Board of Platinum
Holdings since June 2002. He was Chairman of the Board of Directors of Swiss Re
America from May 2000 to October 2000, and Chairman of the Board and Chief
Executive Officer of Underwriters Re Group from 1987 to 2000. Prior to joining
Underwriters Re, Mr. Newman served as Executive Vice President and then
President of the Home Insurance Company from 1983 to 1986, and Vice President
and Casualty Actuary at American International Group from 1969 to 1982. He also
served as an Advisory Director for HCC Insurance Holdings, Inc. from November
2000 to August 2002, Chairman of the Board of GCR Holdings, a Bermuda
catastrophe reinsurer, from 1995 to 1997 and a Director of Capital Re from 1995
to 1998. Mr. Newman has served as President of the Casualty Actuarial Society
and Chairman of the Reinsurance Association of America. He has represented the
United States at United Nations conferences dealing with international insurance
and reinsurance issues.

JEROME T. FADDEN has been the President, Chief Executive Officer, and a
Director of Platinum Holdings since April 2002. In addition, he has been the
President and Chief Executive Officer of St. Paul Re since March 2002. Prior to
joining St. Paul Re, Mr. Fadden had been employed by UBS PaineWebber where he
served as Chief Financial Officer from November 1999 through March 2001, and
then Director of Strategic Development in the Office of the Chairman. Prior to
joining UBS PaineWebber, from November 1998 to August 1999, Mr. Fadden was
Executive Vice President and

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Chief Financial Officer of Equus Re, a start up reinsurance operation sponsored
by Kemper Insurance. Mr. Fadden served as Executive Vice President and Chief
Financial Officer of NAC Re Corp. from July 1996 through September 1998. Mr.
Fadden served in a variety of senior management positions at The Travelers
Group, including Treasurer as well as Chief Financial Officer of The Travelers
Group's property and casualty insurance unit, The Gulf Insurance Group.

MICHAEL D. PRICE will be the Chief Operating Officer and Chief
Underwriting Officer of Platinum US upon completion of the Public Offering and
has been Chief Underwriting Officer of St. Paul Re since June 2002. Mr. Price
served as Chief Operating Officer of Associated Aviation Underwriters
Incorporated, which is a subsidiary of Global Aerospace Underwriting Managers
Ltd. specializing in aerospace insurance, from March 2001 through May 2002. He
was Senior Vice President and Chief Underwriting Officer of Underwriters Re
Group, Inc. from May 1998 until the acquisition of Underwriters Re Group, Inc.
by Swiss Re America Holding Corporation in May 2000; thereafter, Mr. Price held
the position of Chief Underwriting Officer at Swiss Re America Holding
Corporation until September 2000. From July 1995 through May 1998, Mr. Price was
employed by London Life and Casualty Reinsurance Corporation, most recently as
President, and prior thereto he was a project manager at Milliman and Robertson,
Inc. He is a fellow of the Casualty Actuarial Society and a member of the
American Academy of Actuaries.

WILLIAM A. ROBBIE has been Executive Vice President and Chief Financial
Officer of Platinum Holdings since September 2002. Mr. Robbie became Executive
Vice President and Chief Financial Officer of St. Paul Re in August 2002. Mr.
Robbie has held various positions with XL Capital Ltd. and its subsidiaries
since 1997, including Executive Vice President--Financial Services, Senior Vice
President--Treasurer and Executive Vice President, Chief Financial Officer and
Chief Administrative Officer of XL Mid Ocean Reinsurance in Hamilton, Bermuda.
Mr. Robbie also has held senior management positions with several insurance
companies, including the Prudential Insurance Company of America, The
Continental Corporation, Monarch Capital Corporation and Aetna Life & Casualty.
Mr. Robbie began his career with Ernst & Ernst (now Ernst & Young LLP) and is a
certified public accountant.

MICHAEL E. LOMBARDOZZI has been Executive Vice President and General
Counsel of Platinum Holdings since September 2002. Mr. Lombardozzi became
Executive Vice President and General Counsel of St. Paul Re in August 2002. Mr.
Lombardozzi was Senior Vice President--Planning and Operations of W.R. Berkley
Corporation from December 2001 to July 2002. From January 2001 to June 2001 he
was Senior Vice President, Secretary and General Counsel of Orius Corp. From
January 1994 to January 2001 he was Senior Vice President, Secretary and General
Counsel of Berkley Insurance Company. From 1986 to 1994 he was an associate with
the law firm of Willkie Farr & Gallagher.

NEAL J. SCHMIDT has been an Executive Vice President and Chief Actuary
of St. Paul Re since 1998 and will serve as Executive Vice President and Chief
Actuary of Platinum US upon completion of the Public Offering. Mr. Schmidt
served as the Senior Vice President-Specialty Lines Underwriting of St. Paul Re
from 1995 through 1998 and as Chief Actuary from 1986 through 1995. Prior to
joining St. Paul Re, he held positions in reinsurance and insurance with the
Home Insurance Company. Mr Schmidt is a fellow of the Casualty Actuarial Society
and a Member of the American Academy of Actuaries.

H. FURLONG BALDWIN is the Chairman of Mercantile Bankshares
Corporation, which is a bank holding corporation. Mr. Baldwin began his career
with Mercantile in 1956 when it was known as the Mercantile-Safe Deposit & Trust
Company, eventually becoming President and then Chief Executive Officer of the
company, a position he held from 1976 until 2001. He is a Governor of the
National Association of Securities Dealers, a past chairman of the Association
of Bank Holding Companies and a past president of the Maryland Bankers
Association. Mr. Baldwin is a trustee of the Marine Corps Heritage Foundation,
the Marine Corps University and the Virginia Historical Society and is a member
of the Council on Foreign Relations. From May 1998 to May 2002,

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Mr. Baldwin was a director of St. Paul and from 1968 to 1998, he was a director
of USF&G Corporation, which was acquired by St. Paul in 1998.

JONATHAN F. BANK has been Senior Vice President of Tawa Associates
Ltd., which is engaged in the acquisition, restructuring and management of
property and casualty companies in run off, since May 2001. From September 1999
through May 2001, he was the Insurance Practice Leader of
PricewaterhouseCoopers' U.S. insurance/reinsurance regulatory and restructuring
practice group. Prior thereto, Mr. Bank was a partner at the law firm of
Chadbourne & Parke LLP, where he specialized in insurance and reinsurance
dispute resolution and related regulatory matters. Mr. Bank is a member of the
state bars of California, New York and Nebraska. He also served on the Advisory
Committee on Reinsurance for the National Association of Insurance
Commissioners.

DAN R. CARMICHAEL has been President, Chief Executive Officer and a
director of Ohio Casualty Corporation, a property and casualty insurance
company, since December 2000. From 1995 through 2000, Mr. Carmichael served as
President and Chief Executive Officer of IVANS, Inc., an industry-owned
organization that provides electronic communications services to insurance,
healthcare and related organizations. Prior thereto, he served as Chairman,
President and Chief Executive Officer of Anthem Casualty Insurance Group. Mr.
Carmichael is also a director of Alleghany Corporation, a holding company
engaged through its subsidiaries in the insurance, industrial minerals and steel
fasteners businesses, and he serves as a trustee of the American Institute for
Chartered Property Casualty Underwriters, the Insurance Institute of America and
the Griffith Foundation for Insurance Education.

JAY S. FISHMAN has been the Chairman, Chief Executive Officer and
President of The St. Paul Companies, Inc., and director of The John Nuveen
Company, since October 2001. Prior to that date, Mr. Fishman was employed as
Chairman, President and Chief Executive Officer of The Travelers Insurance Group
and as Chief Operating Officer--Finance and Risk of Citigroup, Inc. Mr. Fishman
held various executive positions with Citigroup and its predecessor since 1989
and with Travelers since 1993.

PETER T. PRUITT was Chairman of Willis Re Inc., a reinsurance
intermediary, from June 1995 until his retirement in December 2001. He also
served as Chief Executive Officer of Willis Re Inc. from June 1995 through
September 1999, and as Executive Vice President of Willis Corroon Corporation
from November 1993 through June 1995. Prior thereto, Mr. Pruitt held various
positions at Frank B. Hall & Co., an insurance brokerage firm, including
President and Chief Operating Officer from August 1985 through November 1992.
Mr. Pruitt served as a trustee of the College of Insurance (now St. John's
University School of Risk Management) from 1986 until his retirement in 2001. He
also served as a trustee of the Insurance Institute of America and the American
Institute for Property and Liability Underwriters.

NUMBER AND TERMS OF DIRECTORS

Our Board of Directors consists of seven members, each of whose term of
office will expire at the annual shareholders' meeting in 2003. Under our
bye-laws, directors will be elected at each annual general meeting of
shareholders, in each case by an ordinary resolution of the shareholders.
Candidates for election will be nominated by us, acting through our Board of
Directors. In connection with the RenaissanceRe Investment, we have agreed to
nominate at our next meeting of shareholders, and to use our commercially
reasonable efforts to cause the election of, one director designated by
RenaissanceRe to the Board.

Pursuant to the Investment Agreement we have entered into with
RenaissanceRe and St. Paul, for three years from the anniversary of the date of
the completion of the Public Offering, we will not increase the number of
directors on our Board of Directors to more than nine without the prior written
consent of RenaissanceRe, such consent to be provided in RenaissanceRe's sole
discretion. This three-year period will be extended for up to an additional two
years so long as RenaissanceRe is accounting for its investment in us via the
equity method and RenaissanceRe reasonably believes

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that its ability to continue to equity account for its investment in us would be
compromised by an increase in the number of directors.

Directors may take action by a majority of the votes cast at a duly
called and held meeting at which a quorum is present. A majority of directors in
office at any time, or such greater number as the shareholders may from time to
time determine, constitutes a quorum for all purposes.

The foregoing summarizes certain provisions of our bye-laws, which are
subject to Bermuda law. See "Description of Our Common Shares".

COMMITTEES OF THE BOARD OF DIRECTORS

Our Board of Directors has an Executive Committee, a Compensation
Committee and an Audit Committee, each of which reports to the Board. The
Executive Committee has the authority to oversee our general business and
affairs to the fullest extent permitted by Bermuda law. The Compensation
Committee has the authority to establish compensation policies and recommend
compensation programs to the Board of Directors; it also administers the 2002
Share Incentive Plan and the Capital Accumulation Plan, as described below. The
Audit Committee is responsible for meeting with our independent accountants
regarding, among other issues, audits and adequacy of our accounting and control
systems. The Audit Committee consists entirely of independent directors. Recent
legislation and New York Stock Exchange initiatives would require, among other
things, the establishment of a Nominating Committee and a Corporate Governance
Committee, as well as the independence of all members of the Audit,
Compensation, Nominating and Corporate Governance Committees. We are reviewing
these requirements and expect to comply with them by their effective dates. In
connection with the RenaissanceRe Investment, we have agreed to use our
commercially reasonable efforts to cause the appointment of the director
designated by RenaissanceRe to the Board's Executive Committee and, subject to
applicable law, rules and regulations, to the Board's Nominating and Corporate
Governance Committees, if any.

COMPENSATION OF DIRECTORS

The Company will compensate each director (other than any director who
is an employee of the Company) in the amount of $25,000 per year as a retainer
fee and an additional $2,500 per meeting of the Board of Directors if the
director attends in person, or an additional $1,000 per meeting if the director
attends by telephone. The Company will compensate directors in the amount of
$1,500 per meeting of any Board committee attended by such director and an
additional $5,000 per year for each committee chairperson. The Compensation
Committee of the Board of Directors is in the process of re-evaluating certain
of these fees in light of the increase in duties and responsibilities of
directors occasioned by recent legislative initiatives relating to corporate
governance, and will present its recommendations to the full Board of Directors.
In light of such re-evaluation, some of these fees may be increased after the
completion of the Public Offering. Fees for the Chairman of the Board and
proposed stock option grants for non-employee directors are described below.

PLATINUM SHARE UNIT PLAN FOR NONEMPLOYEE DIRECTORS

Platinum has adopted a Share Unit Plan for Nonemployee Directors which
will become effective upon the completion of the Public Offering. Under the
Share Unit Plan, 50% of all fees earned by a nonemployee director (including
retainer fees, meeting fees and committee fees) during each calendar quarter are
automatically converted into the number of "Share Units" that have a value at
the end of such calendar quarter equal to the amount of fees earned. Each Share
Unit is a non-voting unit of measurement which is valued at the public trading
price of the Common Shares. In addition to the 50% mandatory deferral, each
nonemployee director may elect to have up to a total of 100% of the director's
fees converted into Share Units, provided the election is made before the start
of the calendar year in which the fees are earned. A nonemployee director will
receive distributions under the Share Unit Plan following the expiration of 5
calendar years following the year in which his fees were originally converted
into Share Units, or following termination of his

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service on the Board of Directors, if earlier. Each distribution under the Share
Unit Plan will be made, at the discretion of the Board, either in cash or in
Common Shares or some combination thereof.

NON-QUALIFIED SHARE OPTIONS FOR NONEMPLOYEE DIRECTORS

Under Platinum's 2002 Share Incentive Plan described below, an initial
non-qualified share option covering 25,000 Common Shares will be granted to each
of the nonemployee directors other than Mr. Newman upon the completion of the
Public Offering at the initial public offering price. The options will have a
ten-year term and will vest in equal annual installments on each of the first
three anniversaries of the date of grant, subject to accelerated vesting in the
event of a "Change in Control" (as defined in the Share Incentive Plan).
Following the Public Offering, nonemployee directors will be eligible to receive
option grants under the Share Incentive Plan in the sole discretion of the
Compensation Committee.

ARRANGEMENTS WITH THE CHAIRMAN OF THE BOARD

Mr. Newman has entered into a letter agreement with St. Paul (which
will be assigned to Platinum Holdings upon completion of the Public Offering),
pursuant to which he agreed to serve as Chairman of Platinum Holdings' Board of
Directors upon completion of the Public Offering. As Chairman of the Board, he
will be entitled to receive an annual fee of $60,000 and a fee of $5,000 for
each meeting of the Board of Directors that he attends (not to exceed $20,000
per year). Upon completion of the Public Offering, Mr. Newman will receive a
stock option grant to purchase 975,000 Common Shares at the initial public
offering price. The option will have a ten-year term and will vest in equal
annual installments on each of the first three anniversaries of the date of
grant. Under the agreement, Platinum Holdings will indemnify Mr. Newman, to the
fullest extent permitted by law, if he is made or threatened to be made a party
to a proceeding by reason of his being or having been a director of Platinum
Holdings.

Mr. Newman also has entered into a letter agreement with St. Paul
(which will be assigned to Platinum US upon completion of the Public Offering),
pursuant to which he will provide consulting services to Platinum US through
February 28, 2005 (which date may be automatically extended from year to year).
During the consulting term, Mr. Newman will perform services as reasonably
requested, including assisting with the establishment and development of the
reinsurance business of Platinum US. During the consulting term, Mr. Newman will
receive an annual consulting fee of $270,000 and will be eligible to receive an
annual incentive equal to $440,000 at target, and a maximum incentive equal to
200% of target following the Public Offering; provided that he will receive, no
later than February 28, 2003, a minimum incentive for calendar year 2002 of
$366,670. The objectives for Mr. Newman's annual incentive following the Public
Offering will be determined by the Compensation Committee of the Board of
Directors of Platinum Holdings in consultation with Mr. Newman. On April 15,
2002, Mr. Newman received a one-time incentive payment of $100,000 from St.
Paul. Mr. Newman is subject to certain confidentiality, non-compete and
non-solicitation provisions under the agreement. Mr. Newman's consulting
services for Platinum US will be performed through SHN Enterprises, Inc., which
he has established for estate planning purposes and of which he is the sole
shareholder.

OUR EXECUTIVE OFFICERS

The following information is a summary of the employment arrangements
that we expect to be applicable to our President and Chief Executive Officer and
our other executive officers, and a description of the incentive plans that we
expect to be in place, upon completion of the Public Offering:

JEROME T. FADDEN. Mr. Fadden has an employment agreement with St. Paul
for a five-year term that began March 4, 2002, subject to one-year renewal terms
thereafter, pursuant to which he has agreed to serve as our President and Chief
Executive Officer. Upon the completion of the Public Offering, St. Paul will
assign all of its rights and obligations under the employment

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agreement to Platinum Holdings. Mr. Fadden will receive a base annual salary of
at least $650,000 following the Public Offering. He will be eligible to receive
a target annual bonus of 125% of base salary and a maximum annual bonus of 200%
of the target bonus following the Public Offering, and for 2002 he will receive
a minimum annual bonus of 125% of his base annual salary. The objectives for Mr.
Fadden's annual bonus will be determined by the Compensation Committee of the
Board of Directors, in consultation with Mr. Fadden. The agreement provides for
the purchase and maintenance by Platinum of a term life insurance policy in the
amount of $4 million payable to a beneficiary designated by Mr. Fadden, and that
Mr. Fadden will be entitled to the reimbursement of reasonable Bermuda housing
expenses, among other employee benefits and perquisites specified in the
agreement. On June 1, 2002, Mr. Fadden received a sign-on bonus of $250,000 from
St. Paul. Mr. Fadden also received an initial grant of stock options to purchase
up to 100,000 shares of St. Paul common stock, which are subject to the terms of
the St. Paul 1994 Stock Plan and which vest in four equal annual installments on
the first four anniversaries of the date of grant. Upon completion of the Public
Offering, Mr. Fadden will forfeit such St. Paul stock options to the extent they
are unvested and will receive a stock option grant to purchase 975,000 Common
Shares at the initial public offering price. The options will have a ten-year
term and will vest in equal annual installments on each of the first three
anniversaries of the date of grant.

If Mr. Fadden's employment is terminated by us without "cause" or by
Mr. Fadden for "good reason" (each as defined in the agreement), he will receive
a payment equal to three times the sum of his base salary and the greater of his
target bonus and his bonus for the preceding year, and any base salary or other
amounts accrued or owing through the date of termination, provided that Mr.
Fadden executes a release of claims, and up to three years of medical and dental
coverage and immediate vesting of all outstanding stock options. In addition,
all outstanding stock options will remain exercisable for the lesser of five
years and the remainder of their term. If Mr. Fadden's employment is terminated
by us for cause or by Mr. Fadden other than for good reason, he will receive no
further payments, compensation or benefits under the agreement (other than
amounts accrued prior to termination of employment) and all vested options will
remain exercisable for 30 days after termination. In the event his employment is
terminated due to death or "disability" (as defined in the agreement), he will
receive his base salary through the date of termination and an annual bonus (at
target level), prorated through the date of termination. In addition, all
outstanding stock options will immediately vest and will remain exercisable (but
not beyond their term) for three years, in the case of a disability termination,
and one year, in the case of death. In the event Mr. Fadden's employment is
terminated under circumstances described in the agreement within two years after
a change in control of the Company, Mr. Fadden will be entitled to certain
severance benefits substantially as described above. In the event Mr. Fadden is
subject to excise tax on any severance payments made to him under the agreement,
we will make a gross-up payment to compensate him for such tax liability. Mr.
Fadden is subject to certain confidentiality, non-compete and non-solicitation
provisions under the agreement.

MICHAEL D. PRICE. Mr. Price has an employment agreement with St. Paul
Re for a three-year term beginning June 3, 2002. Upon the completion of the
Public Offering, St. Paul Re will assign all of its rights and obligations under
the employment agreement to Platinum US. Assuming completion of the Public
Offering, Mr. Price will serve as the Chief Operating Officer and Chief
Underwriting Officer of Platinum US following the Public Offering. Mr. Price
will receive a minimum base annual salary of at least $400,000 for the first
year of his term, $420,000 for the second year and $440,000 for the third year
following the Public Offering, and he will be eligible to receive a minimum
annual bonus of 50% of base salary. On June 3, 2002, Mr. Price received a
sign-on bonus of $100,000 from St. Paul Re. Upon completion of the Public
Offering, Mr. Price will receive a stock option grant to purchase 300,000 Common
Shares at the initial public offering price. The option will have a ten-year
term and will vest, subject to continued employment, in three equal annual
installments on each of the first two anniversaries of the completion of the
Public Offering and on

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June 3, 2005. Mr. Price is also entitled to the reimbursement of reasonable
moving and temporary housing expenses (not exceeding $30,000).

If Mr. Price's employment is terminated by Platinum US without "cause"
or by Mr. Price for "good reason" (each as defined in the agreement), he will
receive a payment equal to any bonus payments to which he would have been
entitled during the term of the agreement which have not been previously paid,
50% of his then current base salary and any base salary or other amounts accrued
and owing through the date of termination, provided that Mr. Price executes a
release of claims. If Mr. Price's employment is terminated by Platinum US for
cause or by Mr. Price other than for good reason, he will receive no further
payments, compensation or benefits under the agreement (other than amounts
accrued prior to termination of employment). Mr. Price is subject to certain
confidentiality and non-solicitation provisions under the agreement.

WILLIAM A. ROBBIE. Mr. Robbie has an employment agreement with St. Paul
Re for a three-year term beginning August 5, 2002, subject to one-year renewal
terms thereafter. Upon the completion of the Public Offering, St. Paul Re will
assign all of its rights and obligations under the employment agreement to
Platinum Holdings. Assuming completion of the Public Offering, Mr. Robbie serves
as Executive Vice President and Chief Financial Officer of Platinum Holdings.
Mr. Robbie will receive a base annual salary of at least $350,000 following the
Public Offering. He will be eligible to receive a target annual bonus of 75% of
base salary, and for 2002 he will receive a minimum annual bonus of 50% of base
salary prorated for the period of his employment with St. Paul Re and Platinum
Holdings during the year. On August 5, 2002, Mr. Robbie received a sign-on bonus
of $200,000 from St. Paul Re. Upon completion of the Public Offering, Mr. Robbie
will receive a stock option grant to purchase 150,000 Common Shares at the
initial offering price. The option will have a ten-year term and will vest,
subject to continued employment, in equal annual installments on each of the
first four anniversaries of the completion of the Public Offering. Mr. Robbie
will be entitled to the reimbursement of reasonable housing and living expenses
(not exceeding $15,000 per month) following completion of the Public Offering to
the extent that he establishes a residence in Bermuda.

If Mr. Robbie's employment is terminated by Platinum Holdings without
"cause" or by Mr. Robbie for "good reason" (each as defined in the agreement),
he will receive a payment equal to the sum of one year's base salary and target
bonus and any base salary or other amounts accrued or owing through the date of
termination, provided that Mr. Robbie executes a release of claims. If Mr.
Robbie's employment is terminated by Platinum Holdings for cause or by Mr.
Robbie for other than good reason, he will receive no further payments,
compensation or benefits under the agreement (other than amounts accrued prior
to termination of employment). Mr. Robbie is subject to certain confidentiality
and non-solicitation provisions under the agreement.

MICHAEL E. LOMBARDOZZI. Mr. Lombardozzi has an employment agreement
with St. Paul Re for a three-year term beginning August 5, 2002, subject to
one-year renewal terms thereafter. Upon the completion of the Public Offering,
St. Paul Re will assign all of its rights and obligations under the employment
agreement to Platinum Holdings. Mr. Lombardozzi serves as Executive Vice
President and General Counsel of Platinum Holdings. Mr. Lombardozzi will receive
a base annual salary of at least $350,000 following the Public Offering. He will
be eligible to receive a target annual bonus of 75% of base salary and a minimum
annual bonus of 50% of base salary for the 2003 and 2004 calendar years, and for
2002 he will receive a minimum annual bonus of 50% of base salary prorated for
the period of employment with St. Paul Re and Platinum Holdings during the year.
On August 5, 2002, Mr. Lombardozzi received a sign-on bonus of $275,000 from St.
Paul Re. Upon completion of the Public Offering, Mr. Lombardozzi will receive a
stock option grant to purchase 150,000 Common Shares at the initial offering
price. The option will have a ten-year term and will vest, subject to continued
employment, in equal annual installments on each of the first four anniversaries
of the completion of the Public Offering. Mr. Lombardozzi will be entitled to
the reimbursement of reasonable housing and living expenses (not exceeding
$15,000 per month)

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following completion of the Public Offering to the extent that he establishes a
residence in Bermuda.

If Mr. Lombardozzi's employment is terminated by Platinum Holdings
without "cause" or by Mr. Lombardozzi for "good reason" (each as defined in the
agreement), he will receive a payment equal to the sum of one year's base salary
and target bonus and any base salary or other amounts accrued or owing through
the date of termination, provided that Mr. Lombardozzi executes a release of
claims. If Mr. Lombardozzi's employment is terminated by Platinum Holdings for
cause or by Mr. Lombardozzi for other than good reason, he will receive no
further payments, compensation or benefits under the agreement (other than
amounts accrued prior to termination of employment). Mr. Lombardozzi is subject
to certain confidentiality and non-solicitation provisions under the agreement.

NEAL J. SCHMIDT. Mr. Schmidt will serve as Executive Vice President and
Chief Actuary of Platinum US following the Public Offering. Mr. Schmidt will
receive a base annual salary of $350,000 following the Public Offering, and he
will be eligible to receive a target annual bonus of 75% of base salary. For
2002, he will receive an annual bonus of at least $175,000 provided that he is
continuously employed by St. Paul Re or Platinum US through the date of payment,
which is expected to be March 31, 2003, or if his employment is terminated other
than for cause prior to that date. In addition to an annual bonus, Mr. Schmidt
will receive, no later than July 1, 2004, a retention bonus of $175,000 provided
that he is continuously employed by St. Paul Re or Platinum US through July 1,
2004 or if his employment is terminated other than for cause prior to that date.
Upon completion of the Public Offering, Mr. Schmidt will receive a stock option
grant to purchase 150,000 Common Shares at the initial public offering price.
The option will have a ten-year term and will vest, subject to continued
employment, in equal annual installments on each of the first four anniversaries
of the date of grant.

PLATINUM 2002 SHARE INCENTIVE PLAN

Platinum has adopted the 2002 Share Incentive Plan, which will become
effective upon completion of the Public Offering. The Plan provides for the
grant of share options, share appreciation rights, share units and restricted
shares. The material features of the Plan are summarized below.

Purpose. The purpose of the Plan is to advance the interests of the
Company and its shareholders by attracting, retaining and motivating key
personnel upon whose judgment, initiative and effort the successful conduct of
the Company's operations is largely dependent. The Plan is also intended to
further align the interests of employees, officers, agents, consultants,
advisors and directors with those of the shareholders by promoting the ownership
of Common Shares by these individuals.

Reservation of Shares. A total of 6,000,000 Common Shares are reserved
for issuance under the Plan (including Common Shares reserved for issuance to
our directors and executive officers set forth in any employment or consulting
agreement), which will be made available from authorized but unissued shares or
from reacquired shares. If any shares that are the subject of an award are not
issued and cease to be issuable for any reason, these shares will no longer be
charged against the maximum share limitations and may again be made subject to
awards. In addition, the number of Common Shares exchanged by a participant as
payment to Platinum Holdings of the exercise price or tax withholding upon
exercise of an option will be added to the share reserve. The maximum number of
Common Shares that may be made subject of restricted share awards under the Plan
is limited to 1,000,000 Common Shares. In the event of recapitalizations,
reclassifications or other specified events affecting Platinum or the Common
Shares, appropriate and equitable adjustments may be made to the number and kind
of shares available for grant, as well as to other maximum limitations, under
the Plan, and the number and kind of shares or other rights and prices under
outstanding awards.

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Administration. The Plan will be administered by the Compensation
Committee of the Board of Directors of Platinum Holdings. The Compensation
Committee shall, to the extent deemed necessary or advisable by the Board, be
constituted so as to comply with the "non-employee director" requirements of
Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the "outside director" requirements of Section 162(m) of the Code.
Subject to the limitations set forth in the Plan, the Compensation Committee has
the authority to determine the persons to whom awards are granted, the types of
awards to be granted, the time at which awards will be granted, the number of
shares, units or other rights subject to each award, the exercise, base or
purchase price of an award, the time or times at which the award will become
vested, exercisable or payable, and the duration of the award. The Compensation
Committee will have the right, from time to time, to delegate to one or more
officers of the Company the authority of the Committee to grant and determine
the terms and conditions of awards, subject to certain limitations.

Eligibility. Awards under the Plan may be granted to any employee,
officer, director, agent, consultant or advisor of Platinum Holdings or any of
its subsidiaries. Recipients of awards will be selected from time to time by the
Compensation Committee in its sole discretion.

Share Options. Share options granted under the Plan may be issued as
either incentive options (within the meaning of Section 422 of the Code), or as
non-qualified options. The exercise price of an option will be determined by the
Compensation Committee, provided that the exercise price per share will not be
less than the fair market value of a Common Share on the date of the grant of
the option. The Compensation Committee will determine the vesting requirements
and the term of exercise of each option, including the effect of termination of
employment or service of a participant. The maximum term of a share option will
be ten years from the date of grant. To exercise an option, the participant must
pay the exercise price, subject to specified conditions, in cash or in Common
Shares that have been held for at least six months, through a broker-assisted
"cashless exercise", by combination of any of the above methods or other method
approved by the Compensation Committee, and must pay any required tax
withholding amounts. The Compensation Committee may also grant "reload options"
for the number of Common Shares tendered by a participant to cover the exercise
price or withholding tax upon the exercise of a share option under the Plan.
Under the Code, the maximum value of Common Shares (determined at the time of
grant) that may be subject to incentive options that become exercisable by an
employee in any one year is limited to $100,000. The maximum number of Common
Shares that may be covered under options granted under the Plan to any
individual in any calendar year is 1,000,000 Common Shares.

Share Appreciation Rights. A share appreciation right may be granted
either in tandem with an option or without a related option. A share
appreciation right entitles the participant, upon exercise, to receive a payment
based on the excess of the fair market value of a Common Share on the date of
exercise over the base price of the right (which may not be less than the fair
market value of a Common Share on the date of grant), multiplied by the number
of shares as to which the right is being exercised. The maximum term of a share
appreciation right will be ten years from the date of grant. No more than
1,000,000 Common Shares may be subject to share appreciation rights granted
under the Plan to any one participant during any calendar year. Share
appreciation rights may be payable in cash or in Common Shares or in a
combination of both. Share appreciation rights may also be granted together with
related dividend equivalent rights.

Share Units. An award of share units gives the participant the right to
receive payment at the end of a vesting period based on the value of the Common
Share at the time of vesting. Share units are subject to vesting requirements,
restrictions and conditions to payment as the Compensation Committee determines
are appropriate. Such vesting requirements may be based on the continued
employment of the participant for a specified time period or on the attainment
of specified business performance goals established by the Committee. Share unit
awards are payable

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in cash or in Common Shares or in a combination of both. Share units may also be
granted together with related dividend equivalent rights.

Restricted Share Awards. A restricted share award represents Common
Shares that are issued subject to restrictions on transfer and vesting
requirements as determined by the Compensation Committee. Vesting requirements
may be based on the continued employment of the participant for specified time
periods and on the attainment of specified business performance goals
established by the Compensation Committee. Subject to the transfer and vesting
restrictions of the award, the participant will have the rights of a shareholder
of Platinum Holdings, including all voting and dividend rights, during the
restriction period, unless the Committee determines otherwise at the time of the
grant.

Change In Control. The Compensation Committee may, in an award
agreement, provide for the effect of a change in control on an award. These
provisions may include the acceleration of vesting of an award, the elimination
or modification of performance or other conditions, the extension of the time
for exercise or realizing gain from an award, the acceleration of payment, cash
settlement of an award or other adjustments that the Compensation Committee
considers appropriate.

Term; Amendment and Termination. The term of the Plan is 10 years. The
Board may terminate or amend the Plan at any time, subject to shareholder
approval under certain circumstances provided in the Plan. However, no
termination or amendment of the Plan will adversely affect the rights under any
previously granted award.

Effective upon completion of the Public Offering, each of Messrs.
Newman and Fadden will receive options to purchase 975,000 Common Shares; Mr.
Price will receive an option to purchase 300,000 Common Shares; and Messrs.
Robbie, Lombardozzi and Schmidt will each receive an option to purchase 150,000
Common Shares. In addition, other employees of the Company will receive options
to purchase in the aggregate approximately 1,400,000 Common Shares, and each of
the nonemployee directors of the Company other than Mr. Newman will receive
options to purchase 25,000 Common Shares, in each case effective upon completion
of the Public Offering. All of these options will have an exercise price per
Common Share equal to the initial Public Offering price per Common Share and a
term of ten years, and will provide for the grant of reload options in
accordance with the terms of the 2002 Share Incentive Plan.

PLATINUM CAPITAL ACCUMULATION PLAN

Platinum has adopted the Capital Accumulation Plan (the "CAP Plan"),
which will become effective upon completion of the Public Offering. The CAP Plan
provides for the payment of a portion of a participant's annual bonus
compensation in the form of restricted shares or in share options. The material
features of the CAP Plan are summarized below.

Purpose. The purpose of the CAP Plan is to advance the interests of
Platinum Holdings and its shareholders by attracting, retaining and motivating
key personnel upon whose judgment, initiative and effort the successful conduct
of Platinum Holdings' operations is largely dependent. The CAP Plan is also
intended to further align the interests of officers, employees and consultants
with those of the shareholders by promoting the ownership of Common Shares by
these individuals.

Available Shares. No Common Shares are separately authorized for
issuance under the CAP Plan. All Common Shares subject to awards under the CAP
Plan shall be taken from the Common Shares reserved under the 2002 Share
Incentive Plan, as adjusted under the terms thereof.

Administration. The CAP Plan will be administered by the Compensation
Committee of the Board of Directors of Platinum Holdings. The Compensation
Committee shall, to the extent deemed necessary or advisable by the Board, be
constituted so as to comply with the "non-employee director" requirements of
Rule 16b-3 under the Exchange Act and the "outside director" requirements of
Section 162(m) of the Code. Subject to the limitations set forth in the CAP
Plan, the

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Compensation Committee has the authority to determine which employees are
eligible to participate in the CAP Plan, the number of restricted shares or
share options to be awarded, the vesting schedule of the share awards and the
other terms and conditions of participation. The Compensation Committee will
have the right, from time to time, to delegate to one or more officers of
Platinum Holdings the authority of the Committee to grant and determine the
terms and conditions of awards, subject to certain limitations.

Eligibility. Awards under the CAP Plan may generally be granted to any
officer or other employee or consultant of Platinum Holdings or its subsidiaries
who is entitled to bonus or incentive awards and is designated by the
Compensation Committee to participate based on such criteria as the Committee
deems appropriate. Upon designation by the Compensation Committee, participation
in the CAP Plan is generally mandatory, although the Committee may in certain
circumstances make participation elective.

Restricted Shares. A portion of each participant's annual bonus
compensation, determined in the discretion of the Compensation Committee, will
be paid in the form of restricted shares. The price of the restricted shares for
purposes of determining the number of shares to be issued may be discounted from
fair market value (as defined in the CAP Plan) at the discretion of the
Compensation Committee (to a maximum of 25%) in order to reflect the impact of
the restricted nature and potential forfeiture of the shares. The participant is
not able to sell, pledge or otherwise dispose of the restricted shares, except
by will or the laws of descent and distribution, for a period of two years, or
such other period, and subject to such conditions, as may be determined by the
Compensation Committee. In the event that the participant has been continuously
employed by Platinum Holdings or its subsidiaries upon expiration of the
restricted period, the participant shall obtain full dispositive power over his
or her shares. The Compensation Committee may provide, in its discretion, that
the restrictions on the restricted shares immediately lapse upon certain events
such as a change in control of the Company or the death, disability or
retirement of a participant.

Share Options. The Compensation Committee may in its discretion permit
a participant to elect to receive up to one-third of his or her award in the
form of a grant of non-qualified options. The Compensation Committee will
determine the number of options to be awarded in lieu of each share of
restricted shares. The exercise price of an option will be equal to the fair
market value of a Common Share on the date of the grant of the option. The
Compensation Committee will determine the vesting requirements and the term of
exercise of each option, including the effect of termination of employment or
service of a participant, provided, that unless the Committee provides
otherwise, the option will become vested and exercisable on the second
anniversary of the date of grant if the participant has been continuously
employed by Platinum Holdings or its subsidiaries. The term of a share option
will be ten years from the date of grant unless otherwise provided by the
Compensation Committee. To exercise an option, the participant must pay the
exercise price, subject to specified conditions in cash or in Common Shares that
have been held for at least six months, through a broker-assisted "cashless
exercise," or by combination of any of the above methods approved by the
Committee and must pay any required tax withholding amounts.

Change In Control. The Compensation Committee may, in an award
agreement, provide for the effect of a change in control on an award of
restricted shares or share options. These provisions may include the lapse of
restrictions or the acceleration of vesting of an award, the elimination or
modification of any conditions, the extension of the time for exercise,
provision for cash settlement of an award or other adjustments that the
Compensation Committee considers appropriate.

Term, Amendment and Termination. The term of the CAP Plan is ten years.
The Board may amend the CAP Plan at any time, subject to shareholder approval
under certain circumstances provided in the CAP Plan or terminate the CAP Plan
at any time, in each case, except as would adversely affect outstanding awards
without participant consent.

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ST. PAUL INVESTMENT, RENAISSANCERE INVESTMENT AND PRINCIPAL SHAREHOLDERS

We expect to enter into a Formation and Separation Agreement relating
to, among other things, the St. Paul Investment, which is the issuance of an
aggregate of 6,000,000 Common Shares, or 15.0% of the outstanding Common Shares,
as well as the St. Paul Option described below, to St. Paul in return for the
Cash Contribution and St. Paul's contribution of the Transferred Business,
having a net tangible book value at June 30, 2002 of $11 million (after
reflecting a dividend of $15 million to be paid, prior to the completion of the
Public Offering, to United States Fidelity and Guaranty Company, the current
parent of Platinum US), and its agreement to enter into various agreements with
us. St. Paul's Cash Contribution, together with the net tangible book value of
Platinum US at June 30, 2002 (consisting of approximately $5 million of cash and
cash equivalents after reflecting the pre-closing dividend referred to above) to
be contributed as part of the Transferred Business, will represent an amount
approximately equal to the initial public offering price less the underwriters'
discount for the Common Shares privately placed to it. St. Paul will also
contribute to Platinum certain tangible assets and other intangible assets with
a net book value of approximately $7 million as of June 30, 2002. If the
underwriters exercise their option to purchase up to an additional 4,506,000
Common Shares in the Public Offering in whole or in part, St. Paul has the
option to purchase, at a price per share equal to the initial public offering
price less the underwriting discount, additional Common Shares in order for it
to retain the 15.0% interest, or up to 900,000 additional Common Shares if the
underwriters' option is exercised in full.

As part of the consideration for the Cash Contribution and St. Paul's
contribution of the Transferred Business, we will grant St. Paul the St. Paul
Option, which is a ten-year option, exercisable in whole or in part, to
purchase, at 120% of the initial public offering price, up to 6,000,000 Common
Shares.

The principal terms of the St. Paul Option are described under "Certain
Relationships and Related Transactions--Agreements with St. Paul--Option
Agreement".

The following table shows St. Paul's ownership following the Public
Offering and St. Paul Investment, reflecting no exercise and full exercise of
the underwriters' option to purchase additional Common Shares:

[Download Table]

MAXIMUM OWNERSHIP OF
SHARES ISSUED TO SHARES ST. PAUL COMMON SHARES BY
ST. PAUL MAY PURCHASE IF ST. PAUL FOLLOWING THE
WITH NO OVER-ALLOTMENT UNDERWRITERS' OVER-ALLOTMENT PUBLIC OFFERING AND
OPTION EXERCISED OPTION EXERCISED IN FULL ST. PAUL INVESTMENT
----------------------- ---------------------------- ----------------------

6,000,000 900,000 6,900,000

In addition, we have entered into an Investment Agreement with
RenaissanceRe and St. Paul relating to, among other things, the RenaissanceRe
Investment, which is the issuance to RenaissanceRe of an aggregate of 3,960,000
Common Shares, or 9.9% of the outstanding Common Shares, at a price per share
equal to the initial public offering price less the underwriting discount, as
well as the RenaissanceRe Option described below. If the underwriters and St.
Paul exercise their options to purchase up to an additional, in aggregate,
5,406,000 Common Shares in connection with the Public Offering in whole or in
part, RenaissanceRe has the option to purchase, at a price per share equal to
the initial public offering price less the underwriting discount, additional
Common Shares in order for it to retain the 9.9% interest, or up to 594,000
additional Common Shares if the underwriters' and St. Paul's options are
exercised in full.

As part of the consideration for the RenaissanceRe Investment, we will
grant RenaissanceRe the RenaissanceRe Option, which is a ten-year option,
exercisable in whole or in part, to purchase, at 120% of the initial public
offering price, up to 2,500,000 Common Shares.

The principal terms of the RenaissanceRe Option are described under
"Certain Relationships and Related Transactions--The RenaissanceRe
Investment--RenaissanceRe Option Agreement".

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The following table shows RenaissanceRe's ownership following the
Public Offering and the RenaissanceRe Investment, reflecting no exercise and
full exercise of the underwriters' option to purchase additional Common Shares:

[Enlarge/Download Table]

SHARES RENAISSANCERE
MAY PURCHASE IF MAXIMUM OWNERSHIP OF
UNDERWRITERS' AND COMMON SHARES BY RENAISSANCERE
SHARES ISSUED TO RENAISSANCERE ST. PAUL'S FOLLOWING THE PUBLIC OFFERING,
WITH NO OVER-ALLOTMENT OPTION OVER-ALLOTMENT OPTION THE ST. PAUL INVESTMENT AND
EXERCISED EXERCISED IN FULL RENAISSANCERE INVESTMENT
------------------------------ --------------------- ------------------------------

3,960,000 594,000 4,554,000

St. Paul's address is 385 Washington Street, St. Paul, Minnesota 55102.
RenaissanceRe's address is Renaissance House, 8-12 Broadway, Pembroke HM 19,
Bermuda. The Company is not aware of any potential 5% beneficial owner of Common
Shares other than St. Paul or RenaissanceRe.

The completion of the St. Paul Investment under the Formation and
Separation Agreement and the RenaissanceRe Investment under the Investment
Agreement are conditioned upon completion of the Public Offering. The closing of
the St. Paul Investment and the RenaissanceRe Investment will occur
simultaneously with the completion of the Public Offering. The completion of the
Public Offering and the completion of the ESU Offering are conditioned on each
other.

St. Paul and RenaissanceRe have been granted rights to require the
Company to register all of the Common Shares they acquire pursuant to the St.
Paul Investment, the St. Paul Option, the RenaissanceRe Investment, the
RenaissanceRe Option or otherwise as provided under the Formation and Separation
Agreement and the Investment Agreement, respectively. See "Shares Eligible For
Future Sale" and "Certain Relationships and Related Transactions".

Messrs. Newman, Fadden and Carmichael have indicated an interest in
purchasing Common Shares in the Public Offering as follows:

[Download Table]

Mr. Newman................................ 80,000 Common Shares

Mr. Fadden................................ 10,000 Common Shares

Mr. Carmichael............................ 2,500 Common Shares

Four other executive officers of Platinum Holdings have also indicated
an interest in purchasing Common Shares in the Public Offering in amounts not
exceeding 5,000 Common Shares each. We have directed the underwriters to make
these shares available to these persons. All of these Common Shares will be
subject to the 180-day restriction described under "Underwriting". In addition,
our directors and executive officers have been granted stock options exercisable
at the initial public offering price effective upon completion of the Public
Offering. The following table sets

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forth the number of Common Shares subject to the options granted to our
directors and executive officers.

[Enlarge/Download Table]

NUMBER OF COMMON SHARES SUBJECT TO
STOCK OPTIONS EXPECTED TO BE GRANTED PERCENT OF
NAME OF BENEFICIAL OWNER UPON COMPLETION OF THE PUBLIC OFFERING CLASS(1)
------------------------ -------------------------------------- ----------

Steven H. Newman ............................. 975,000 2.4%
Jerome T. Fadden ............................. 975,000 2.4%
Michael D. Price ............................. 300,000 *
Neal J. Schmidt .............................. 150,000 *
William A. Robbie ............................ 150,000 *
Michael E. Lombardozzi ....................... 150,000 *
H. Furlong Baldwin ........................... 25,000 *
Dan R. Carmichael ............................ 25,000 *
Jonathan F. Bank ............................. 25,000 *
Jay S. Fishman ............................... 25,000 *
Peter T. Pruitt .............................. 25,000 *
Directors and executive officers as a group .. 2,825,000 7.1%

----------------------------
(1) Assuming that 40,000,000 Common Shares are outstanding upon
completion of the Public Offering, which excludes (i) Common Shares
which may be issued pursuant to the underwriters' option to
purchase additional Common Shares, and additional Common Shares
which may be purchased by St. Paul and RenaissanceRe if the
underwriters exercise their option, (ii) Common Shares which may be
issued pursuant to the St. Paul Option, (iii) Common Shares which
may be issued pursuant to the RenaissanceRe Option, (iv) Common
Shares which may be issued pursuant to the Platinum 2002 Share
Incentive Plan, (v) Common Shares which may be issued pursuant to
the purchase contracts that are part of the equity security units
issued in the ESU Offering and (vi) Common Shares that may be
issued upon exercise by St. Paul or RenaissanceRe of their
pre-emptive rights in connection with the settlement of the
purchase contracts that are part of the equity security units.

* Less than 1%.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following summarizes the material terms of the agreements among St.
Paul, RenaissanceRe and Platinum listed below. This summary is subject to, and
is qualified in its entirety by reference to, all of the provisions of the
relevant agreements. A copy of each agreement is filed as an exhibit to the
registration statement of which this prospectus is a part.

THE ST. PAUL INVESTMENT

Prior to completion of the Public Offering and the ESU Offering, we and
St. Paul and certain of St. Paul's subsidiaries will enter into a number of
agreements with respect to our formation and operations. The terms of these
agreements have been negotiated by Platinum and St. Paul but do not necessarily
reflect terms that Platinum or St. Paul would agree to with an independent third
party.

FORMATION AND SEPARATION AGREEMENT

GENERAL. Prior to the completion of the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment, we will
enter into the Formation and Separation Agreement with St. Paul which will set
forth the terms of our establishment and organization, certain actions that will
be required to be taken prior to the completion of the Public Offering, the ESU
Offering and the St. Paul Investment, termination of certain relationships with
St. Paul and certain continuing relationships with St. Paul following the
completion of the Public Offering, the St. Paul Investment and the ESU Offering.
Under the Formation and Separation Agreement, we will, among other things,
reimburse St. Paul for certain specified expenses incurred in connection with
our formation, the registration of the Common Shares and the St. Paul
Investment. The Formation and Separation Agreement also provides for St. Paul to
reimburse us up to $4.5 million for certain transitional expenses. The Formation
and Separation Agreement will provide for St. Paul to contribute to us and our
affiliates the Transferred Business, which consists of certain tangible and
intangible assets required for the operation of our business, including renewal
rights in respect of reinsurance contracts underwritten by St. Paul, systems,
records, assignments of leases and furniture and fixtures, as well as all of the
outstanding capital stock of Platinum US. It will also provide for St. Paul to
make the Cash Contribution and for St. Paul and us to enter into various
agreements, including the Quota Share Retrocession Agreements by which we will
reinsure the Assumed Reinsurance Contracts. Pursuant to the St. Paul Investment,
as consideration for St. Paul's Cash Contribution and the contribution of the
Transferred Business, having a net tangible book value at June 30, 2002 of $11
million (after reflecting a dividend of $15 million to be paid, prior to the
completion of the Public Offering, to United States Fidelity and Guaranty
Company, the current parent of Platinum US), and its agreement to enter into
various agreements with us, we will issue to St. Paul 6,000,000 Common Shares,
or 15.0% of the Common Shares to be outstanding following the Public Offering,
and we will grant St. Paul the St. Paul Option. See "--Option Agreement". St.
Paul's Cash Contribution, together with the net tangible book value of Platinum
US at June 30, 2002 (consisting of approximately $5 million of cash and cash
equivalents after reflecting the pre-closing dividend referred to above), to be
contributed as part of the Transferred Business, will represent an amount
approximately equal to the initial public offering price less the underwriters'
discount for the Common Shares privately placed to it. St. Paul will also
contribute to Platinum certain tangible assets and other intangible assets with
a net book value of approximately $7 million as of June 30, 2002. If the
underwriters exercise their option to purchase additional Common Shares, St.
Paul has the option to purchase, at a price per share equal to the initial
public offering price less the underwriting discount, up to the number of
additional Common Shares as are necessary for it to retain its 15.0% interest.
The number of Common Shares to be issued to St. Paul (including the number of
Common Shares issuable pursuant to the St. Paul Option) for the Cash
Contribution and the contribution of the Transferred Business was determined by
St. Paul and

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Platinum Holdings, based on the nature of the business transferred, including
the contractual arrangements between the parties, and the expected valuation of
Platinum Holdings in the Public Offering.

GENERAL CROSS INDEMNIFICATION. The Formation and Separation Agreement
provides that, except as otherwise set forth in any provision of the Formation
and Separation Agreement or any other agreement between St. Paul and us provided
for therein:

- St. Paul generally shall indemnify Platinum Holdings, Platinum
Ireland, Platinum US, Platinum UK and Platinum Bermuda and their
respective officers, directors, employees, representatives and
agents (the "Platinum Indemnitees") from and against any and all
losses, liabilities, claims, damages, obligations, payments, costs
and expenses ("Liabilities") of any such Platinum Indemnitee that
arise out of any act, omission, event or condition occurring or
arising prior to the completion of the Public Offering relating to
(1) (A) the ownership, operation or use of the reinsurance business
of St. Paul Re or the assets transferred to us by St. Paul or any of
its subsidiaries, and (B) Platinum US; (2) any breach by St. Paul,
any of its subsidiaries, or any person acting on behalf of St. Paul
or any such subsidiary of any representation, warranty, covenant or
undertaking contained in the Formation and Separation Agreement or
any other agreement between St. Paul and us provided for thereby;
and (3) any and all taxes (the "Pre-closing Taxes") (A) imposed on
St. Paul and its "affiliated group" as defined in Section 1504(a) of
the Code for any taxable year, (B) relating to Platinum US or for
which Platinum US could be liable for taxable periods or portions
thereof ending on or before the date of completion of the Public
Offering, or (C) directly relating to the assets transferred with
the Transferred Business for any taxable periods ending on or before
the date of the completion of the Public Offering, subject to
certain exceptions. St. Paul will not be obligated to so indemnify
any Platinum Indemnitee for any Liabilities arising out of any act
or omission occurring or arising prior to the completion of the
Public Offering of any of Steven H. Newman, Jerome T. Fadden,
William A. Robbie, Michael E. Lombardozzi or Michael D. Price taken
in furtherance of the organization of Platinum Holdings or its
subsidiaries, the Public Offering, the registration statement of
which this prospectus is a part, the agreements between St. Paul and
us provided for in the Formation and Separation Agreement, or the
transactions related thereto but otherwise do include Liabilities
arising out of any act or omission occurring or arising prior to the
completion of the Public Offering of any of such individuals in
their capacities as officers of St. Paul Re.

- Platinum Holdings shall indemnify St. Paul, its subsidiaries and
their respective officers, directors, employees, representatives and
agents (the "St. Paul Indemnitees") from and against any and all
Liabilities of any such St. Paul Indemnitee that arise out of any
act, omission, event or condition occurring or arising at or after
the completion of the Public Offering relating to (1) the ownership,
operation or use of the business of Platinum or the related assets
by Platinum on or after the completion of the Public Offering; (2)
any breach by Platinum Holdings, any of its subsidiaries or any
person acting on behalf of Platinum Holdings or any such subsidiary
of any representation, warranty, covenant or undertaking contained
in any agreement between St. Paul and us provided for in the
Formation and Separation Agreement; and (3) any and all taxes that
are not Pre-closing Taxes. Platinum's Liabilities include all
Liabilities relating to the employment agreements with Jerome T.
Fadden, Steven H. Newman, William A. Robbie, Michael E. Lombardozzi
and Michael D. Price irrespective of whether occurring or arising
prior to, on or after the completion of the Public Offering and all
Liabilities relating to the obligations of St. Paul and its
subsidiaries to write or renew certain reinsurance agreements
incepting on or after January 1, 2002.

This general indemnification under the Formation and Separation Agreement does
not cover any Liabilities relating to the Public Offering under the federal or
any state securities laws.

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SECURITIES INDEMNIFICATION BY PLATINUM HOLDINGS. The Formation and
Separation Agreement provides that Platinum Holdings shall indemnify (including
reimbursement for expenses) to the full extent permitted by law, St. Paul, its
subsidiaries and their respective officers, directors, employees and agents, and
each person who controls any of them and the officers, directors, employees and
agents of each such controlling person (each, a "St. Paul Registration
Indemnitee"), from and against any and all Liabilities arising out of or based
upon any untrue statement or alleged untrue statement of a material fact in the
"Platinum Information", being the information (other than the St. Paul
Information and Shared Information (each as defined below)) contained in the
registration statement relating to the Public Offering, the registration
statement relating to the ESU Offering or the private offering memorandum
relating to the RenaissanceRe Investment, or arising out of or based upon any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements in the Platinum Information not misleading.

SECURITIES INDEMNIFICATION BY ST. PAUL. The Formation and Separation
Agreement provides that St. Paul shall indemnify (including reimbursement for
expenses), to the full extent permitted by law, Platinum Holdings, its
subsidiaries and their respective officers, directors, employees and agents and
each person who controls any of them and the officers, directors, employees, and
agents of each such controlling person (each, a "Platinum Registration
Indemnitee") from and against any and all Liabilities (including "Damages", if
any, owed by us to RenaissanceRe pursuant to Section 10.13 of the Investment
Agreement (the "RenaissanceRe Liabilities")) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact in the "St. Paul
Information" contained in the registration statement relating to the Public
Offering, the registration statement relating to the ESU Offering, and the
private offering memorandum relating to the RenaissanceRe Investment, or arising
out of or based upon any omission or alleged omission to state a material fact
required to be stated or necessary to make the statements in the St. Paul
Information not misleading. St. Paul Information is generally the information in
this prospectus and the prospectus relating to the ESU Offering set forth under
the captions "The Predecessor Business" and in the financial statements of "The
St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor)".

INDEMNIFICATION FOR SHARED INFORMATION. Notwithstanding the
indemnification provisions in the two preceding paragraphs, St. Paul and
Platinum shall indemnify (including reimbursement for expenses), to the full
extent permitted by law, each Platinum Registration Indemnitee and each St. Paul
Registration Indemnitee, respectively, for 50% of any and all Liabilities
(including RenaissanceRe Liabilities, if any,) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact in the Shared
Information contained in the registration statement relating to the Public
Offering, the registration statement relating to the ESU Offering or the private
offering memorandum relating to the RenaissanceRe Investment or arising out of
or based upon any omission or alleged omission to state a material fact required
to be stated or necessary to make the statements in the Shared Information not
misleading. "Shared Information" means any numerical, financial, narrative or
other information contained in the Platinum Information that is based on or
related to any pro forma financial information or disclosure with respect to the
Transferred Business described in the registration statement.

SECURITIES CONTRIBUTIONS. If for any reason the foregoing securities
indemnifications are unavailable to, or are insufficient to hold harmless, any
registration indemnitee, the indemnifying party shall contribute to the amount
paid or payable by such registration indemnitee in a proportion to reflect the
parties' relative benefits and relative faults. For the avoidance of doubt, St.
Paul may not require any contribution from Platinum for any Liabilities arising
out of or based upon any St. Paul Information, and Platinum may not require any
contribution from St. Paul for any Liabilities arising out of or based upon any
Platinum Information. Furthermore, any contribution with respect

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to any Liabilities arising out of or related to any Shared Information are
limited to 50% of the amount of such Liabilities.

LIMITATIONS ON SECURITIES INDEMNIFICATION BY ST. PAUL. St. Paul's
aggregate liability to the Platinum Registration Indemnitees, including with
respect to RenaissanceRe Liabilities, is limited to a duration of two years
following the completion of the Public Offering and the ESU Offering and covers
only the excess of (1) $400 million over (2) any amounts directly paid or
payable by St. Paul (x) to investors in the Public Offering and the ESU Offering
in respect of claims against St. Paul arising under the registration statement
relating to the Public Offering and the registration statement relating to the
ESU Offering, (y) to RenaissanceRe in connection with the RenaissanceRe
Investment, and/or (z) the underwriters of the Public Offering and the ESU
Offering pursuant to an obligation of St. Paul under the underwriting agreements
for the Public Offering and the ESU Offering to pay certain indemnification,
contribution and expense reimbursement obligations of Platinum to the
underwriters if Platinum fails to pay in defined circumstances. The limitation
to $400 million in clause (1) of the preceding sentence applies to the Public
Offering, the ESU Offering and the RenaissanceRe Investment taken together and
not individually. In the event Platinum Holdings is obligated to indemnify
RenaissanceRe with respect to RenaissanceRe Liabilities arising out of St. Paul
Information or Shared Information, Platinum Holdings and St. Paul agree that (i)
the payment by St. Paul to Platinum Holdings of any amounts with respect to
indemnification of such RenaissanceRe Liabilities shall be segregated from other
indemnification payments (if any) made by St. Paul to Platinum Holdings so that
they may be available to RenaissanceRe (such segregated amounts not to exceed
$40 million), and (ii) no payments shall be made by St. Paul to any Platinum
Registration Indemnitees or others that in the aggregate exceed $360 million
prior to the satisfaction by St. Paul of any obligation to indemnify Platinum in
order to satisfy indemnification of any RenaissanceRe Liabilities prior to the
termination of St. Paul's obligations to Platinum Registration Indemnitees. For
a discussion of Platinum's obligations to indemnify RenaissanceRe, see "--The
RenaissanceRe Investment--Investment Agreement--Indemnification and Waiver".

If Platinum Registration Indemnitees make a claim for the
indemnification, contribution or reimbursement of expenses against St. Paul
(including with respect to RenaissanceRe Liabilities), St. Paul's obligation to
indemnify, contribute to, or reimburse the Platinum Registration Indemnitees
(including with respect to RenaissanceRe Liabilities) with respect to such claim
is conditioned on, and only payable upon, the concurrent settlement or
resolution of all claims then outstanding at the time of such settlement or
resolution against St. Paul (other than claims by the underwriters of the Public
Offering and the ESU Offering) which are then subject to the limitation on
liability set forth in the immediately preceding paragraph provided St. Paul
continues in good faith to seek and assist in the resolution or settlement of
all such claims.

NON-COMPETITION. The Formation and Separation Agreement generally
provides that, for a period of two years after the completion of the Public
Offering, neither St. Paul nor any of its subsidiaries or any of their
respective directors, officers or agents may

(1) offer, issue, sell, refer or promote, directly or indirectly, any
contracts of reinsurance of the same type as the Assumed
Reinsurance Contracts and for which St. Paul has granted to
Platinum the rights to seek renewal, provided that Platinum
continues to provide, during the two-year non-competition period,
reinsurance coverage of such types to third parties;

(2) employ, offer to employ or solicit with a view to employment
specified key employees or employees in specified positions of
Platinum; or

(3) use or disclose to any person other than Platinum Holdings or any
of its subsidiaries any information relating to the Transferred
Business of a confidential nature except in connection with the
administration of (1) the Assumed Reinsurance Contracts and the
run-off business of St. Paul or (2) any liabilities retained by
St. Paul. St. Paul, its subsidiaries

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and their respective directors, officers and agents may disclose
such confidential information relating to the Transferred
Business only in the ordinary course of business, consistent with
past practice and shall use reasonable efforts to avoid providing
such confidential information relating to the Transferred
Business to a competitor of Platinum under circumstances
reasonably likely to materially impair the value of Platinum's
right to seek such renewals of any reinsurance agreements
underwritten by St. Paul Re and in effect as of the date of
completion of the Public Offering.

In addition, for two years after the completion of the Public Offering,
neither St. Paul nor any of its subsidiaries may sponsor or assist, directly or
indirectly, in the sponsorship of a newly formed property or casualty reinsurer
for so long as St. Paul continues to own 10% or more of the outstanding Common
Shares.

The non-competition agreements in clauses (1) and (2) above are not
binding upon a subsidiary of St. Paul after the time such person ceases to be a
subsidiary. With certain exceptions, the non-competition agreement in clause (1)
above does not apply to any affiliate of St. Paul that is not a subsidiary of
St. Paul, including any person which acquires all or substantially all of the
capital stock or assets of St. Paul through merger, consolidation, tender offer,
acquisition of assets or otherwise, but the non-competition agreements in
clauses (2) and (3) shall apply to such affiliates of St. Paul.

Notwithstanding the foregoing, neither St. Paul nor any of its
subsidiaries is prohibited from

(1) engaging in any line of business in which it is engaged
immediately after the completion of the Public Offering and for
which St. Paul has not transferred to Platinum the right and any
obligations to seek renewals, including, without limitation, the
run-off business (but not including any renewals thereof) of St.
Paul, purchasing reinsurance for its own account, the reinsurance
business written through Discover Re and Lloyd's of London
operations and property catastrophe facultative business written
by St. Paul's CATrisk Property division;

(2) acquiring any person or any interest in any person engaged in any
line of business except for an acquisition of an interest of more
than 49% of a person that generated 50% or more of its gross
revenues, excluding investment income and realized investment
gains and losses, in the most recent fiscal year for which
financial statements are available, by writing property or
casualty reinsurance (a "Permitted Acquiree"), provided that such
an acquired person is not allowed to use the name "St. Paul",
"USF&G" or "F&G" or any derivative thereof or any logo or mark
identified with such names in connection with its reinsurance
business, provided further, however, that St. Paul and any of its
subsidiaries may acquire an interest of more than 49% of a person
that is not a Permitted Acquiree if St. Paul or such subsidiary
promptly divests the property or casualty reinsurance operations
of such person; or

(3) soliciting, offering, issuing, selling, purchasing or referring
any contracts of reinsurance of any type (A) with any of St.
Paul's affiliates, (B) in connection with St. Paul's run-off
business (other than renewals thereof) or (C) in connection with
finite business covered by any of the Quota Share Retrocession
Agreements or which Platinum and its subsidiaries declines to
reinsure.

TRANSFER RESTRICTIONS. The Formation and Separation Agreement provides
that, except in connection with any tender or exchange offer made to all holders
of Common Shares and certain other situations, St. Paul may not transfer more
than 9.9% of the Common Shares outstanding at the time of such transfer to any
person that generated 50% or more of its gross revenues in the most recent
fiscal year for which financial statements are available by writing property or
casualty insurance or reinsurance.

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STANDSTILL PROVISIONS. The Formation and Separation Agreement provides
that St. Paul and its subsidiaries will not, and St. Paul will use its
commercially reasonable efforts to cause its affiliates and any officer,
employee, agent or representative of St. Paul or such affiliates (collectively,
the "Representatives") to not, directly or indirectly advise or, encourage any
party or entity with respect to the voting of any of our voting securities in an
attempt to cause a change in control of Platinum Holdings, initiate or otherwise
solicit our shareholders for the granting of any proxy or the approval of one or
more shareholder proposals or induce any other party or entity to seek any proxy
or to initiate any shareholder proposal that results or is designed to result in
a change in control of Platinum Holdings, or directly or indirectly acquire,
announce an intention to acquire, or agree to acquire, by purchase or otherwise,
beneficial ownership of any voting securities of Platinum Holdings, if,
immediately after any such acquisition, St. Paul or any subsidiary of St. Paul
would beneficially own, in the aggregate, more than 24.9% of the voting
securities of Platinum Holdings then outstanding, provided that there are no
limitations on St. Paul's ability to communicate with RenaissanceRe or any of
its affiliates in respect of any matter.

A change in control of Platinum Holdings is deemed to have occurred if
(i) any person or group (as defined for purposes of Section 13 of the Exchange
Act) (excluding Platinum Holdings or any wholly owned subsidiary thereof)
becomes the beneficial owner of more than 50% of the outstanding equity
securities of Platinum Holdings representing the right to vote for the election
of directors or (ii) there shall occur a merger, consolidation or other business
combination in which Platinum Holdings is acquired (unless the shareholders of
Platinum Holdings immediately before such business combination own, directly or
indirectly, immediately following such business combination, at least a majority
of the combined voting power of the entity resulting from such business
combination).

PRE-EMPTIVE RIGHTS. The Formation and Separation Agreement provides
that if Platinum Holdings proposes to issue (a "Dilutive Transaction") any
Common Shares or any securities convertible into, exchangeable for or carrying
in any way the right to acquire Common Shares ("New Securities"), St. Paul will
have the right to subscribe for up to such number of new securities of Platinum
Holdings as is necessary to maintain St. Paul's beneficial ownership interest in
Platinum Holdings at the same percentage owned immediately prior to the Dilutive
Transaction. The precise number of New Securities to be issued to St. Paul will
be rounded up to the nearest round lot number. The issuance of Common Shares
upon the settlement of the purchase contracts forming part of the equity
security units issued in the ESU Offering is deemed to be a Dilutive
Transaction. St. Paul has the right to register any Common Shares acquired by it
pursuant to such pre-emptive rights in accordance with the provisions of the
Registration Rights Agreement described under "--Registration Rights Agreement
with St. Paul".

St. Paul will have no preemptive rights with respect to any new
securities issued pursuant to any director or employee benefit plans of Platinum
Holdings or any acquisition transaction engaged in by Platinum Holdings. St.
Paul's pre-emptive rights to subscribe for new securities will terminate at the
time St. Paul beneficially owns less than 10% of Platinum Holdings' outstanding
Common Shares. Furthermore, St. Paul will have no pre-emptive rights with
respect to any proposed Dilutive Transaction if (1) in an underwritten public
offering, the underwriters request a reduction of the number of new securities
to be issued; (2) a nationally recognized investment bank mutually agreed by
Platinum Holdings and St. Paul advises St. Paul and Platinum Holdings in writing
to the effect that exercising St. Paul's pre-emptive rights would materially
hinder or interfere with the proposed Dilutive Transaction. In addition, St.
Paul will have no pre-emptive rights in the event of an issuance of Common
Shares upon the conversion or exchange of New Securities with respect to the
issuance of which St. Paul had pre-emptive rights. In addition, St. Paul will
have no preemptive rights to subscribe for New Securities if the ownership
thereof would cause St. Paul to be a "United States 25% Shareholder". See
"Description of our Common Shares--Restrictions on Transfer".

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SHARE BUY-BACK PROGRAMS. The Formation and Separation Agreement
provides that if Platinum Holdings repurchases its Common Shares (and if
applicable, new securities as specified above under "--Pre-Emptive Rights") in
accordance with a repurchase program approved by Platinum Holdings' board of
directors, then St. Paul must sell to Platinum Holdings, on each day on which
any Common Shares are so repurchased at a price equal to the average price of
repurchases by Platinum Holdings on such day, that number of Common Shares which
is necessary to limit St. Paul's beneficial ownership interest in Platinum
Holdings to no more than 24.9% of the outstanding Common Shares after all such
repurchases. St. Paul may require that any repurchases from it by Platinum
Holdings must be at the average purchase price of any repurchases effected by
Platinum Holdings on such day pursuant to Rule 10b-18 under the Exchange Act.

LIMIT ON RECOVERY FROM PLATINUM OFFICERS AND DIRECTORS. The Formation
and Separation Agreement provides that, in any legal action which may be
commenced by St. Paul against Platinum, its officers and/or its directors, St.
Paul shall not recover from Platinum's officers or directors in excess of the
amount Platinum is able to indemnify such officers or directors other than in
the circumstance where such indemnification is restricted due to such officers
and/or directors having engaged in fraud, intentional misconduct or criminal
acts. Platinum's officers and directors are third party beneficiaries of this
agreement by St. Paul.

QUOTA SHARE RETROCESSION AGREEMENTS

Subject to the completion of the Public Offering, the ESU Offering and
the St. Paul Investment, St. Paul and its subsidiaries will transfer the
liabilities, related assets and rights and risks under the Assumed Reinsurance
Contracts to our insurance company subsidiaries through several 100% Quota Share
Retrocession Agreements, except that St. Paul will retain the liabilities and
related premiums with respect to the August 2002 European floods, and the
losses, loss reserves, unearned premium reserves and other related reserves with
respect to the 2002 underwriting year for certain casualty reinsurance business
underwritten in London and relating primarily to British financial services
companies, which we refer to as the "2002 U.K. Bank Book". With respect to named
storms in existence at the time of the completion of the Public Offering which
cause insured damage within the ten days subsequent to such time, we will bear
losses of up to $25 million in the aggregate, net of recoveries, subject to
specified exceptions, from the retrocessional reinsurance purchased by St. Paul
that inures to our benefit. St. Paul will bear losses in respect of such storms
that are, in the aggregate and net of recoveries from such retrocessional
reinsurance, in excess of $25 million up to $50 million. We also will bear all
losses, in the aggregate and net of recoveries from such retrocessional
reinsurance, in excess of $50 million in respect of such storms. We have
purchased third party retrocessional coverage in an amount up to $100 million
for losses in excess of $50 million, in the aggregate, net of inuring
retrocessions, with respect to damage that occurs during the 15-day period
beginning at 12:01 a.m. on the later of the day of pricing of the Public
Offering or October 21, 2002, as a result of named storms in existence at that
time but not yet in existence as of October 10, 2002. We will pay $2.5 million
of the cost of this coverage, with St. Paul bearing the remainder of its cost.
All the Quota Share Retrocession Agreements will take effect as of 12:01 a.m. on
the day immediately following the date of the completion of the Public Offering.

The Quota Share Retrocession Agreements will provide for certain
insurance subsidiaries of St. Paul to transfer to us cash and other assets in an
amount equal to all of the existing loss reserves (excluding reserves relating
to liabilities retained by St. Paul), allocated loss adjustment expense
reserves, other reserves related to non-traditional reinsurance treaties,
unearned premium reserves (subject to agreed upon adjustments) and other related
reserves as of the date of the transfer (as determined 90 days after such date)
and 100% of future premiums (less any ceding commission under the Quota Share
Retrocession Agreements) associated with the Assumed Reinsurance Contracts
relating to periods after the date of the transfer, in each case exclusive of

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the August 2002 European floods, the 2002 U.K. Bank Book and the specified named
storms as described above. With respect to certain non-traditional contracts of
reinsurance, a portion of the future premium will be applied to settle balances
related to prior year experience for the benefit of St. Paul. Also with respect
to certain other non-traditional contracts of reinsurance, St. Paul will cede
losses in excess of profit balances related to prior year experience. We will
indemnify St. Paul for any unpaid losses, loss adjustment expenses and other
payment obligations incurred by St. Paul under the Assumed Reinsurance Contracts
on or after January 1, 2002 and prior to the time of the transfer. We will also
assume liability for 100% of all future loss, loss adjustment expense and other
payment obligations that arise under the Assumed Reinsurance Contracts on and
after the date of the transfer. St. Paul will retain all of its reinsurance
exposure not being transferred to us including any related punitive damages and
will administer the associated run-off. The Quota Share Retrocession Agreements
provide, with limited exceptions, that retrocessional reinsurance purchased by
St. Paul Re in respect of the Assumed Reinsurance Contracts shall inure to our
benefit and shall be at our expense.

Our insurance subsidiaries will maintain in trust assets to secure
their obligations to the St. Paul insurance subsidiaries that cede business to
us under the Quota Share Retrocession Agreements. We would be permitted to
terminate the trusts if the reserves transferred by the insurance subsidiaries
of St. Paul do not exceed specified amounts (for example, $100 million in the
case of Platinum US's Quota Share Retrocession Agreement with St. Paul Fire and
Marine Insurance Company) as of two successive calendar year ends.

Under the Quota Share Retrocession Agreements, St. Paul retains
recorded underwriting gain or loss with respect to the Assumed Reinsurance
Contracts for the period from January 1, 2002 up to the transfer date, which is
12:01 a.m. on the day immediately following the date of completion of the Public
Offering. In addition, St. Paul will retain all liabilities relating to the
flooding in Europe in August 2002 and all liabilities with respect to the 2002
U.K. Bank Book, as well as any liabilities in excess of $25 million up to $50
million, in the aggregate, relating to "named storms" in existence at the time
of the completion of the Public Offering which cause insured damage within ten
days of such time. Accordingly, St. Paul retains underwriting losses, if any,
with respect to catastrophes (other than those specified above) arising before
the transfer date to the extent reserves are established therefor as of such
date (as determined 90 days after such date). Platinum bears all underwriting
loss from catastrophes occurring on or after the transfer date (other than the
intermediate $25 million layer of coverage borne by St. Paul with respect to
specified named storms, on the terms described above), and any underwriting loss
or gain resulting from reestimation of catastrophe losses established by St.
Paul as of the transfer date (as determined 90 days after such date) (other than
with respect to the August 2002 European floods, the 2002 U.K. Bank Book and the
intermediate $25 million layer of coverage borne by St. Paul with respect to
specified named storms, on the terms described above). Under the Quota Share
Retrocession Agreements, premiums attributable to policy periods prior to the
transfer date and with respect to flooding in Europe in August 2002 are retained
by St. Paul, and premiums attributable to periods on or following the transfer
date are for Platinum's benefit. Consistent with St. Paul's accounting
practices, St. Paul and Platinum intend to allocate 2002 premiums attributable
to catastrophe coverage before and after the transfer date between themselves on
a pro rata basis over the applicable policy period, without adjustment for
seasonality that exists for certain catastrophe losses. Certain catastrophic
events, such as hurricane and windstorm exposure in North America, tend to occur
more frequently in the latter half of the calendar year. Accordingly, Platinum's
premium income attributable to certain catastrophe coverages and earned in the
period following the time of effectiveness of the Quota Share Retrocession
Agreements may not, due to seasonality among other factors, sufficiently match
Platinum's exposure to losses from certain catastrophic events which may occur
in the remaining part of 2002.

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UNDERWRITING MANAGEMENT AGREEMENTS

In the case of business written in the U.S., for the period of one year
following the completion of the Public Offering, we will have the right to
underwrite specified reinsurance business on behalf of St. Paul in cases where
we are unable to underwrite that business ourselves because, despite using our
reasonable best efforts, we have not obtained a necessary or desirable
regulatory license or approval to do so or we have not yet been approved as a
reinsurer by the cedent. We will reinsure such business pursuant to the Quota
Share Retrocession Agreements. In the case of business written in the U.K.,
until the earlier of the first anniversary of the completion of the Public
Offering and the date at which Platinum UK obtains a license we will have the
right to underwrite specified reinsurance business on behalf of St. Paul. This
will allow us to participate in reinsurance business which is bound after the
completion of the Public Offering without any delay occasioned by the start-up
of our operations, including the lack of required licenses, and facilitate the
transition of St. Paul Re's business to us.

For a period of three years following the completion of the Public
Offering, we will underwrite on behalf of St. Paul Re, subject to the consent of
St. Paul, renewals of in-force contracts of finite reinsurance. St. Paul Re will
retrocede to us 100% of the unpaid and future losses under currently in-force
contracts and we will have the option to reinsure losses under certain renewed
contracts and will be required to offer to reinsure losses under other contracts
for a fair market retrocession premium pursuant to the Quota Share Retrocession
Agreements. Under the Quota Share Retrocession Agreements, a portion of future
premiums will be applied to settle balances related to prior year experience for
the benefit of St. Paul. St. Paul will have an option to renew this arrangement
with us for a subsequent period of two years. In the U.K., this arrangement will
be limited to finite treaties which St. Paul Re has entered into with a small
number of identified cedents and any further finite treaties which may be
entered into on behalf of St. Paul Re UK prior to the first anniversary of the
completion of the Public Offering.

UK BUSINESS TRANSFER AGREEMENT

St. Paul Reinsurance Company Limited ("St. Paul Re UK") and Platinum UK
will enter into a UK Business Transfer Agreement under which Platinum UK will,
subject to the completion of the Public Offering, the ESU Offering and the St.
Paul Investment and as of the date of completion of the Public Offering, acquire
the reinsurance business of St. Paul Re UK, together with the associated
customer lists and goodwill (other than the assumption of liability for, or the
management of, existing reinsurance contracts entered into by St. Paul Re UK).
If, at the completion of the Public Offering, Platinum UK has not obtained a
license, Platinum UK will carry on this reinsurance business solely as agent of
St. Paul Re UK in accordance with specific provisions included in the
Underwriting Management Agreement between St. Paul Re UK and Platinum UK until
the earlier of the first anniversary of the completion of the Public Offering
and the date on which such authorization is obtained. During the term of this
agency, this reinsurance business will be the subject of 100% quota share
retrocession agreements to Platinum US. Once Platinum UK is authorized to carry
on insurance business in the United Kingdom in its own right, it will be
entitled to write reinsurance business for its own account and benefit in
succession to St. Paul Re UK. Platinum UK will not be in a position to write
reinsurance business for its own account and benefit in succession to St. Paul
Re UK, unless and until such authorization shall have been obtained.

The UK Business Transfer Agreement also provides for the transfer of
certain St. Paul Re UK employees from St. Paul Re UK to Platinum UK and provides
for the allocation of assets and liabilities and certain other agreements with
respect to employee compensation and benefit plans.

MASTER SERVICES AGREEMENTS

Effective as of the completion of the Public Offering, the ESU Offering
and the St. Paul Investment, we expect to enter into Master Services Agreements
with St. Paul and certain of its

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subsidiaries for the provision by them of certain services for a transitional
period of time. The principal services to be covered by these agreements include
accounting, payroll administration, human resources management and systems
support. The services will be provided as long as we deem necessary, but no
later than June 30, 2003, although the provision of particular services may be
extended on a case-by-case basis. The services are to be provided at their cost
to St. Paul.

RUN-OFF SERVICES AGREEMENTS

Effective as of the completion of the Public Offering, the ESU Offering
and the St. Paul Investment, we will enter into Run-off Services Agreements with
St. Paul and certain of its subsidiaries under which we will, for a period of up
to two years following completion of the Public Offering, provide St. Paul with
specified services in administering the run-off of the reinsurance contracts
entered into by St. Paul's insurance subsidiaries prior to January 1, 2002 and
not reinsured by us and of the Assumed Reinsurance Contracts. The services are
to be provided at their cost to us.

EMPLOYEE BENEFITS AND COMPENSATION MATTERS AGREEMENT

Effective upon the completion of the Public Offering, the ESU Offering
and the St. Paul Investment, Platinum US will enter into an Employee Benefits
and Compensation Matters Agreement with St. Paul that provides for the transfer
of our employees from St. Paul and provides for the allocation of assets and
liabilities and certain other agreements with respect to employee compensation
and benefit plans. Pursuant to the agreement, all eligible employees of Platinum
US will continue to participate, through December 31, 2002, in certain St. Paul
welfare and fringe benefit plans on the same basis as if they had remained St.
Paul employees, after which the employees will participate in employee benefit
plans established and maintained by Platinum US. Platinum US will be responsible
for the costs of providing this continuation coverage to eligible Platinum US
employees under the welfare and fringe benefit plans in accordance with the
terms of a letter agreement to be entered into between St. Paul and Platinum US.

Each Platinum US employee who participated in the St. Paul 401(k) plan,
the St. Paul Stock Ownership Plan or the St. Paul Executive Savings Plan prior
to the completion of the Public Offering will receive employer matching
contributions under each plan through the date of completion of the Public
Offering and all matching contributions, as well as performance share awards
under the St. Paul Stock Ownership Plan, will be fully vested as of the
completion of the Public Offering. Following the completion of the Public
Offering, the Platinum US defined contribution plan will accept the rollover of
eligible rollover distributions from the St. Paul 401(k) plan and the St. Paul
Stock Ownership Plan.

For purposes of the St. Paul stock option plans, transfer of an
employee's employment from St. Paul to Platinum US will be deemed to be a
termination of employment. All St. Paul stock options held by Platinum US
employees that are vested as of the completion of the Public Offering will be
exercisable in accordance with their terms and the relevant stock option plan.
All stock options held by Platinum US employees that are unvested as of the
completion of the Public Offering will terminate as of the completion of the
Public Offering; and each such Platinum US employee will be entitled to receive,
for each unvested stock option that otherwise would have vested during the
period from the date of completion of the Public Offering through the second
anniversary of such date, a cash payment from us (to be reimbursed to us by St.
Paul) on each date an option otherwise would have vested equal to the number of
shares subject to the employee's options that otherwise would have vested on
such vesting date, multiplied by the spread between the exercise price per share
and the closing price per share of the common stock of St. Paul on the date of
completion of the Public Offering, provided the employee is still employed by
Platinum US as of each such date. All unvested St. Paul restricted stock held by
Platinum US employees that otherwise would have vested during the period from
the date of completion of the

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Public Offering through the first anniversary of such date, will vest
immediately prior to the date of completion of the Public Offering. All other
St. Paul restricted stock that is unvested as of the date of completion of the
Public Offering will terminate as of such date and be of no further force and
effect.

Each Platinum US employee who is a participant in the St. Paul
tax-qualified defined benefit pension plan or is a participant in the St. Paul
retiree health plan as of the date of completion of the Public Offering and who
is (i) within two years of satisfying the minimum retirement eligibility
requirements of the pension plan (or the minimum requirement to receive retiree
health or life insurance benefits in the case of the retiree health plan) or
(ii) is at least 50 years old and has a minimum of 20 years of credited service
under the plan, will receive additional age and service credit under the
corresponding plan for service provided to Platinum US and its affiliates
following the date of completion of the Public Offering as if such service had
been with St. Paul in an amount equal to only the amount of additional age and
service credit each such employee needs to meet the minimum retirement
eligibility requirements under the pension plan (and the minimum requirement to
receive retiree health and life insurance benefits under the retiree health
plan). The Platinum US defined contribution plan will accept the rollover of
eligible rollover distributions from the St. Paul defined benefit pension plan,
including amounts credited for retiree medical under the cash balance portion of
the St. Paul defined benefit pension plan.

Each Platinum US employee who, as of the date of completion of the
Public Offering, is a participant in the portion of the St. Paul Benefit
Equalization Plan (the "BEP") that provides benefits that otherwise would have
been provided under the St. Paul defined benefit plan if not for limitations of
the Internal Revenue Code and who is (i) within two years of satisfying the
minimum retirement eligibility requirements of the BEP or (ii) is at least 50
years old and has a minimum of 20 years of credited service under the BEP will
receive additional age and service credit under the BEP for service provided to
Platinum US and its affiliates following the date of completion of the Public
Offering as if such service had been with St. Paul in an amount equal to only
the amount of additional age and service credit each such employee needs to meet
the minimum retirement eligibility requirements under the BEP.

In addition, St. Paul will reimburse Platinum US for the annual bonus
each of the eligible Platinum US employees would have been eligible to receive
based on actual St. Paul performance based on 100% of 2001 bonus targets and
prorated for the period from January 1, 2002 through the date of completion of
the Public Offering, provided that each such employee is employed by Platinum US
on the date that 2002 annual bonuses are paid. Platinum US will also adopt the
St. Paul's Enhanced Severance Program and will keep the program in effect for
St. Paul Re employees transferred to Platinum US for 90 days following the date
of completion and St. Paul will remain liable for the expense of each eligible
Platinum US employee who is terminated during the 90-day period based on such
employee's accrued service and salary through the date of completion of the
Public Offering. St. Paul has also agreed to continue in effect its Enhanced
Severance Program for 90 days following the Public Offering for all St. Paul Re
employees whose employment is not transferred to Platinum US. St. Paul also
agrees to honor certain retention obligations entered into with St. Paul Re
employees and to recognize for purposes of the retention obligations, service
provided to Platinum US following the date of completion of the Public Offering.
St. Paul shall be liable for the cost of certain other retention obligations for
St. Paul employees with respect to the period through the date of completion of
the Public Offering and Platinum US shall be liable for the cost of such
retention obligations with respect to the period after the date of completion of
the Public Offering.

St. Paul shall generally retain all liabilities with respect to any
employee benefit plan, program, policy or arrangement maintained by St. Paul for
the benefit of St. Paul Re employees (including St. Paul Re employees who become
employees of Platinum US), any other liabilities of any nature whatsoever
relating to such persons that relate to the periods on or prior to the
completion of the

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Public Offering or any other liabilities of any nature whatsoever relating to
St. Paul Re employees who do not become Platinum US employees that relate to any
period before or after such date.

TRANSITIONAL TRADEMARK LICENSE AGREEMENTS

Effective as of the completion of the Public Offering, the ESU Offering
and the St. Paul Investment, we will enter into several Transitional Trademark
License Agreements with St. Paul (or subsidiaries of St. Paul) under which we
will be granted a royalty-free, limited, non-sublicensable (except to our
operating subsidiaries), non-transferable, exclusive license to use certain St.
Paul trademarks and service marks in connection with our reinsurance business
for one year after completion of the Public Offering. Under these agreements,
St. Paul will retain exclusive ownership of these marks, and we will be
permitted to sublicense our operating subsidiaries to use them.

REGISTRATION RIGHTS AGREEMENT WITH ST. PAUL

Effective as of the completion of the Public Offering, the ESU Offering
and the St. Paul Investment, Platinum Holdings will enter into a registration
rights agreement with St. Paul. Under this agreement, commencing one year after
the completion of the Public Offering (unless we consent to an earlier date,
such consent not to be unreasonably withheld, provided that such earlier date
shall not be less than 180 days after completion of the Public Offering unless
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
Salomon Smith Barney Inc. consent), St. Paul will have the right to require us,
subject to specified exceptions, on four occasions, to register under the 1933
Act any Common Shares owned by St. Paul or its affiliates for sale in a public
offering. From and after the fifth anniversary after the completion of the
Public Offering, St. Paul will have the right to an additional two demand
registrations if St. Paul beneficially owns more than 9.9% of the Common Shares
then outstanding. We have also agreed to use our reasonable best efforts to
enable St. Paul, from and after the third anniversary of the completion of the
Public Offering, to distribute the Common Shares it beneficially owns in an
offering on a continuous or delayed basis pursuant to a registration statement
on Form S-3 or F-3 under the 1933 Act, provided that St. Paul gives us written
notice specifying the aggregate number of Common Shares that it intends to
attempt to distribute in each fiscal quarter at least ten business days prior to
the beginning of such fiscal quarter.

St. Paul may not require Platinum Holdings to effect more than one
demand registration per 12-month period, and St. Paul must include a number of
Common Shares in each demand registration with a market value equal to at least
$50 million, except that this limitation will not apply to St. Paul's last
demand registration. If we propose to file a registration statement covering
Common Shares at any time, St. Paul will have the right to include Common Shares
held by it or its affiliates (including shares obtainable pursuant to the St.
Paul Option and upon the settlement of the purchase contracts forming part of
the equity security units on , 2005) in the registration, in each case on a
second-priority basis pro-rata with any other shareholders, with Platinum
Holdings including its shares on a first-priority basis.

SUBLEASE AGREEMENTS

Effective as of the completion of the Public Offering, the ESU Offering
and the St. Paul Investment, we will enter into various sublease agreements or
assignments of lease with St. Paul or one of its subsidiaries under which we
will rent office space in New York (until August 31, 2003), Chicago (until
August 31, 2005) and Miami (until November 30, 2006). We also expect to enter
into sublease agreements or assignments of lease with St. Paul or one of its
subsidiaries under which we will rent office space in London (until June 17,
2008) and Tokyo (until June 30, 2003). See "Business--Our Business--Our
Facilities".

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ST. PAUL OPTION AGREEMENT

Effective as of the completion of the Public Offering, Platinum
Holdings will enter into an agreement with St. Paul with respect to the St. Paul
Option, which will give St. Paul the right to purchase up to 6,000,000 Common
Shares under the circumstances described below. The exercise price per share
under the St. Paul Option is 120% of the initial public offering price per
share. The exercise price of the St. Paul Option is subject to antidilution
adjustment, including the following. If we make specified distributions,
including cash, in any calendar year to all or substantially all holders of our
Common Shares (the "Current Distribution") in an aggregate amount per Common
Share that, when combined with the aggregate amount per Common Share of all
other such distributions paid to all or substantially all holders of our Common
Shares within that calendar year, exceeds (1) for calendar year 2003, the
Initial Dividend (as defined below) or (2) for any subsequent calendar year, an
amount equal to the Initial Dividend increased at a rate of 10% per annum from
January 1, 2003, compounded annually on December 31 of each year commencing in
2003 (such excess of the Current Distribution being herein referred to as the
"Excess Distribution Amount"), the exercise price per share in effect
immediately prior to the close of business on the date fixed for such payment
shall be reduced by the Excess Distribution Amount, such reduction to become
effective immediately prior to the opening of business on the day following the
date fixed for such payment. The "Initial Dividend" means the distributions
described above per Common Share paid by us to all or substantially all holders
of our Common Shares during the 2003 calendar year as determined by our Board of
Directors, up to a maximum of $0.44 per Common Share.

The St. Paul Option is exercisable, in whole or in part, at any time
prior to the tenth anniversary of the completion of the Public Offering.

Exercise of the St. Paul Option by St. Paul in full immediately after
completion of the Public Offering would increase its percentage interest in our
Common Shares to approximately 26.1%, assuming no exercise of the underwriters',
St. Paul's and RenaissanceRe's options to purchase additional Common Shares in
connection with the Public Offering or of the RenaissanceRe Option. However, St.
Paul has agreed with Platinum Holdings that prior to any exercise of the St.
Paul Option, it will, if necessary, dispose of a sufficient number of Common
Shares so that, immediately after exercise of the St. Paul Option, St. Paul will
not be a "United States 25% Shareholder". See "Description of our Common
Shares--Restrictions on Transfer".

The St. Paul Option provides that it may be transferred by St. Paul (1)
in the event of a merger of St. Paul into another person, or a sale, transfer or
lease of all or substantially all the assets of St. Paul to another person;
provided, that such transfer is to the other party to such transaction with St.
Paul or (2) at any time on or after the second anniversary of the date of
completion of the Public Offering to up to three institutional accredited
investors, subject to certain conditions set forth therein.

TRANSACTIONS IN ORDINARY COURSE OF BUSINESS WITH ST. PAUL

At present St. Paul Re does not provide a meaningful amount of
reinsurance to St. Paul. After completion of the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment, we expect to
compete for business from St. Paul on the same basis as other reinsurance
companies, but only to the extent that we are able to conclude that securing
that business would not cause us to be subject to the rules regarding "RPII"
under the Code. For a discussion of those rules, see "Certain Tax
Considerations--Taxation of Shareholders--United States Taxation of U.S. and
Non-U.S. Shareholders--United States Shareholders--RPII Companies" below.

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THE RENAISSANCERE INVESTMENT

We, St. Paul and RenaissanceRe have entered into the Investment
Agreement, and prior to completion of the Public Offering and the ESU Offering,
we, St. Paul and RenaissanceRe will enter into the other agreements described
below with respect to the RenaissanceRe Investment in Platinum and the business
arrangements between us and RenaissanceRe following the completion of the Public
Offering, the ESU Offering, the St. Paul Investment and the RenaissanceRe
Investment. RenaissanceRe is a Bermuda company principally engaged, through its
operating subsidiaries, in the property catastrophe reinsurance business.

INVESTMENT AGREEMENT

GENERAL. We have entered into an Investment Agreement with St. Paul and
RenaissanceRe, which sets forth the terms of the RenaissanceRe Investment as
well as certain continuing relationships between us and RenaissanceRe following
the completion of the Public Offering, the ESU Offering, the St. Paul Investment
and the RenaissanceRe Investment. The closing of the RenaissanceRe Investment is
conditioned on the completion of the Public Offering, the ESU Offering and the
St. Paul Investment.

PURCHASE AND SALE OF COMMON SHARES. Under the Investment Agreement,
RenaissanceRe or one of its wholly owned subsidiaries will purchase from us, at
a price per share equal to the initial public offering price less the
underwriting discount, 3,960,000 Common Shares (or 9.9% of the Common Shares
outstanding upon completion of the Public Offering, the ESU Offering, the St.
Paul Investment and the RenaissanceRe Investment, assuming no exercise of the
underwriters' option to purchase additional shares) in a private placement that
will close concurrently with the Public Offering, the ESU Offering and the St.
Paul Investment. If the underwriters exercise their option to purchase
additional Common Shares in the Public Offering, RenaissanceRe will have the
option to purchase, at a price per share equal to the initial public offering
price less the underwriters' discount, as many additional Common Shares as are
required in order for it to retain its 9.9% interest (up to a maximum of 594,000
Common Shares).

RENAISSANCERE OPTION. As additional consideration for RenaissanceRe's
investment, Platinum Holdings will issue to RenaissanceRe a ten-year option to
purchase up to an additional 2,500,000 Common Shares at a price per share equal
to 120% of the initial public offering price. See "--RenaissanceRe Option
Agreement" below.

RIGHT TO NOMINATE ONE DIRECTOR. The Investment Agreement provides that,
for so long as RenaissanceRe beneficially owns Common Shares representing at
least 62.5% of the Common Shares purchased pursuant to the Investment Agreement,
one qualified person designated by RenaissanceRe, who is reasonably acceptable
to Platinum Holdings, but not an officer, director or employee of RenaissanceRe
or any of its subsidiaries, will be nominated by Platinum Holdings for election
as a director of Platinum Holdings at each shareholder meeting at which
directors are elected. We will use our commercially reasonable efforts to cause
the election of such nominee to our Board of Directors, including by soliciting
proxies from our shareholders for such nominee and by voting all management
proxies in favor of such nominee, except for those proxies that specifically
indicate to the contrary. We will also use commercially reasonable efforts to
cause this director's appointment to the Executive Committee, and subject to
applicable law, rules and regulations, including stock exchange rules, to the
Nominating Committee and the Corporate Governance Committee of our Board of
Directors, if any. This director will be indemnified to the same extent under
our bye-laws as the other members of our Board of Directors. If at any time
RenaissanceRe beneficially owns Common Shares representing less than 62.5% of
the Common Shares purchased pursuant to the Investment Agreement, RenaissanceRe
will cause its nominated director to immediately resign as a director. For
purposes of the Investment Agreement,

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RenaissanceRe is not considered to "beneficially own" Common Shares that it has
the right to acquire upon exercise of the RenaissanceRe option.

The Investment Agreement also provides that, for so long as
RenaissanceRe beneficially owns Common Shares representing at least 62.5% of the
Common Shares purchased pursuant to the Investment Agreement, RenaissanceRe will
have the right to designate a representative to attend (but not to vote at)
meetings of our Board of Directors and to receive notices, agendas, minutes and
all other materials distributed to participants of such meetings.

In addition, RenaissanceRe will lose the right to nominate one director
or designate a representative to attend (but not to vote at) meetings of our
Board of Directors and to receive materials related to such meetings in the
event of any change in control of RenaissanceRe. If a change in control occurs,
upon our request, RenaissanceRe will cause its nominated director to immediately
resign from our Board of Directors. A change in control of RenaissanceRe will be
deemed to have occurred if (i) any person becomes the beneficial owner of more
than 50% of the outstanding common shares of RenaissanceRe or (ii) there occurs
a merger, consolidation or other business combination in which RenaissanceRe is
acquired (unless the shareholders of RenaissanceRe immediately before such
business combination own, directly or indirectly, immediately following such
business combination, at least a majority of the combined voting power of the
entity resulting from such business combination).

For three years from the anniversary of the date of the completion of
the Public Offering, we will not increase the number of directors on our Board
of Directors to more than nine without the prior written consent of
RenaissanceRe, such consent to be provided in RenaissanceRe's sole discretion.
This three-year period will be extended for up to an additional two years so
long as RenaissanceRe is accounting for its investment in us via the equity
method and RenaissanceRe reasonably believes (and confirms to us upon our
reasonable request) that its ability to continue to equity account for its
investment in us would be compromised by an increase in the number of directors.

INDEMNIFICATION AND WAIVER. The Investment Agreement provides that
Platinum Holdings shall indemnify (including reimbursement for expenses) to the
full extent permitted by law, RenaissanceRe, its subsidiaries and their
respective officers, directors, employees and agents, and each person who
controls any of them and the officers, directors, employees and agents of each
such controlling person (each a "RenaissanceRe Indemnitee") from and against any
and all liabilities arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration statement
relating to the Public Offering and the registration statement relating to the
ESU Offering, or arising out of or based upon any omission or alleged omission
from such registration statement to state a material fact required to be stated
or necessary to make the statements therein not misleading. If for any reason
the foregoing indemnification is unavailable to, or is insufficient to hold
harmless a RenaissanceRe Indemnitee, Platinum Holdings shall contribute to the
amount paid or payable by the RenaissanceRe Indemnitee in a proportion to
reflect the parties' relative benefits and relative faults.

LIMIT ON RECOVERY FROM PLATINUM OFFICERS AND DIRECTORS. The Investment
Agreement provides that, in any legal action which may be commenced by
RenaissanceRe against Platinum, its officers and/or its directors, RenaissanceRe
shall not recover from Platinum's officers or directors in excess of the amount
Platinum is able to indemnify such officers or directors other than in the
circumstance where such indemnification is restricted due to such officers
and/or directors having engaged in fraud, intentional misconduct or criminal
acts. Platinum's officers and directors are third party beneficiaries of this
agreement by RenaissanceRe.

COMPETITION. We will compete with RenaissanceRe in writing various
coverages, and the Investment Agreement does not restrict either party in
competing with the other.

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TRANSFER RESTRICTIONS, REGISTRATION RIGHTS AND STANDSTILL AGREEMENT

Effective as of the completion of the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment, we will
enter into a Transfer Restrictions, Registration Rights and Standstill Agreement
(the "Standstill Agreement") with RenaissanceRe.

TRANSFER RESTRICTIONS. The Standstill Agreement provides that, prior
to the first anniversary of the completion of the Public Offering, the ESU
Offering, the St. Paul Investment and the RenaissanceRe Investment,
RenaissanceRe may not transfer any interest in the Common Shares it purchased
pursuant to the Investment Agreement except (i) to any wholly owned subsidiary
of RenaissanceRe that enters into a standstill agreement with us containing
terms and conditions equivalent to those in the Standstill Agreement; (ii)
pursuant to any tender offer or exchange offer which is recommended by our Board
of Directors; or (iii) in a transfer by operation of law upon consummation of a
merger or consolidation of RenaissanceRe into another person. Any such permitted
transfer must be made in accordance with all applicable U.S. federal and state
securities laws.

The Standstill Agreement also provides that, except in connection with
any tender or exchange offer made to all holders of Common Shares and certain
other situations, RenaissanceRe may not at any time transfer more than 9.9% of
the Common Shares outstanding at the time of such transfer to any person that
generated 50% or more of its gross revenues in the most recent fiscal year for
which financial statements are available by writing property or casualty
insurance or reinsurance.

REGISTRATION RIGHTS. The Standstill Agreement provides that,
commencing one year after the completion of the Public Offering, RenaissanceRe
will have the right to require us, subject to specified exceptions, on four
occasions, to register under the Securities Act any Common Shares owned by
RenaissanceRe or its subsidiaries for sale in a public offering. From and after
the fifth anniversary after the completion of the Public Offering, RenaissanceRe
will have the right to an additional two demand registrations if RenaissanceRe
beneficially owns more than 9.9% of the Common Shares then outstanding. We have
also agreed to use our reasonable best efforts to enable RenaissanceRe, from and
after the third anniversary of the completion of the Public Offering, to
distribute the Common Shares it beneficially owns in an offering on a continuous
or delayed basis pursuant to a registration statement on Form S-3 or F-3 under
the 1933 Act, provided that RenaissanceRe gives us written notice specifying the
aggregate number of Common Shares that it intends to attempt to distribute in
each fiscal quarter at least ten business days prior to the beginning of such
fiscal quarter.

RenaissanceRe may not require Platinum Holdings to effect more than one
demand registration per 12-month period, and RenaissanceRe must include a number
of Common Shares in each demand registration with a market value equal to at
least $50 million, except that this limitation will not apply to RenaissanceRe's
last demand registration. If we propose to file a registration statement
covering Common Shares at any time, RenaissanceRe will have the right to include
Common Shares held by it or its subsidiaries (including shares obtainable
pursuant to the RenaissanceRe Option) in the registration, in each case on a
second-priority basis pro-rata with any other shareholders, with Platinum
Holdings including its shares on a first-priority basis.

STANDSTILL PROVISIONS. The Standstill Agreement provides that
RenaissanceRe and its subsidiaries will not, and RenaissanceRe will use its
commercially reasonable efforts to cause its affiliates and any officer,
employee, agent or representative of RenaissanceRe or such affilliates
(collectively, the "Representatives") to not, advise or encourage any party or
entity with respect to the voting of any of our voting securities in an attempt
to cause a change in control of Platinum Holdings, initiate or otherwise solicit
our shareholders for the granting of any proxy or the approval of one or more
shareholder proposals or induce any other party or entity to seek any proxy or
to initiate any shareholder proposal that results or is designed to result in a
change of control at

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Platinum Holdings or directly or indirectly acquire, announce an intention to
acquire, or agree to acquire, by purchase or otherwise, beneficial ownership of
any voting securities of Platinum Holdings, if, immediately after any such
acquisition, RenaissanceRe or any subsidiary of RenaissanceRe would beneficially
own, in the aggregate, more than 19.9% of the voting securities of Platinum
Holdings then outstanding (or up to 24.9% with our approval), provided that
there are no limitations on RenaissanceRe's ability to discuss any matter,
including a change of control of Platinum Holdings, with St. Paul or any of its
affiliates.

SHARE BUY-BACK PROGRAMS. The Standstill Agreement provides that if
Platinum Holdings repurchases its Common Shares (and if applicable, New
Securities as specified below under "--Pre-Emptive Rights") in accordance with a
repurchase program approved by Platinum Holdings' Board of Directors, then
RenaissanceRe must sell to Platinum Holdings, on each day on which any Common
Shares are so repurchased at a price equal to the average price of repurchases
by Platinum Holdings on such day, that number of Common Shares which is
necessary to limit RenaissanceRe's beneficial ownership interest in Platinum
Holdings to no more than 19.9% of the outstanding voting securities of Platinum
Holdings (or up to 24.9% with our approval) after all such repurchases.
RenaissanceRe may require that any repurchases from it by Platinum Holdings must
be at the average purchase price of any repurchases effected by Platinum
Holdings on such day pursuant to Rule l0b-18 under the Exchange Act.

PRE-EMPTIVE RIGHTS. The Standstill Agreement provides that if Platinum
Holdings proposes to issue (a "Dilutive Transaction") any Common Shares or any
securities convertible into, exchangeable for or carrying in any way the right
to acquire Common Shares ("New Securities"), subject to specified exclusions, as
indicated below, RenaissanceRe will have the right to subscribe for up to such
number of new securities of Platinum Holdings as is necessary to maintain
RenaissanceRe's beneficial ownership interest in Platinum Holdings at the same
percentage owned immediately prior to the Dilutive Transaction. The precise
number of New Securities to be issued to RenaissanceRe will be rounded up to the
nearest round lot number. The issuance of Common Shares upon the settlement of
the purchase contracts forming part of the equity security units issued in the
ESU Offering is deemed to be a Dilutive Transaction. RenaissanceRe has the right
to register any Common Shares acquired by it pursuant to such pre-emptive rights
in accordance with the provisions of the Standstill Agreement described under
"Transfer Restrictions, Registration Rights and Standstill
Agreement--Registration Rights".

RenaissanceRe will have no pre-emptive rights with respect to any New
Securities issued pursuant to any director or employee benefit plans of Platinum
Holdings or any acquisition transaction engaged in by Platinum Holdings.
RenaissanceRe's pre-emptive rights to subscribe for new securities will
terminate at the time RenaissanceRe beneficially owns less than 6.25% of
Platinum Holdings' outstanding Common Shares. Furthermore, RenaissanceRe will
have no pre-emptive rights with respect to any proposed Dilutive Transaction if
(1) in an underwritten public offering, the underwriters request a reduction of
the number of New Securities to be issued; or (2) a nationally recognized
investment bank mutually agreed by Platinum Holdings and RenaissanceRe advises
RenaissanceRe and Platinum Holdings in writing to the effect that exercising

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RenaissanceRe's pre-emptive rights would materially hinder or interfere with the
proposed Dilutive Transaction. In addition, RenaissanceRe will have no
pre-emptive rights in the event of an issuance of Common Shares upon the
conversion or exchange of New Securities with respect to the issuance of which
RenaissanceRe had pre-emptive rights. In addition, RenaissanceRe will have no
preemptive rights to subscribe for New Securities if the ownership thereof would
cause RenaissanceRe to beneficially own more than 19.9% of the voting securities
of Platinum Holdings then outstanding (or up to 24.9% with our approval).

RENAISSANCERE OPTION AGREEMENT

Effective as of the completion of the Public Offering, Platinum
Holdings will enter into an agreement with RenaissanceRe with respect to the
RenaissanceRe Option, which will give RenaissanceRe the right to purchase up to
2,500,000 Common Shares under the circumstances described below. The exercise
price per share under the RenaissanceRe Option is 120% of the initial public
offering price per share. The exercise price of the RenaissanceRe Option is
subject to anti-dilution provisions, including the following. If we make
specified distributions, including cash, in any calendar year to all or
substantially all holders of our Common Shares (the "Current Distribution") in
an aggregate amount per Common Share that, when combined with the aggregate
amount per Common Share of all other such distributions paid to all or
substantially all holders of our Common Shares within that calendar year exceeds
(1) for calendar year 2003, the Initial Dividend (as defined below) or (2) for
any subsequent calendar year, an amount equal to the Initial Dividend increased
at a rate of 10% per annum from January 1, 2003, compounded annually on December
31 of each year commencing in 2003 (such excess of the Current Distribution
being herein referred to as the "Excess Distribution Amount"), the exercise
price per share in effect immediately prior to the close of business on the date
fixed for such payment shall be reduced by the Excess Distribution Amount, such
reduction to become effective immediately prior to the opening of business on
the day following the date fixed for such payment. The "Initial Dividend" means
the distributions described above per Common Share paid by us to all or
substantially all holders of our Common Shares during the 2003 calendar year as
determined by our Board of Directors, up to a maximum of $0.44 per Common Share.

The RenaissanceRe Option is exercisable, in whole or in part, at any
time prior to the tenth anniversary of the completion of the Public Offering.

Exercise of the RenaissanceRe Option by RenaissanceRe in full
immediately after completion of the Public Offering would increase its
percentage interest in our Common Shares to approximately 15%, assuming no
exercise of the underwriters', St. Paul's and RenaissanceRe's options to
purchase additional Common Shares in connection with the Public Offering.

RenaissanceRe has agreed with Platinum Holdings that prior to any
exercise of the RenaissanceRe Option, it will, if necessary, dispose of a
sufficient number of Common Shares so that, immediately after exercise of the
RenaissanceRe Option, RenaissanceRe will not beneficially own more than 19.9% of
the voting securities of Platinum Holdings then outstanding (or up to 24.9% with
our approval). See "Description of our Common Shares--Restrictions on Transfer".

The RenaissanceRe Option provides that it may be transferred by
RenaissanceRe (1) in the event of a merger of RenaissanceRe into another person,
or a sale, transfer or lease of all or substantially all the assets of
RenaissanceRe to another person; provided that such transfer is to the other
party to such transaction with RenaissanceRe or (2) at any time on or after the
second anniversary of the date of completion of the Public Offering to up to
three institutional accredited investors, subject to certain conditions set
forth therein.

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BUSINESS ARRANGEMENTS

We will enter into the Services and Capacity Reservation Agreement with
RenaissanceRe as described below, and we also expect to engage in other
transactions with RenaissanceRe in the ordinary course of business. The terms of
any of our transactions with RenaissanceRe may be less favorable to us than the
terms that would be available to us from an independent third party. St. Paul
and RenaissanceRe have informed us that they expect to engage in transactions
with each other in the ordinary course of business.

SERVICES AND CAPACITY RESERVATION AGREEMENT. Subject to completion of
the Public Offering, the ESU Offering, the St. Paul Investment and the
RenaissanceRe Investment, we will enter into a five-year Services and Capacity
Reservation Agreement with RenaissanceRe, effective October 1, 2002, pursuant to
which RenaissanceRe will provide services to us in connection with our property
catastrophe book of business.

No more than twice per year, in October and March or at such other
times as may be agreed to by RenaissanceRe, at our request RenaissanceRe will
analyze our property catastrophe treaties and contracts and will assist us in
measuring risk and managing our aggregate catastrophe exposures.

At our request, and based upon the analysis described above,
RenaissanceRe will provide us with quotations for rates for non-marine property
catastrophe retrocessional coverage with aggregate limits up to $100,000,000
annually, either on an excess-of-loss or proportional basis. Such quotations
will be in RenaissanceRe's sole discretion, which is expected to reflect, among
other things, an analysis of exposure, limit, retention, exclusions and other
treaty terms. The annual fee for the coverage commitment and the services
described above that we will pay to RenaissanceRe will be the greater of (i)
$4,000,000 and (ii) 3.5% of our aggregate gross written non-marine non-finite
property catastrophe premium (including reinstatements), adjusted annually 30
days after each anniversary and payable in addition to any retrocessional
premium otherwise payable to RenaissanceRe for retrocessional coverage purchased
by us from RenaissanceRe. Either party may terminate this agreement if the other
party is deemed impaired or insolvent by applicable regulatory or judicial
authorities or is the subject of conservation, rehabilitation, liquidation,
bankruptcy or other similar insolvency proceedings.

POSSIBLE REFERRALS. We expect that we and RenaissanceRe may refer
business to each other, to be accepted in the discretion of the party receiving
the referral, and that compensation will be paid for referral business at
negotiated rates.

TRANSACTIONS IN ORDINARY COURSE OF BUSINESS WITH RENAISSANCERE. At
present St. Paul Re does not provide or obtain a meaningful amount of
reinsurance to or from RenaissanceRe. After completion of the Public Offering,
the ESU Offering, the St. Paul Investment and the RenaissanceRe Investment, we
expect that, in addition to the arrangements referred to above, we will compete
for business from and engage in other transactions with RenaissanceRe on the
same basis as other reinsurance companies, but only to the extent that we are
able to conclude that securing that business would not cause us to be subject to
the rules regarding "RPII" under the Code. For a discussion of those rules, see
"Certain Tax Considerations--Taxation of Shareholders--United States Taxation of
U.S. and Non-U.S. Shareholders--United States Shareholders--RPII Companies"
below.

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DESCRIPTION OF OUR COMMON SHARES

The following description of the share capital of Platinum Holdings
summarizes certain provisions of Platinum Holdings' bye-laws. A copy of Platinum
Holdings' bye-laws is filed as an exhibit to the Registration Statement of which
this prospectus is a part. All references in this description to "we", "us",
"our" and the "Company" refer to Platinum Holdings unless the context otherwise
requires.

GENERAL

At the completion of the Public Offering, the ESU Offering, the St.
Paul Investment and the RenaissanceRe Investment, our authorized share capital
will consist of: (i) 200,000,000 Common Shares, par value $0.01 per share, of
which 40,000,000 Common Shares will be outstanding (assuming the underwriters'
option to purchase additional Common Shares is not exercised) and (ii)
25,000,000 preferred shares, par value $0.01 per share, none of which will be
outstanding.

COMMON SHARES

Holders of Common Shares have no pre-emptive, redemption, conversion or
sinking fund rights, provided, however, that pursuant to the Formation and
Separation Agreement and the Standstill Agreement, Platinum Holdings has granted
St. Paul and RenaissanceRe, respectively, the pre-emptive rights specified
therein. See "Certain Relationships and Related Transactions--The St. Paul
Investment--Formation and Separation Agreement" and "--The RenaissanceRe
Investment--Transfer Restrictions, Registration Rights and Standstill
Agreement". Subject to the limitation on voting rights described below, holders
of Common Shares are entitled to one vote per share on all matters submitted to
a vote of holders of Common Shares. Most matters to be approved by holders of
Common Shares require approval by a simple majority vote. The holders of at
least 75% of the Common Shares voting in person or by proxy at a meeting must
generally approve an amalgamation with another company. In addition, a
resolution to remove our auditor before the expiration of his term of office
must be approved by at least two-thirds of the votes cast at a meeting of the
shareholders of the Company. The quorum for any meeting of our shareholders is
two or more persons holding or representing more than 50% of the outstanding
Common Shares on an unadjusted basis. Our Board of Directors has the power to
approve our discontinuation from Bermuda to another jurisdiction. The rights
attached to any class of shares, common or preferred, may be varied with the
consent in writing of the holders of at least three-fourths of the issued shares
of that class or with the sanction of a resolution passed by a majority of the
votes cast at a separate general meeting of the holders of the shares of the
class in accordance with the Bermuda Companies Act.

In the event of a liquidation, dissolution or winding-up of the
Company, the holders of Common Shares are entitled to share equally and ratably
in the assets of the Company, if any, remaining after the payment of all debts
and liabilities of the Company and the liquidation preference of any outstanding
preferred shares. All outstanding Common Shares are fully paid and
nonassessable. Authorized but unissued shares may, subject to any rights
attaching to existing shares, be issued at any time and at the discretion of the
Board of Directors without the approval of the shareholders of the Company with
such rights, preferences and limitations as the Board may determine.

LIMITATION ON VOTING RIGHTS

Each Common Share has one vote on a poll of the shareholders, except
that, if and for as long as the number of issued Controlled Shares (as defined
below) of any person would constitute 10%

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or more of the combined voting power of the issued Common Shares of the Company
(after giving effect to any prior reduction in voting power as described below),
each issued Controlled Share, regardless of the identity of the registered
holder thereof, will confer a fraction of a vote as determined by the following
formula:

(T - C) / (9.1 x C)

Where: (1) "T" is the aggregate number of votes conferred by all the
issued Common Shares immediately prior to that application of
the Formula with respect to such issued Controlled Shares
adjusted to take into account any prior reduction taken with
respect to any issued Controlled Shares pursuant to the
"sequencing provision" described below; and

(2) "C" is the number of issued Controlled Shares attributable to
that person. "Controlled Shares" of any person refers to all
Common Shares owned by that person, whether (i) directly, (ii)
with respect to persons who are U.S. persons, by application
of the attribution and constructive ownership rules of
Sections 958(a) and 958(b) of the Code or (iii) beneficially,
directly or indirectly, within the meaning of Section 13(d)(3)
of the Exchange Act, and the rules and regulations thereunder.

The formula will be applied successively as many times as may be
necessary to ensure that no person will be a 10% Shareholder (as defined below)
at any time (the "sequencing provision"). For the purposes of determining the
votes exercisable by shareholders as of any date, the formula will be applied to
the Common Shares of each shareholder in declining order based on the respective
numbers of total Controlled Shares attributable to each shareholder. Thus, the
formula will be applied first to the votes of Common Shares held by the
shareholder to whom the largest number of total Controlled Shares is
attributable and thereafter sequentially with respect to the shareholder with
the next largest number of total Controlled Shares. In each case, calculations
are made on the basis of the aggregate number of votes conferred by the issued
Common Shares as of such date, as reduced by the application of the formula to
any issued Common Shares of any shareholder with a larger number of total
Controlled Shares as of such date. "10% Shareholder" means a person who owns, in
the aggregate, (i) directly, (ii) with respect to persons who are U.S. persons,
by application of the attribution and constructive ownership rules of Sections
958(a) and 958(b) of the Code or (iii) beneficially, directly or indirectly,
within the meaning of Section 13(d)(3) of the Exchange Act, issued Common Shares
of the Company carrying 10% or more of the total combined voting rights
attaching to all issued Common Shares.

Because of the voting limitation described in the preceding paragraph,
the Common Shares owned by St. Paul will have reduced voting rights and if
RenaissanceRe ever owns 10% of more of our Common Shares, the Common Shares
owned by RenaissanceRe will also have reduced voting rights. Should St. Paul
(or, if applicable, RenaissanceRe) dispose of some or all of the Common Shares
it owns, the reduced voting rights with respect to the Common Shares disposed of
by St. Paul (or, if applicable, RenaissanceRe) will be eliminated (except if the
disposition is to any other person who holds, or who as a result of such
transaction would hold, 10% or more of our total voting rights), and those
Common Shares thereafter will be entitled to full voting rights, subject to
future dilution to avoid creating a 10% shareholder. Therefore, the voting power
of the Common Shares held by all of our shareholders other than St. Paul (or, if
applicable, RenaissanceRe) will be diluted upon any such disposition by St. Paul
(or, if applicable, RenaissanceRe). Although St. Paul has informed us that it
currently intends to continue its share ownership in Platinum Holdings for the
foreseeable future, there can be no assurance in this regard.

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Our directors are empowered to require any shareholder to provide
information as to that shareholder's beneficial ownership of Common Shares, the
names of persons having beneficial ownership of the shareholder's Common Shares,
relationships, associations or affiliations with other shareholders or any other
facts the directors may deem relevant to a determination of the number of
Controlled Shares attributable to any person. Our directors may disregard the
votes attached to the Common Shares of any holder failing to respond to such a
request or submitting incomplete or untrue information.

Our directors retain certain discretion to make such final adjustments
to the aggregate number of votes attaching to the Common Shares of any
shareholder that they consider fair and reasonable in all the circumstances to
ensure that no person will be a 10% Shareholder at any time.

RESTRICTIONS ON TRANSFER

Our bye-laws contain several provisions restricting the transferability
of Common Shares. The directors are required to decline to register a transfer
of Common Shares if they have reason to believe that the result of such transfer
would be (i) that any person other than a St. Paul Person or a RenaissanceRe
Person would become or continue to be a 10% Shareholder or (ii) that a St. Paul
Person or a RenaissanceRe Person would become or continue to be a United States
25% Shareholder, in each case without giving effect to the limitation on voting
rights described above. Similar restrictions apply to the Company's ability to
issue or repurchase Common Shares. "St. Paul Person" means any of St. Paul and
its affiliates following the completion of the Public Offering, "United States
25% Shareholder" means a U.S. person who owns, directly or by application of the
constructive ownership rules of Sections 958(a) and 958(b) of the Code, 25% or
more of either (i) the total combined voting rights attaching to the issued
Common Shares and the issued shares of any other class of the Company or (ii)
the total combined value of the issued Common Shares and any other issued shares
of the Company, determined pursuant to Section 957 of the Code, and
"RenaissanceRe Person" means any of RenaissanceRe and its affiliates following
the completion of the Public Offering. Only for the purposes of these provisions
of our bye-laws, it is assumed that all RenaissanceRe Persons are U.S. Persons.
These restrictions on the transfer, issuance or repurchase of shares do not
apply to any issuance of shares pursuant to a contract to purchase Common Shares
from Platinum Holdings included in the equity security units, though the
limitations on voting rights, discussed above, do apply to such Common Shares.

Our directors also may, in their absolute discretion, decline to
register the transfer of any Common Shares if they have reason to believe (i)
that the transfer may expose us, any of our subsidiaries, any shareholder or any
person ceding insurance to any of our subsidiaries to adverse tax or regulatory
treatment in any jurisdiction or (ii) that registration of the transfer under
the 1933 Act or under any U.S. state securities laws or under the laws of any
other jurisdiction is required and such registration has not been duly effected.
In addition, our directors may decline to approve or register a transfer of
shares unless all applicable consents, authorizations, permissions or approvals
of any governmental body or agency in Bermuda, the United States or any other
applicable jurisdiction required to be obtained prior to such transfer shall
have been obtained.

We are authorized to request information from any holder or prospective
acquiror of Common Shares as necessary to give effect to the transfer, issuance
and repurchase restrictions described above, and may decline to effect any
transaction if complete and accurate information is not received as requested.

Conyers, Dill & Pearman, our Bermuda counsel, has advised us that while
the precise form of the restrictions on transfer contained in our bye-laws is
untested, as a matter of general principle,

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restrictions on transfers are enforceable under Bermuda law and are not
uncommon. A proposed transferee will be permitted to dispose of any Common
Shares purchased that violate the restrictions and as to the transfer of which
registration is refused. The proposed transferor of those Common Shares will be
deemed to own those Common Shares for dividend, voting and reporting purposes
until a transfer of such Common Shares has been registered on the register of
shareholders of the Company.

If the directors refuse to register a transfer for any reason, they
must notify the proposed transferor and transferee within thirty days of such
refusal. Our bye-laws also provide that our Board of Directors may suspend the
registration of transfers for any reason and for such periods as it may
determine, provided that it may not suspend the registration of transfers for
more than 45 days in any period of 365 consecutive days.

Our directors may designate our Chief Executive Officer to exercise
their authority to decline to register transfers or to limit voting rights as
described above, or to take any other action, for as long as the Chief Executive
Officer is also a director.

The voting restrictions and restrictions on transfer described above
may have the effect of delaying, deferring or preventing a change in control of
us.

PREFERRED SHARES

Pursuant to our bye-laws and Bermuda law, our Board of Directors by
resolution may establish one or more series of preferred shares having a number
of shares, designations, relative voting rights, dividend rates, liquidation and
other rights, preferences, limitations and powers as may be fixed by the Board
of Directors without any further shareholder approval which, if any preferred
shares are issued, will include restrictions on voting and transfer intended to
avoid having us constitute a "controlled foreign corporation" for U.S. federal
income tax purposes. If our Board of Directors issues preferred shares
conferring any voting rights, it will amend our bye-laws to apply the
limitations on the voting rights discussed above under "--Limitation on Voting
Rights" to those preferred shares. Any rights, preferences, powers and
limitations as may be established could also have the effect of discouraging an
attempt to obtain control of the Company. The issuance of preferred shares could
also adversely affect the voting power of the holders of our Common Shares, deny
such holders the receipt of a premium on their Common shares in the event of a
tender or other offer for the Common Shares and depress the market price of the
Common Shares. We have no current plans to issue any preferred shares.

BYE-LAWS

Our bye-laws provide for our corporate governance, including the
establishment of share rights, modification of those rights, issuance of share
certificates, imposition of a lien over shares in respect of unpaid amounts on
those shares, calls on shares which are not fully paid, forfeiture of shares,
the transfer of shares, alterations of capital, the calling and conduct of
general meetings, proxies, the appointment and removal of directors, conduct and
power of directors, the payment of dividends, the appointment of an auditor and
our winding-up.

Our bye-laws provide that our Board of Directors shall be elected
annually and shall not be staggered. Shareholders may only remove a director for
cause prior to the expiration of that director's term at a special meeting of
shareholders at which a majority of the holders of shares voting thereon vote in
favor of that action. For a description of the number and term of our Directors,
see "Management--Number and Terms of Directors" above.

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Our bye-laws also provide that if our Board of Directors in its
absolute discretion determines that share ownership by any shareholder may
result in adverse tax, regulatory or legal consequences to us, any of our
subsidiaries or any other shareholder, then we will have the option, but not the
obligation, to repurchase all or part of the shares held by such shareholder to
the extent the Board of Directors determines it is necessary to avoid such
adverse or potential adverse consequences. The price to be paid for such shares
will be the fair market value of such shares.

Platinum Holdings' bye-laws and those of Platinum Bermuda and Platinum
Ireland provide that matters required to be submitted to a vote of their
shareholders are required to be submitted to Platinum Holdings' shareholders and
the shareholders of such subsidiaries are required to vote the subsidiaries'
shares in accordance with and in proportion to the vote of Platinum Holdings'
shareholders.

TRANSFER AGENT

Our registrar and transfer agent for the Common Shares is Mellon
Investor Services LLC.

DIFFERENCES IN CORPORATE LAW

The Companies Act differs in certain material respects from laws
generally applicable to U.S. corporations and their shareholders. Set forth
below is a summary of certain significant provisions of the Companies Act
(including modifications adopted pursuant to our bye-laws) applicable to us,
which differ in certain respects from provisions of Delaware corporate law,
which is the law that governs many U.S. public companies. The following
statements are summaries, and do not purport to deal with all aspects of Bermuda
law that may be relevant to us and our shareholders.

INTERESTED DIRECTORS. Our bye-laws provide that transactions we enter
into in which a director has an interest are not voidable by us, nor can the
interested director be liable to us for any profit realized pursuant to such
transactions, provided the nature of the interest is disclosed at the first
opportunity at a meeting of directors, or in writing to the directors. Under
Delaware law, such a transaction would not be voidable if (i) the material facts
as to the interested director's relationship or interests are disclosed or are
known to the board of directors and the board in good faith authorized the
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors constitute less than a
quorum, (ii) the material facts as to the director's relationship or interest
and as to the transaction are disclosed or are known to the shareholders
entitled to vote on the transaction and the transaction is specifically approved
in good faith by vote of the shareholders or (iii) the transaction is fair to
the corporation as of the time it is authorized, approved or ratified by the
board of directors, a committee of the board of directors or the shareholders.
Under Delaware law, the interested director could be held liable for a
transaction in which that director derived an improper personal benefit.

MERGERS AND SIMILAR ARRANGEMENTS. We may acquire the business of
another Bermuda company or a company incorporated outside Bermuda and carry on
such business when it is within the objects of our memorandum of association. In
the case of an amalgamation, we may amalgamate with another Bermuda company or
with an entity incorporated outside Bermuda. A shareholder who did not vote in
favor of the amalgamation may apply to a Bermuda court for a proper valuation of
his or her shares if he or she is not satisfied that fair value has been offered
for those shares. The court ordinarily would not disapprove the transaction on
that ground absent evidence of fraud or bad faith. Under Delaware law, with
certain exceptions, a merger, consolidation or sale of all or substantially all
the assets of a corporation must be approved by the board of directors and the
holders of a majority of the outstanding shares entitled to vote thereon. Under

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Delaware law, a stockholder of a corporation participating in certain major
corporate transactions may, under certain circumstances, be entitled to
appraisal rights pursuant to which the stockholder may receive cash in the
amount of the fair value of the shares held by that stockholder (as determined
by a court) in lieu of the consideration that stockholder would otherwise
receive in the transaction. Delaware law does not provide stockholders of a
corporation with voting or appraisal rights when the corporation acquires
another business through the issuance of its stock or other consideration (i) in
exchange for the assets of the business to be acquired, (ii) in exchange for the
outstanding stock of the corporation to be acquired; (iii) in a merger of the
corporation to be acquired with a subsidiary of the acquiring corporation or
(iv) in a merger in which the corporation's certificate of incorporation is not
amended and the corporation issues less than 20% of its common stock outstanding
prior to the merger.

TAKEOVERS. Bermuda law provides that where an offer is made for shares
of another company and, within four months of the offer, the holders of not less
than 90% of the shares which are the subject of the offer (other than shares
held by or for the offeror or its subsidiaries) accept, the offeror may by
notice require the nontendering shareholders to transfer their shares on the
terms of the offer. Dissenting shareholders may apply to the court within one
month of the notice objecting to the transfer. The burden is on the dissenting
shareholders to show that the court should exercise its discretion to enjoin the
required transfer, which the court will be unlikely to do unless the offer is
obviously and convincingly unfair. Delaware law provides that a parent
corporation, by resolution of its board of directors and without any shareholder
vote, may merge with any subsidiary of which it owns at least 90% of the
outstanding shares of each class of stock that is entitled to vote on the
transaction. Upon any such merger, dissenting stockholders of the subsidiary
would have appraisal rights.

SHAREHOLDER'S SUIT. The rights of shareholders under Bermuda law are
not as extensive as the rights of shareholders under legislation or judicial
precedent in many U.S. jurisdictions. Class actions and derivative actions are
generally not available to shareholders under the laws of Bermuda. However, the
Bermuda courts ordinarily would be expected to follow English case law
precedent, which would permit a shareholder to commence an action in our name to
remedy a wrong done to us where the act complained of is alleged to be beyond
our corporate power or is illegal or would result in the violation of our
memorandum of association or bye-laws. Furthermore, consideration would be given
by the court to acts that are alleged to constitute a fraud against the minority
shareholders or where an act requires the approval of a greater percentage of
shareholders than actually approved it. The winning party in such an action
generally would be able to recover a portion of attorneys' fees incurred in
connection with such action. Class actions and derivative actions generally are
available to stockholders under Delaware law for, among other things, breach of
fiduciary duty, corporate waste and actions not taken in accordance with
applicable law. In such actions, the court has discretion to permit the winning
party to recover attorneys' fees incurred in connection with such action.

INDEMNIFICATION OF DIRECTORS. Our bye-laws indemnify our directors and
officers in their capacity as such in respect of any loss arising or liability
attaching to them by virtue of any rule of law in respect of any negligence,
default, breach of duty or breach of trust of which a director or officer may be
guilty in relation to us other than in respect of his own fraud or dishonesty,
which is the maximum extent of indemnification permitted under the Companies
Act. Under Delaware law, a corporation may indemnify a director or officer of
the corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred in defense or an
action, suit or proceeding by reason of such position if (i) the director or
officer acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best

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interests of the corporation and (ii) with respect to any criminal action or
proceeding, if the director or officer had no reasonable cause to believe his
conduct was unlawful.

INSPECTION OF CORPORATE RECORDS. Members of the general public have the
right to inspect our public documents available at the office of the Registrar
of Companies in Bermuda, which will include our memorandum of association
(including our objects and powers) and alterations to our memorandum of
association, including any increase or reduction of our authorized capital. Our
shareholders have the additional right to inspect our bye-laws, minutes of
general meetings and our audited financial statements, which must be presented
to the annual general meeting of shareholders. Our register of shareholders is
also open to inspection by shareholders without charge, and to members of the
public for a fee. We are required to maintain a share register in Bermuda but
may establish a branch register outside Bermuda. We are required to keep at our
registered office a register of our directors and officers which is open for
inspection by members of the public without charge. Bermuda law does not,
however, provide a general right for shareholders to inspect or obtain copies of
any other corporate records. Delaware law permits any stockholder to inspect or
obtain copies of a corporation's stockholder list and its other books and
records for any purpose reasonably related to such person's interest as a
stockholder.

ENFORCEMENT OF JUDGMENTS AND OTHER MATTERS. We have been advised by
Conyers, Dill & Pearman, our Bermuda counsel, that there is doubt as to whether
the courts of Bermuda would enforce (1) judgments of United States courts
obtained in actions against us or our directors and officers, as well as the
experts named in this prospectus who reside outside the United States predicated
upon the civil liability provisions of the United States federal securities laws
and (2) original actions brought in Bermuda against us or our directors and
officers, as well as the experts named in this prospectus who reside outside the
United States predicated solely upon United States federal securities laws.
There is no treaty in effect between the United States and Bermuda providing for
such enforcement, and there are grounds upon which Bermuda courts may not
enforce judgments of United States courts. Certain remedies available under the
laws of U.S. jurisdictions, including certain remedies available under the U.S.
federal securities laws, would not be allowed in Bermuda courts as contrary to
Bermuda's public policy.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Public Offering, there has been no public market for the
Common Shares, and no predictions can be made as to the effect, if any, that
market sales of Common Shares or the availability of Common Shares for sale will
have on the market price prevailing from time to time. Public or private sales
of substantial amounts of Common Shares, or the perception that such sales could
take place, may adversely affect prevailing market prices of the Common Shares
as well as the ability of the Company to raise additional capital in the public
equity markets at a desirable time and price.

Upon completion of the Public Offering, the ESU Offering, the St. Paul
Investment and the RenaissanceRe Investment, Platinum Holdings will have
outstanding 40,000,000 Common Shares (assuming the underwriters' option to
purchase additional Common Shares is not exercised), 30,040,000 of which will
have been sold in the Public Offering, 6,000,000 of which will have been issued
in the St. Paul Investment and 3,960,000 of which will have been issued in the
RenaissanceRe Investment, each as described under "St. Paul Investment,
RenaissanceRe Investment and Principal Shareholders". In the event the
underwriters' option to purchase additional Common Shares is exercised in full,
St. Paul has the option to purchase (at a price per share equal to the initial
public offering price less the underwriting discount) up to an aggregate of
900,000 Common Shares in order to maintain its 15.0% initial share ownership in
Platinum Holdings, and RenaissanceRe has the option to purchase (at a price per
share equal to the initial public offering price less the underwriting discount)
up to an aggregate of 594,000 Common Shares in order to maintain its 9.9%
initial share ownership in Platinum Holdings. As a result, if the underwriters'
option to purchase additional Common Shares is exercised in full and St. Paul
and RenaissanceRe exercise in full their options to maintain their respective
ownership interests, there would be outstanding an additional 6,000,000 Common
Shares. Furthermore, upon the settlement of the purchase contracts forming part
of the equity security units on , 2005, an additional number of Common Shares,
to be determined based upon a settlement rate, will be sold to the holders of
the equity security units. In that event, St. Paul and RenaissanceRe may
exercise their pre-emptive rights to purchase a corresponding number of Common
Shares to maintain their proportionate ownership interests in Platinum Holdings.
In addition, St. Paul may acquire up to an additional 6,000,000 Common Shares
through exercise of the St. Paul Option and RenaissanceRe may acquire up to an
additional 2,500,000 Common Shares through exercise of the RenaissanceRe Option.
The Common Shares sold in the Public Offering and issuable to the holders of
equity security units on , 2005 will be freely transferable without
restriction or further registration under the 1933 Act, except for any of those
Common Shares owned at any time by an "affiliate" of the Company within the
meaning of Rule 144 under the 1933 Act (which sales will be subject to volume
limitations and certain other restrictions). The Common Shares issued in the St.
Paul Investment and the RenaissanceRe Investment or upon exercise of the St.
Paul Option or the RenaissanceRe Option, and the Common Shares St. Paul and
RenaissanceRe may purchase, through their pre-emptive rights, upon the
settlement of the purchase contracts forming part of the equity security units,
will be deemed "restricted securities" as defined in Rule 144 under the 1933 Act
and may not be resold in the absence of registration under the 1933 Act or
pursuant to an exemption from such registration, including the exemption
provided by Rule 144 under the 1933 Act.

In connection with the St. Paul Investment and the RenaissanceRe
Investment, Platinum Holdings granted St. Paul and RenaissanceRe the right to
require the registration of their Common Shares under the 1933 Act. See "Certain
Relationship and Related Transactions--The St. Paul Investment--Registration
Rights Agreement with St. Paul" and "--The RenaissanceRe Investment--Transfer
Restrictions, Registration Rights and Standstill Agreement--Registration
Rights".

Platinum Holdings, its executive officers and directors, and St. Paul
and RenaissanceRe have agreed with the underwriters not to offer, sell, contract
to sell, pledge, grant any option to purchase,

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hedge, make any short sale or otherwise dispose of any of their Common Shares or
equity security units (including purchase contracts and senior notes) or any
securities of the Company that are substantially similar to Common Shares or
equity security units (including purchase contracts and senior notes) or any
options or warrants to purchase any Common Shares or equity security units
(including purchase contracts and senior notes) or securities convertible into
or exchangeable for or that represent the right to receive Common Shares or
equity security units (including purchase contracts and senior notes) (other
than the equity security units to be offered and sold concurrently with this
offering and the securities to be offered and sold in the St. Paul Investment
and the RenaissanceRe Investment) during the period from the date of this
prospectus continuing through the date 180 days after the date of this
prospectus, except with the prior written consent of Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Salomon Smith Barney
Inc. This agreement does not apply to any existing employee benefit plans.

DESCRIPTION OF THE EQUITY SECURITY UNITS

THE UNITS

Concurrently with the closing of the Public Offering, we will be
selling, by means of a separate prospectus, % equity security units for total
gross offering proceeds of $125 million, plus up to an additional $18.75 million
of gross proceeds if the underwriters exercise in full their option to purchase
additional equity security units. Each unit will initially consist of: (1) a
contract under which the holder agrees to purchase, for $25, shares of our
Common Shares on , 2005, with the number of shares the holder will receive to
be determined by the settlement rate described below, which will be based on the
average trading price of our Common Shares at that time; and (2) a 1/40, or
2.5%, ownership interest in a % senior note, due , 2007, of Platinum
Finance with a principal amount of $1,000. The ownership interest in the senior
note will initially be pledged to secure the holder's obligations under the
purchase contract. If a holder desires to have the senior note released from the
pledge, such holder may substitute specified U.S. Treasury securities for the
senior note as collateral, thereby creating a "stripped" unit.

THE PURCHASE CONTRACTS

The purchase contract underlying a unit obligates the holder to
purchase, and us to sell, for $25, on , 2005, a number of newly issued Common
Shares. We will determine the number of shares the holder will receive by the
settlement rate described below, based on the average closing price of the
Common Shares during a specified period prior to the share purchase date. We
will pay the holder quarterly contract adjustment payments on the purchase
contracts at the annual rate of % of the stated amount of $25 per purchase
contract, subject to our rights to defer these payments until the share purchase
date. We will make contract adjustment payments through and including the
earlier of or the most recent quarterly payment date on or before any early
settlement of the related purchase contracts. We have the option to defer
contract adjustment payments on the purchase contracts for up to three years. We
may elect the option to defer payments on more than one occasion. In no event
may we defer payments beyond the share purchase date. Deferred contract
adjustment payments will accrue additional contract adjustment payments until
paid, compounded on each succeeding quarterly payment date, at the annual rate
of %. This annual rate is equal to the sum of the initial interest rate on
the senior notes and the rate of contract adjustment payments on the purchase
contracts. If we defer contract adjustment payments until the share purchase
date, we may pay such deferred amounts in Common Shares. If the deferred
contract adjustment payments are paid in Common Shares, the number of Common
Shares will be determined by reference to the fair market value of our Common
Shares on , 2005. During any period in which we defer contract adjustment
payments, in general we cannot:

- declare or pay any dividend or distribution on our capital stock; or

- redeem, purchase, acquire or make a liquidation payment on any of
our capital stock.

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THE SENIOR NOTES

The senior notes will be senior, unsecured obligations of Platinum
Finance equal in right of payment to all of its existing and future unsecured
and unsubordinated indebtedness and will be guaranteed by Platinum Holdings on a
senior and unsecured basis. The senior notes will mature on , 2007. Each
senior note will initially bear interest at the rate of % per year,
payable quarterly in arrears on , , and of each year,
commencing , 2003, with the last quarterly payment occuring on , 2005.
After that date, interest will be paid semiannually in arrears on and
of each year, through , 2007.

We will irrevocably guarantee on a senior and unsecured basis the
payment in full of the interest payments that are required to be paid on the
senior notes, the principal amount of the senior notes, interest payments on
overdue interest payments, to the extent permitted by law, and principal amounts
due on the senior notes and any other payments due to holders of senior notes.

The senior notes will bear interest from the original issuance date. If
the senior notes are successfully remarketed, they will pay interest at the
reset rate, described below, from the settlement date of a successful
remarketing until they mature on , 2007. The reset rate will be the
interest rate on the notes determined by the reset agent to be sufficient to
cause the then current aggregate market value of all then outstanding notes to
be at least 100.25% of the remarketing value. If the remarketing agent cannot
establish a reset rate on , 2005 that will be sufficient to cause the then
current aggregate market value of all senior notes to be at least 100.25% of the
remarketing value, and as a result the senior notes cannot be sold, the interest
rate will not be reset but will continue to be the initial interest rate of the
senior notes, and the remarketing agent will then attempt to establish such a
reset rate on each of the two business days immediately following , 2005.
If the remarketing agent cannot establish such a reset rate on the two business
days immediately following , 2005, the remarketing agent will then attempt
to establish such a reset rate on each of the three business days preceding ,
2005. If the remarketing agent cannot establish such a reset rate during that
period, it will further attempt to establish such a reset rate on the third
business day immediately preceding the share purchase date.

REMARKETING

Through a remarketing by a nationally-recognized investment banking
firm, the senior notes held by the holders of units (other than stripped units),
other than those electing not to participate in the remarketing, will be sold
and the proceeds used to purchase U.S. Treasury securities, which will be
pledged to secure the unit holders' obligations under the purchase contracts.
Cash payments received upon maturity of the pledged treasury securities will be
used to satisfy the unit holders' obligations to purchase our Common Shares on
the share purchase date. Unless a holder elects not to participate in a
remarketing by delivering treasury securities to secure its obligations under
the purchase contract, the remarketing agent will attempt to remarket the senior
notes. If the remarketing agent fails to remarket the senior notes underlying
the normal units by the end of the third business day immediately preceding the
share purchase date, Platinum Holdings reserves all of its rights as a secured
party with respect to the senior notes and, subject to applicable law, may
retain the senior notes pledged as collateral or sell them in one or more public
or private sales.

SETTLEMENT

The settlement rate is the number of newly issued Common Shares that we
are obligated to sell and the holders are obligated to buy upon settlement of a
purchase contract on , 2005.

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The settlement rate for each purchase contract will be as follows, subject to
adjustment under specified circumstances:

- if the applicable market value (determined as described below) of
the Common Shares is equal to or greater than $ , the
settlement rate will be Common Shares per purchase contract;

- if the applicable market value of the Common Shares is less than $
but greater than $ , the settlement rate will be equal to
$25 divided by the applicable market value of the Common Shares
per purchase contract; or

- if the applicable market value of the Common Shares is less than
or equal to $ , the settlement rate will be Common Shares
per purchase contract.

The "applicable market value" means the average of the closing prices
per share of our Common Shares on each of the twenty consecutive trading days
ending on the third trading day preceding the share purchase date.

In addition to the remarketing, the holder's obligations under the
purchase contract may be satisfied:

- if the holder has elected not to participate in the remarketing by
delivering treasury securities to secure its obligations under the
purchase contract, and in certain other circumstances, through the
application of the cash payments received upon maturity of the
treasury securities;

- through the early delivery of cash to the purchase contract agent;
or

- if we are involved in a merger prior to the share purchase date in
which at least 30% of the consideration for our Common Shares
consists of cash or cash equivalents, through an early settlement.

In addition, the purchase contracts, our related rights and obligations
and those of the holders of the units, including their obligations to purchase
Common Shares, will automatically terminate upon the occurrence of our
bankruptcy, insolvency or reorganization. Upon termination, the senior notes or
treasury securities pledged to secure the holder's obligations under the
purchase contract will be released and distributed to the holder.

LISTING

The units have been approved for listing on the New York Stock Exchange
under the symbol "PTP Pr M" subject to notice of issuance.

ACCOUNTING TREATMENT

The net proceeds from the sale of the units will be allocated between
the purchase contracts and the senior notes in our consolidated financial
statements based on the underlying fair value of each instrument. The present
value of the purchase contract adjustment payments will be initially charged to
shareholders' equity, with an offsetting credit to liabilities. Subsequent
contract adjustment payments will be allocated between this liability account
and interest expense based on a constant rate calculation over the life of the
transaction.

The purchase contracts are forward transactions in our Common Shares.
Upon settlement of a purchase contract, we will receive $25 pursuant to that
purchase contract and will issue the requisite number of Common Shares. The $25
we receive will be credited to shareholders' equity and allocated between our
Common Shares and additional paid-in capital accounts.

Before the issuance of Common Shares upon settlement of the purchase
contracts, the purchase contracts will be reflected in our diluted earnings per
share calculations using the "if

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converted" method, which will assume that the Common Shares were issued and the
proceeds received were used to pay down the Senior Notes.

CERTAIN TAX CONSIDERATIONS

The following discussion of the taxation of Platinum Holdings, Platinum
US, Platinum UK, Platinum Bermuda and Platinum Ireland and the taxation of our
shareholders is based upon current law. Legislative, judicial or administrative
changes may occur which could affect this discussion, possibly on a retroactive
basis. The discussion does not address special classes of shareholders, such as
shareholders that own directly, or indirectly through certain foreign entities
or through the constructive ownership rules of the Code, 10% or more of the
voting power or value of Platinum Holdings. Except for matters where it is
explicitly stated that we will not receive an opinion of counsel, the statements
as to United States federal income tax law set forth below are the opinion of
Sullivan & Cromwell, our U.S. counsel, as to such tax laws (subject to the
qualifications, assumptions and factual determinations set forth in such
statements). The statements as to Bermuda tax law set forth below are the
opinion of Conyers, Dill & Pearman, our Bermuda counsel, as to such tax laws
(subject to the qualifications and assumptions set forth in such statements).
The statements as to U.K. tax law set forth below are the opinion of Slaughter
and May, our U.K. counsel, as to such tax laws (subject to the qualifications
and assumptions set forth in such statements). The statements as to Irish tax
law set forth below are the opinion of A. & L. Goodbody, our Irish counsel, as
to such tax laws (subject to the qualifications and assumptions set forth in
such statements). You are urged to consult your tax advisor as to the tax
consequences of ownership and disposition of your Common Shares.

TAXATION OF THE COMPANY, PLATINUM US, PLATINUM UK,
PLATINUM BERMUDA AND PLATINUM IRELAND

BERMUDA

Under current Bermuda law, there is no income tax, capital gains tax or
withholding tax payable by us or Platinum Bermuda. Platinum Holdings and
Platinum Bermuda have received from the Bermuda Minister of Finance a standard
assurance under Bermuda's Exempted Undertakings Tax Protection Act 1966, to the
effect that in the event any legislation is enacted in Bermuda imposing any tax
computed on profits or income, or computed on any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, then
the imposition of any such tax shall not be applicable to Platinum Holdings,
Platinum Bermuda, or any of their operations or the shares, debentures or other
obligations of Platinum Holdings or Platinum Bermuda, until 2016. This assurance
is subject to the proviso that it is not construed so as to prevent the
application of any tax or duty to such persons as are ordinarily resident in
Bermuda (Platinum Holdings and Platinum Bermuda are not currently so affected)
or to prevent the application of any tax payable in accordance with the
provisions of the Land Tax Act 1967 of Bermuda or otherwise payable in relation
to the property leased to us or Platinum Bermuda. Upon completion of the Public
Offering, Platinum Holdings and Platinum Bermuda, under current rates, will pay
annual Bermuda government fees of BD $27,825 and BD $3,635, respectively, and
Platinum Bermuda currently pays annual insurance fees of BD $16,540.

UNITED STATES FEDERAL INCOME TAXATION

We intend to structure and operate Platinum Holdings, Platinum UK,
Platinum Bermuda and Platinum Ireland in such a manner that they will not be
considered to be conducting business within the U.S. for purposes of U.S.
federal income taxation. Whether business is being conducted in the U.S. is an
inherently factual determination depending on such matters as (i) the size and
substance of the offices of our non-U.S. subsidiaries, (ii) whether employees of
non-U.S. subsidiaries make binding decisions while physically present in the
U.S., (iii) the number of

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employees permanently located in the offices of our non-U.S. subsidiaries, and
the levels of their managerial importance and (iv) the situs of meetings of our
board of directors and the boards of directors of our non-U.S. subsidiaries.
Because of the factual nature of these matters and because definitive
identification of activities which constitute being engaged in a trade or
business in the U.S. is not provided by the Code or regulations or court
decisions, counsel will not render an opinion regarding conducting business in
the U.S. The IRS might successfully contend that Platinum Holdings, Platinum UK,
Platinum Bermuda and/or Platinum Ireland is engaged in a trade or business in
the U.S. A foreign corporation deemed to be engaged in a U.S. trade or business
is subject to U.S. federal income tax, as well as branch profits tax in certain
circumstances, on its income which is treated as effectively connected with the
conduct of that trade or business unless the corporation is entitled to relief
under the permanent establishment provision of an applicable tax treaty, as
discussed below. Such income tax, if imposed, would be based on effectively
connected income computed in a manner generally analogous to that applied to the
income of a domestic corporation, except that a foreign corporation is entitled
to deductions and credits only if it files a U.S. income tax return. Under
regulations, the foreign corporation would be entitled to deductions and credits
for the taxable year only if the return for that year is timely filed under
rules, set forth therein. Penalties may be assessed for failure to file tax
returns. Platinum Holdings, Platinum UK, Platinum Bermuda and Platinum Ireland
do intend to file protective U.S. federal income tax returns. The federal tax
rates currently are a maximum of 35% for a corporation's effectively connected
income and 30% for branch profits tax. The branch profits tax is imposed on net
income after subtracting the regular corporate tax and making certain other
adjustments.

Under the income tax treaty between Bermuda and the United States,
Platinum Bermuda will not be subject to United States income tax on any net
premium income found to be effectively connected with a U.S. trade or business
unless that trade or business is conducted through a permanent establishment in
the United States. It is unclear whether the Bermuda treaty is equally
applicable to investment income. Because of the factual nature of, and the lack
of definitive parameters for determining the existence of, a permanent
establishment and the lack of clarity in the Bermuda treaty with respect to its
applicability to investment income, counsel will not render an opinion with
respect to whether Platinum Bermuda will have a permanent establishment in the
U.S. or whether the Bermuda treaty protects investment income not attributable
to a U.S. permanent establishment from U.S. taxation. Further, Platinum Bermuda
will not be entitled to the benefits of the Bermuda treaty unless:

- more than 50% of Platinum Bermuda's stock is beneficially owned,
directly or indirectly, by Bermuda residents or U.S. citizens or
residents, and

- Platinum Bermuda's income is not used in substantial part to make
disproportionate distributions to, or to meet certain liabilities
to, persons who are not Bermuda residents or U.S. citizens or
residents.

Under the current income tax treaty between the United Kingdom and the
U.S., Platinum UK, if entitled to the benefits of the current U.K. treaty, will
not be subject to United States income tax on any income found to be effectively
connected with a U.S. trade or business unless that trade or business is
conducted through a permanent establishment in the U.S. Because of the factual
nature of, and the lack of definitive parameters for determining the existence
of, a permanent establishment, counsel will not render an opinion with respect
to whether Platinum UK will have a permanent establishment in the U.S.

The U.S. and the United Kingdom have signed a new income tax treaty
which is not yet in force. As with the current U.K. treaty, under the provisions
of the new U.K. treaty, Platinum UK, if entitled to the benefits of the new U.K.
treaty, will not be subject to United States income tax on any income found to
be effectively connected with a U.S. trade or business unless that trade or

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business is conducted through a permanent establishment in the U.S. Platinum UK
will be entitled to the benefits of the new U.K. treaty if:

- During at least half of the days during the relevant taxable
period, at least 50% of Platinum UK's stock is beneficially owned,
directly or indirectly, by citizens or residents of the U.S. and
the U.K., and Platinum UK's income is not used in substantial part
to make certain payments, or to meet certain liabilities to,
persons who are not U.S. or U.K. residents; or

- with respect to specific items of income, profit or gain derived
from the U.S., if such income, profit or gain is considered to be
derived in connection with, or incidental to, Platinum UK's
business conducted in the U.K.

The new U.K. treaty will enter into force upon the exchange of
instruments of ratification and will apply with respect to U.S. income taxes for
taxable periods beginning on or after the first day of January next following
the date on which the new U.K. treaty enters into force.

Under the income tax treaty between Ireland and the United States (the
"Irish Treaty"), Platinum Ireland is not subject to United States income tax on
any income determined to be effectively connected with a U.S. trade or business
unless that trade or business is conducted through a permanent establishment in
the U.S. Platinum Ireland will generally be entitled to the benefits of the
Irish treaty if at least 50 percent of the shares of Platinum Holdings, measured
by both vote and value, are owned by U.S. citizens or residents. Because of the
factual nature of, and the lack of definitive parameters for, determining the
existence of a permanent establishment, counsel will not render an opinion with
respect to whether Platinum Ireland will have a permanent establishment in the
U.S.

Foreign corporations not engaged in a trade or business in the U.S. are
nonetheless subject to U.S. withholding tax at a rate of 30% of the gross amount
of certain "fixed or determinable annual or periodical gains, profits and
income" derived from sources within the U.S. (such as dividends and certain
interest on investments), subject to reduction by applicable treaties. Dividends
paid by Platinum Finance to Platinum Ireland will be subject to withholding at a
rate of 5%, provided that Platinum Ireland is entitled to the benefits of the
Irish Treaty as described above and certain other requirements are met. If
Platinum Ireland is not entitled to the benefits of the Irish Treaty and/or
certain other requirements are not met, dividends paid by Platinum Finance to
Platinum Ireland will be subject to withholding at a rate of 30%.

The U.S. also imposes an excise tax on insurance and reinsurance
premiums paid to foreign insurers or reinsurers with respect to risks located in
the U.S. The rate of tax applicable to premiums paid to Platinum Bermuda is 1%
for reinsurance premiums. The excise tax does not apply to premiums paid to
Platinum UK, provided that Platinum UK is entitled to the benefits of the
current UK Treaty (or to the benefits of the new UK Treaty once that treaty
comes into force), both as described above, and certain other requirements are
met.

Platinum Finance and Platinum US are U.S. corporations and will be
subject to taxation in the U.S. at regular corporate rates.

THE UNITED KINGDOM

Platinum UK is a U.K. resident company which will be subject to
corporation tax in the United Kingdom on its worldwide profits. The current rate
of U.K. taxation applicable to U.K. resident corporations is generally 30%.
Currently, no U.K. withholding tax applies to dividends paid by Platinum UK.

IRELAND

Under relevant case law and practice a company is resident in Ireland
for tax purposes if its central management and control is, as a matter of fact,
located in Ireland. It is assumed, for the

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purposes of the material under this heading, that Platinum Ireland will be
resident in Ireland for tax purposes.

Platinum Ireland will be subject to Irish corporate tax on its
worldwide income. Dividends received by it from Platinum Finance and Platinum UK
will be subject to Irish corporate tax (at the current applicable rate of 25%)
subject to any available relief under the double tax treaties Ireland has with
the United States and the United Kingdom.

Platinum Ireland will generally be entitled to the benefits of the
Irish Treaty if at least 50% of the shares of Platinum Holdings, measured by
both vote and value, are owned by US citizens or residents. Assuming that
Platinum Ireland is entitled to the benefits of the Irish Treaty in respect of
dividends from Platinum Finance, it would be entitled to a credit against Irish
corporation tax on the dividends for US tax imposed on the profits out of which
the dividends are declared. Alternatively, relief for US tax may be available
under Irish domestic law.

Assuming that Platinum Ireland is entitled to the benefits of the tax
treaty between Ireland and the United Kingdom in respect of dividends received
from Platinum UK it would be entitled to a credit against Irish corporation tax
on the dividends for UK tax imposed on the profits out of which the dividends
are declared.

Platinum Ireland will be subject to Irish corporate tax on any trading
income at a rate of 16% which will be reduced to 12.5% as of January 1, 2003.

Platinum Ireland will be exempt from the Irish capital duty of 1% (on
the value of share capital issued by it) because it is a unlimited liability
company.

TAXATION OF SHAREHOLDERS

BERMUDA TAXATION

Currently, there is no Bermuda withholding tax on dividends paid by us
or Platinum Bermuda.

UNITED STATES TAXATION OF U.S. AND NON-U.S. SHAREHOLDERS

UNITED STATES SHAREHOLDERS

GENERAL. The following discussion is the opinion of Sullivan &
Cromwell, our U.S. tax counsel, as to the material U.S. federal income tax
consequences relating to the acquisition, ownership and disposition of Common
Shares if you are a beneficial owner of Common Shares and you are:

- a citizen or resident of the U.S.;

- a domestic corporation;

- an estate whose income is subject to U.S. federal income tax
regardless of its source; or

- a trust if a U.S. court can exercise primary supervision over the
trust's administration and one or more U.S. persons are authorized
to control all substantial decisions of the trust.

This discussion applies to you only if you purchase your Common Shares in this
offering and hold your Common Shares as capital assets. This discussion does not
deal with the tax consequences applicable to all categories of investors, some
of which (such as broker-dealers, investors who hold Common Shares as part of
hedging or conversion transactions and investors whose functional currency is
not the U.S. dollar) may be subject to special rules. Prospective investors are
advised to consult their own tax advisers with respect to their particular
circumstances and with respect to the effects of U.S. federal, state, local or
other laws to which they may be subject.

DIVIDENDS. Distributions with respect to your Common Shares will be
treated as ordinary dividend income to the extent of the Company's current or
accumulated earnings and profits as determined for U.S. federal income tax
purposes, subject to the discussion below relating to the potential application
of the "controlled foreign corporation", "related person insurance income", or

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"passive foreign investment company" rules. Such dividends will not be eligible
for the dividends-received deduction allowed to U.S. corporations under the
Code. The amount of any distribution in excess of our current and accumulated
earnings and profits will first be applied to reduce your tax basis in the
Common Shares, and any amount in excess of tax basis will be treated as gain
from the sale or exchange of your Common Shares.

CLASSIFICATION OF PLATINUM HOLDINGS, PLATINUM UK, PLATINUM BERMUDA OR
PLATINUM IRELAND AS A CONTROLLED FOREIGN CORPORATION. Each "United States
shareholder" of a foreign corporation that is a "controlled foreign corporation"
("CFC") for an uninterrupted period of 30 days or more during a taxable year,
and who owns shares in the CFC directly or indirectly through foreign entities
on the last day of the CFC's taxable year must include in its gross income for
U.S. federal income tax purposes its pro rata share of the CFC's "subpart F
income", even if the subpart F income is not distributed. If Platinum Holdings,
Platinum Bermuda, Platinum Ireland and/or Platinum UK is deemed to be a CFC,
substantially all of Platinum Holdings' income and that of each of Platinum
Bermuda and Platinum Ireland will be subpart F income. Any U.S. corporation,
citizen, resident or other U.S. person who owns, directly or indirectly through
foreign persons, or is considered to own (by application of the rules of
constructive ownership set forth in Code section 958(b), applying to family
members, partnerships, estates, trusts or controlled corporations or holders of
certain options, including for these purposes, holders of our equity security
units) 10% or more of the total combined voting power of all classes of stock of
the foreign corporation will be considered to be a "United States shareholder".
A foreign insurance company such as Platinum UK or Platinum Bermuda is treated
as a CFC (other than for purposes of related person insurance income, as
described below) only if its "United States shareholders" collectively own more
than 25% of the total combined voting power or total value of the corporation's
stock. Because of the limitations on concentration of voting power of our Common
Shares, the dispersion of our share ownership among holders other than St. Paul
and its subsidiaries, the provisions for directed voting on matters requiring
action by the shareholders of Platinum Bermuda, Platinum UK and Platinum
Ireland, including the election of members of the board of directors, and the
restrictions on transfer, issuance or repurchase of Common Shares, you should
not be subject to treatment as a United States shareholder of a CFC. However,
these prophylactic provisions have not been tested in court and it is possible
that they could be challenged by the Internal Revenue Service and found to be
ineffective in preventing CFC status from arising. Because our bye-laws provide
that no single shareholder (including St. Paul) is permitted to hold as much as
10% of the total combined voting power of Platinum Holdings, shareholders of
Platinum Holdings should not be viewed as United States shareholders of a CFC
for purposes of these rules. Again, there can be no assurance that these
ownership limitations will be effective. Assuming they are effective, however,
neither the indirect foreign tax credit nor the intercompany dividends received
deduction attributable to U.S. source income will be available to U.S. corporate
holders of the Common Shares who, absent such provision, would qualify therefor.

RPII COMPANIES. Different definitions of "United States shareholder"
and "controlled foreign corporation" are applicable in the case of a foreign
corporation which earns "related person insurance income" ("RPII"). RPII is
defined in Code section 953(c)(2) as any "insurance income" attributable to
policies of insurance or reinsurance with respect to which the person (directly
or indirectly) insured is a "United States shareholder" or a "related person" to
such a shareholder. In general, and subject to certain limitations, "insurance
income" is income (including premium and investment income) attributable to the
issuing of any insurance or reinsurance contract in connection with risks
located in a country other than the country under the laws of which the
controlled foreign corporation is created or organized and which would be taxed
under the portions of the Code relating to insurance companies if the income
were the income of a domestic insurance company.

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The term "related person" for this purpose means someone who controls
or is controlled by the United States shareholder or someone who is controlled
by the same person or persons which control the United States shareholder.
"Control" is measured by either more than 50% in value or more than 50% in
voting power of stock, applying constructive ownership principles similar to the
rules of section 958 of the Code. A corporation's pension plan is ordinarily not
a "related person" with respect to the corporation unless the pension plan owns,
directly or indirectly through the application of constructive ownership rules
similar to those contained in section 958, more than 50%, measured by vote or
value, of the stock of the corporation. For purposes of inclusion of Platinum
UK's or Platinum Bermuda's RPII in the income of United States shareholders,
unless an exception applies, the term "United States shareholder" includes all
U.S. persons who own, directly or indirectly, any amount (rather than 10% or
more) of Platinum UK's or Platinum Bermuda's stock. Platinum UK or Platinum
Bermuda will be treated as a controlled foreign corporation for RPII purposes if
such persons collectively own directly, indirectly or constructively 25% or more
of the stock of Platinum UK or Platinum Bermuda by vote or value. St. Paul will
actually own approximately 15% (and will, after applying the constructive
ownership rules of the Code, own no more than 24.9%) of the Common Shares of
Platinum Holdings upon completion of the Public Offering. Accordingly, unless an
exception applies, it is likely that Platinum UK and Platinum Bermuda will each
be treated as a CFC for purposes of the RPII rules.

RPII EXCEPTIONS. The special RPII rules do not apply if:

- direct or indirect insureds and persons related to such insureds,
whether or not U.S. persons, are treated at all times during the
taxable year as owning less than 20% of the voting power and less
than 20% of the value of the stock of Platinum UK or Platinum
Bermuda, as applicable,

- RPII, determined on a gross basis, is less than 20% of Platinum
UK's or Platinum Bermuda's gross insurance income for the taxable
year, as applicable,

- Platinum UK or Platinum Bermuda elects to be taxed on its RPII as
if the RPII were effectively connected with the conduct of a
United States trade or business and to waive all treaty benefits
with respect to RPII and meets certain other requirements, or

- Platinum UK or Platinum Bermuda elects to be treated as a United
States corporation.

Platinum UK and Platinum Bermuda have not and do not intend to make
either of the elections described above. Additionally, as subsidiaries of St.
Paul and RenaissanceRe may be reinsured by Platinum UK and/or Platinum Bermuda,
persons related to insureds may indirectly own more than 20% of the value of the
stock of Platinum UK and Platinum Bermuda. Thus, only the second exception may
be available.

Where none of these exceptions applies, each U.S. person who owns
directly or indirectly shares in Platinum Holdings (and therefore, indirectly in
Platinum UK and Platinum Bermuda) at the end of any taxable year, will be
required to include in its gross income for United States federal income tax
purposes its share of RPII of Platinum UK and/or Platinum Bermuda for the entire
taxable year. This inclusion will be determined as if such RPII were distributed
proportionately only to such United States shareholders holding Common Shares at
the end of the taxable year. The inclusion will be limited to the current-year
earnings and profits of Platinum UK or Platinum Bermuda, as applicable, reduced
by the shareholder's pro rata share, if any, of certain prior-year deficits in
earnings and profits.

COMPUTATION OF RPII. In order to determine how much RPII each of
Platinum UK and Platinum Bermuda has earned in each taxable year, we will obtain
and rely upon information from Platinum UK's and Platinum Bermuda's insureds and
reinsureds to determine whether any of the insureds, reinsureds or other persons
related to such insureds or reinsureds own our shares and

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are U.S. persons. Each year, each of Platinum UK and Platinum Bermuda will send
a letter after the most recent taxable year to each person who was a
policyholder to represent whether it was a United States shareholder of the
Company or related to a United States shareholder during the year. For any
taxable year in which Platinum UK's or Platinum Bermuda's gross RPII is 20% or
more of its gross insurance income for the year, we may also seek information
from our shareholders as to whether direct or indirect owners of our shares at
the end of the year are U.S. persons so that the RPII may be determined and
apportioned among such persons. To the extent we are unable to determine whether
a direct or indirect owner of shares is a U.S. person, we may assume that such
owner is not a U.S. person, thereby increasing the per share RPII amount for all
United States shareholders.

APPORTIONMENT OF RPII TO UNITED STATES SHAREHOLDERS. If Platinum UK's
or Platinum Bermuda's RPII for any future taxable year is 20% or more of its
gross insurance income, every U.S. person directly or indirectly owning Common
Shares on the last day of that year will be required to include in gross income
its share of Platinum UK's or Platinum Bermuda's RPII for such year, whether or
not distributed. A U.S. person owning Common Shares during our taxable year but
not on the last day of the taxable year for which Platinum Bermuda and/or
Platinum UK is a controlled foreign corporation within the meaning of the RPII
provisions of the Code, which would normally be December 31, is not required to
include in gross income any part of Platinum UK's or Platinum Bermuda's RPII.
Correspondingly, a U.S. person directly or indirectly owning Common Shares on
the last day of the taxable year in which Platinum UK or Platinum Bermuda is a
controlled foreign corporation for purposes of these provisions is required to
include in its income its pro rata share of the RPII for the entire year, even
though it did not own the Common Shares for the entire year.

INFORMATION REPORTING. Each U.S. person who is a direct or indirect
shareholder of Platinum Holdings on the last day of our taxable year must attach
to the income tax or information return it would normally file for the period
which includes that date a Form 5471 if Platinum UK or Platinum Bermuda is a CFC
for RPII purposes for any continuous thirty-day period during its taxable year,
whether or not any net RPII income is required to be reported. Platinum UK or
Platinum Bermuda, as the case may be, will not be considered to be a CFC for
this purpose and, therefore, Form 5471 will not be required, for any taxable
year in which Platinum UK's or Platinum Bermuda's gross RPII constitutes less
than 20% of its gross insurance income. For any year in which Platinum UK's or
Platinum Bermuda's gross RPII constitutes 20% or more of its gross insurance
income, we intend to provide Form 5471 to our direct or indirect United States
shareholders for attachment to the returns of such shareholders. The amounts of
the RPII inclusions may be subject to adjustment based upon subsequent IRS
examination. A tax-exempt organization will be required to attach Form 5471 to
its information return in the circumstances described above. Failure to file
Form 5471 may result in penalties. In addition, U.S. persons who at any time
acquire 10% or more of our shares will have an independent obligation to file
Form 5471.

TAX-EXEMPT SHAREHOLDERS. Tax-exempt entities will be required to treat
certain subpart F insurance income, including RPII, that is includible in income
by the tax-exempt entity as unrelated business taxable income.

DISTRIBUTIONS; BASIS; EXCLUSION OF DISTRIBUTIONS FROM GROSS INCOME. A
United States shareholder's tax basis in its Common Shares will be increased by
the amount of any RPII that the shareholder includes in income. The shareholder
may exclude from income the amount of any distribution by us to the extent of
the RPII included in income for the year in which the distribution was paid or
for any prior year. The United States shareholder's tax basis in its Common
Shares will be reduced by the amount of such distributions that are excluded
from income. While, in certain circumstances, a United States shareholder may be
able to exclude from income distributions with respect to RPII that a prior
shareholder included in income, that exclusion will not generally be

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available to holders who purchase Common Shares in this offering or in the
public trading markets and are therefore unable to identify the previous
shareholder and demonstrate that such shareholder had previously included the
RPII in income.

DISPOSITIONS OF COMMON SHARES. Subject to the discussion below
relating to the potential application of Code section 1248 or the passive
foreign investment company rules, you will recognize a gain or loss for United
States federal income tax purposes upon the sale or exchange of any Common
Shares equal to the difference between the amount realized upon such sale or
exchange and your basis in the Common Shares. If your holding period for these
Common Shares is more than one year, any gain will be subject to tax at a
current maximum marginal tax rate of 20% (18% if your holding period is more
than five years) for individuals and 35% for corporations.

Code section 1248 provides that if a U.S. person disposes of stock in a
foreign corporation and such person owned directly, indirectly through certain
foreign entities or constructively 10% or more of the voting shares of the
corporation at any time during the five-year period ending on the date of
disposition when the corporation was a CFC, any gain from the sale or exchange
of the shares may be treated as ordinary income to the extent of the CFC's
earnings and profits during the period that the shareholder held the shares
(with certain adjustments). A 10% United States shareholder may in certain
circumstances be required to report a disposition of shares of a CFC by
attaching IRS Form 5471 to the United States income tax or information return
that it would normally file for the taxable year in which the disposition
occurs. Code section 953(c)(7) generally provides that section 1248 also will
apply to the sale or exchange of shares in a foreign corporation if the foreign
corporation would be taxed as an insurance company if it were a domestic
corporation, regardless of whether the shareholder is a 10% shareholder or
whether RPII constitutes 20% or more of the corporation's gross insurance
income. Existing Treasury regulations do not address whether Code section 1248
and the requirement to file Form 5471 would apply if the foreign corporation is
not a CFC but the foreign corporation has a subsidiary that is a CFC or that
would be taxed as an insurance company if it were a domestic corporation
(although, as discussed above, shareholders of 10% or more of the shares of the
Company will have an independent obligation to file Form 5471 in respect of the
taxable year in which they reach the 10% threshold). Code section 1248 and the
requirement to file Form 5471 should not apply to dispositions of Common Shares
because (i) we should not have any U.S. shareholders that own directly,
indirectly or constructively 10% or more of the voting power of the Common
Shares, and (ii) we are not directly engaged in the insurance business and,
under proposed regulations, Code sections 953 and 1248 appear to be applicable
only in the case of shares of corporations that are directly engaged in the
insurance business. However, the IRS might interpret the proposed regulations in
a different manner and the proposed regulations may be amended or promulgated in
final form so as to provide that Code section 1248 and the requirement to file
Form 5471 will apply to dispositions of Common Shares.

FOREIGN TAX CREDIT. If U.S. persons own a majority of the Company's
shares, only a portion of the current income inclusions under the CFC, RPII and
passive foreign investment company rules, if any, and of dividends paid by us
(including any gain from the sale of Common Shares that is treated as a dividend
under section 1248 of the Code) will be treated as foreign source income for
purposes of computing a shareholder's U.S. foreign tax credit limitation.

UNCERTAINTY AS TO APPLICATION OF RPII. Regulations interpreting the
RPII provisions of the Code exist only in proposed form. It is not certain
whether these regulations will be adopted in their proposed form or what changes
might ultimately be made or whether any such changes, as well as any
interpretation or application of the RPII rules by the IRS, the courts or
otherwise, might have retroactive effect. Accordingly, the meaning of the RPII
provisions and their application to Platinum UK and Platinum Bermuda is
uncertain. These provisions include the grant of authority to the U.S. Treasury
to prescribe "such regulations as may be necessary to carry out the purposes of
this subsection, including ... regulations preventing the avoidance of this
subsection through cross

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insurance arrangements or otherwise". In addition, there can be no assurance
that the IRS will not challenge any determinations by Platinum UK or Platinum
Bermuda as to the amount, if any, of RPII that should be includible in your
income or that the amounts of the RPII inclusions will not be subject to
adjustment based upon subsequent IRS examination. Each U.S. person considering
an investment in Common Shares should consult its tax advisor as to the effects
of these uncertainties.

PASSIVE FOREIGN INVESTMENT COMPANIES. Sections 1291 through 1298 of
the Code contain special rules applicable to foreign corporations that are
"passive foreign investment companies" ("PFICs"). In general, a foreign
corporation will be a PFIC during a given year if:

- 75% or more of its income constitutes "passive income" or

- 50% or more of its assets produce passive income.

If we were to be characterized as a PFIC during a given year, our
United States shareholders would be subject to a penalty tax at the time of
their sale at a gain of, or receipt of an "excess distribution" with respect to,
their Common Shares, unless such shareholders elected to be taxed on their pro
rata share of our earnings whether or not such earnings were distributed or
elected to be taxed on the investment in Common Shares on a mark-to-market
basis. In general, a shareholder receives an "excess distribution" if the amount
of the distribution is more than 125% of the average distribution with respect
to the stock during the three preceding taxable years (or shorter period during
which the taxpayer held the stock). In general, the penalty tax is equivalent to
an interest charge on taxes that are deemed due during the period the United
States shareholder owned the shares, computed by assuming that the excess
distribution or gain (in the case of a sale) with respect to the shares was
taxed in equal portions at the highest applicable tax rate on ordinary income
throughout the shareholder's period of ownership. The interest charge is equal
to the applicable rate imposed on underpayments of United States federal income
tax for such period.

For the above purposes, passive income is defined to include income of
the kind which would be foreign personal holding company income under Code
section 954(c), and generally includes interest, dividends, annuities and other
investment income. The PFIC statutory provisions, however, contain an express
exception for income "derived in the active conduct of an insurance business by
a corporation which is predominantly engaged in an insurance business...".

This exception is intended to ensure that income derived by a bona fide
insurance company is not treated as passive income, except to the extent such
income is attributable to financial reserves in excess of the reasonable needs
of the insurance business. We expect, for purposes of the PFIC rules, that each
of Platinum UK and Platinum Bermuda will be predominantly engaged in an
insurance business and is unlikely to have financial reserves in excess of the
reasonable needs of its insurance business. The PFIC statutory provisions
contain a look-through rule stating that, for purposes of determining whether a
foreign corporation is a PFIC, such foreign corporation shall be treated as if
it received "directly its proportionate share of the income..." and as if it
"held its proportionate share of the assets..." of any other corporation in
which it owns at least 25% by value of the stock. While no explicit guidance is
provided by the statutory language, under this look-through rule we should be
deemed to own the assets and to have received the income of our insurance
subsidiaries directly for purposes of determining whether we qualify for the
insurance exception. This interpretation of the look-through rule is consistent
with the legislative intention generally to exclude bona fide insurance
companies from the application of PFIC provisions; there can, of course, be no
assurance as to what positions the IRS or a court might take in the future. Each
U.S. person considering an investment in Common Shares should consult its tax
advisor as to the effects of the PFIC rules.

OTHER. Except as discussed below with respect to backup withholding,
dividends paid by us will not be subject to U.S. withholding tax.

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TRANSFER REPORTING REQUIREMENTS

A U.S. person (including a tax exempt entity) that purchases our Common
Shares in the Public Offering may be required to file a Form 926 or similar form
with the IRS if the cost of such purchases, including the cost of certain
related purchases and purchases by related persons, exceeds $100,000. In the
event such person fails to file any such required form, such person could be
required to pay a penalty equal to 10% of the gross amount paid for such Common
Shares (subject to a maximum penalty of $100,000, except in cases involving
intentional disregard). U.S. persons should consult their tax advisors with
respect to this or any other reporting requirement which may apply with respect
to their acquisition of our Common Shares.

NON-U.S. SHAREHOLDERS

Subject to certain exceptions, non-U.S. persons will be subject to
United States federal income tax on dividend distributions with respect to, and
gain realized from the sale or exchange of, Common Shares only if such dividends
or gains are effectively connected with the conduct of a trade or business
within the U.S. Nonresident alien individuals will not be subject to U.S. estate
tax with respect to our Common Shares.

ALL SHAREHOLDERS

Information reporting to the IRS by paying agents and custodians
located in the United States will be required with respect to payments of
dividends on the Common Shares to U.S. persons. Thus, you may be subject to
backup withholding with respect to dividends paid by such persons, unless you:

- are a corporation or come within certain other exempt categories
and, when required, demonstrate this fact, or

- provide a taxpayer identification number, certify as to no loss of
exemption from backup withholding and otherwise comply with
applicable requirements of the backup withholding rules.

Backup withholding is not an additional tax and may be credited against
your regular federal income tax liability.

PROPOSED U.S. TAX LEGISLATION

Recently proposed U.S. legislation targeting so-called "inversion
transactions", if enacted, would under certain circumstances treat a foreign
corporation as a U.S. corporation for U.S. federal income tax purposes and under
other circumstances would require obtaining IRS approval of the terms of
related-party transactions. In addition, interest deductions on debt borrowed
from or guaranteed by a related non-U.S. party would be more severely limited
than under existing so-called "earnings stripping" provisions.

The Company and its subsidiaries would appear not to be subject to the
proposed legislation directed at inversion transactions as currently drafted.
However, the proposed changes to the earnings stripping provisions could impose
significant restrictions on the amount of interest deductible by the Company's
U.S. subsidiaries on certain debt owed to or guaranteed by related non-U.S.
parties (including the surplus note to be issued by Platinum US to Platinum
Ireland and the senior notes to be issued by Platinum Finance and guaranteed by
the Company). We cannot predict whether the proposed legislation (or any similar
legislation) will be enacted or, if enacted, what the specific provisions or the
effective date of any such legislation would be, or whether it would have any
effect on the Company or its subsidiaries.

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If the inversion legislation were enacted and made applicable to the
Company and its subsidiaries, we could be treated as a U.S. corporation. If we
were treated as a U.S. corporation, we would be subject to taxation in the U.S.
at regular corporate rates. The U.S. tax consequences to the U.S. and non-U.S.
holders of Common Shares would be significantly different from those described
in the preceding sections. If the inversion legislation were to so apply,
however, the earnings stripping provisions would, if also enacted, be
inapplicable to the extent the non-U.S. related-party lender or guarantor was
treated as a U.S. corporation under the inversion legislation. Prospective
investors should consult their tax advisors regarding the U.S. tax consequences
to them, in their particular circumstances, if we were treated as a U.S.
corporation.

UNITED KINGDOM TAXATION

The following discussion applies only to U.K. resident individuals and
U.K. resident companies who beneficially own shares in Platinum Holdings and who
hold those shares as capital assets and not as dealers.

Such individuals will be liable to tax on dividends received, at a rate
of 10% for those shareholders who are subject to tax only at the basic rate, and
32.5% for those shareholders who are liable to tax at the higher rate of tax.
Individual shareholders who while resident in the U.K. are non-U.K. domiciled
will be chargeable to tax in respect of dividends only if and to the extent that
the dividends are remitted to or enjoyed in the United Kingdom in any way.

Individual shareholders are potentially liable to capital gains tax in
respect of chargeable gains arising on any disposal of their shares. Once again,
resident shareholders who are non-U.K. domiciled will be chargeable to capital
gains tax on a disposal of their shares only as regards remittances made to the
United Kingdom of the proceeds.

For U.K. inheritance tax purposes, the shares of Platinum Holdings will
rank as non-U.K. assets which may have a bearing on the imposition of
inheritance tax in relation to gifts or the passing of the shares on death,
particularly where the donor or deceased was non-U.K. domiciled.

U.K. companies will be liable to corporation tax at the ordinary rate
in relation to dividends received on the shares and gains arising on the
disposal of the shares.

Were a U.K. company ever to hold shares that carried the entitlement
(aggregated with shares held by certain connected persons) to at least 25% of
the profits of Platinum, the U.K.'s Controlled Foreign Companies provisions
could be material, with the result that in certain circumstances underlying
profits of Platinum and its subsidiaries might be taxed in the hands of the U.K.
shareholder.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING
ANY FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF OWNERSHIP AND
DISPOSITION OF THE COMMON SHARES WHICH ARE PARTICULAR TO THEM.

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UNDERWRITING

Platinum Holdings and the underwriters named below (the "underwriters")
have entered into an underwriting agreement with respect to the Common Shares
being offered. Subject to certain conditions, each underwriter has severally
agreed to purchase the number of Common Shares indicated in the following table.
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
Salomon Smith Barney Inc. are acting as joint book-running managers of this
offering and, together with Banc of America Securities LLC, Credit Suisse First
Boston Corporation, and J.P. Morgan Securities Inc., are acting as the
representatives of the underwriters.

[Enlarge/Download Table]

Underwriters Number of Common Shares
------------ -----------------------

Goldman, Sachs & Co............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Salomon Smith Barney Inc.......................................
Banc of America Securities LLC.................................
Credit Suisse First Boston Corporation.........................
J.P. Morgan Securities Inc.....................................
------------
Total...................................................... 30,040,000
============

The underwriters are committed to take and pay for all of the Common
Shares being offered, if any are taken, other than the Common Shares covered by
the option described below unless and until this option is exercised.

The completion of the Public Offering is conditioned upon the
consummation of the concurrent ESU Offering.

If the underwriters sell more Common Shares than the total number set
forth in the table above, the underwriters have an option to buy up to an
additional 4,506,000 Common Shares from Platinum Holdings to cover such sales.
They may exercise that option for 30 days. If any Common Shares are purchased
pursuant to this option, the underwriters will severally purchase Common Shares
in approximately the same proportion as set forth in the table above.

The following table shows the per Common Share and total underwriting
discounts and commissions to be paid to the underwriters by Platinum Holdings.
Such amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase 4,506,000 additional Common Shares.

[Download Table]

Paid by Platinum Holdings No Exercise Full Exercise
------------------------- ----------- -------------

Per Share............................................ $ $
Total................................................ $ $

Common Shares sold by the underwriters to the public will initially be
offered at the initial public offering price set forth on the cover of this
prospectus. Any Common Shares sold by the underwriters to securities dealers may
be sold at a discount of up to $ per Common Share from the initial public
offering price. Any such securities dealers may resell any Common Shares
purchased from the underwriters to certain other brokers or dealers at a
discount of up to $ per Common Share from the initial public offering
price. If all the Common Shares are not sold at the initial public offering
price, the representatives may change the offering price and the other selling
terms.

Platinum Holdings, its officers and directors, St. Paul and
RenaissanceRe have agreed with the underwriters not to offer, sell, contract to
sell, pledge, grant any option to purchase, hedge, make any short sale or
otherwise dispose of any of their Common Shares or equity security units
(including purchase contracts and senior notes) or any securities of the Company
that are

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substantially similar to Common Shares or equity security units (including
purchase contracts and senior notes) or any options or warrants to purchase any
Common Shares or equity security units (including purchase contracts and senior
notes) or securities convertible into or exchangeable for or that represent the
right to receive Common Shares or equity security units (including purchase
contracts and senior notes) (other than the equity security units to be offered
and sold concurrently with this offering and the securities to be offered and
sold in the St. Paul Investment and the RenaissanceRe Investment) during the
period from the date of this prospectus continuing through the date 180 days
after the date of this prospectus, except with the prior written consent of
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
Salomon Smith Barney Inc. This agreement does not apply to any existing employee
benefit plans. See "Shares Eligible For Future Sale" for a discussion of certain
transfer restrictions.

Prior to the Public Offering, there has been no public market for the
Common Shares. The initial public offering price will be negotiated among
Platinum Holdings and the representatives of the underwriters. Among the factors
to be considered in determining the initial public offering price of the Common
Shares, in addition to prevailing market conditions, will be Platinum Holdings'
pro forma performance, estimates of the business potential and earnings
prospects of Platinum Holdings, an assessment of Platinum Holdings' management
and the consideration of the above factors in relation to market valuation of
companies in related businesses.

The Common Shares have been approved for listing on the NYSE under the
symbol "PTP" subject to notice of issuance. In order to meet one of the
requirements for listing the Common Shares on the NYSE, the underwriters have
undertaken to sell lots of 100 or more Common Shares to a minimum of 2,000
beneficial holders.

In connection with the Public Offering, the underwriters may purchase
and sell Common Shares in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of Common Shares than they are required to purchase in the Public
Offering. "Covered" short sales are sales made in an amount not greater than the
underwriters' option to purchase additional Common Shares from Platinum Holdings
in the Public Offering. The underwriters may close out any covered short
position by either exercising their option to purchase additional Common Shares
or purchasing Common Shares in the open market. In determining the source of
Common Shares to close out the covered short position, the underwriters will
consider, among other things, the price of Common Shares available for purchase
in the open market as compared to the price at which they may purchase such
Common Shares through their option to purchase additional Common Shares from
Platinum Holdings. "Naked" short sales are any sales in excess of such option.
The underwriters must close out any naked short position by purchasing Common
Shares in the open market. A naked short position is more likely to be created
if the underwriters are concerned that there may be downward pressure on the
price of the Common Shares in the open market after pricing that could adversely
affect investors who purchase in the offering. Stabilizing transactions consist
of various bids for or purchases of Common Shares made by the underwriters in
the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased Common
Shares sold by or for the account of such underwriter in stabilizing or short
covering transactions.

Purchases to cover a short position and stabilizing transactions may
have the effect of preventing or retarding a decline in the market price of the
Common Shares, and together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the Common Shares.
As a result, the price of the Common Shares may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be

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discontinued at any time. These transactions may be effected on the NYSE, in the
over-the-counter market or otherwise.

Each underwriter has represented, warranted and agreed that: (i) it has
not offered or sold and, prior to the expiry of a period of six months from the
closing of the Public Offering, will not offer or sell any Common Shares to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or sale of
any Common Shares in circumstances in which section 21(1) of the FSMA does not
apply to Platinum Holdings; and (iii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Common Shares in, from or otherwise involving the United
Kingdom.

The Common Shares may not be offered, sold, transferred or delivered in
or from The Netherlands, as part of their initial distribution or as part of any
re-offering, and neither this prospectus nor any other document in respect of
the offering may be distributed or circulated in The Netherlands, other than to
individuals or legal entities which include, but are not limited to, banks,
brokers, dealers, institutional investors and undertakings with a treasury
department, who or which trade or invest in securities in the conduct of a
business or profession.

A prospectus in electronic format will be made available on the
websites maintained by one or more of the lead managers of this offering and may
also be made available on websites maintained by other underwriters. The
underwriters may agree to allocate a number of Common Shares to underwriters for
sale to their online brokerage account holders. Internet distributions will be
allocated by the lead managers to underwriters that may make Internet
distributions on the same basis as other allocations.

Platinum Holdings has agreed to indemnify the several underwriters
against certain liabilities, including liabilities under the 1933 Act.

The underwriters do not expect sales to discretionary accounts to
exceed five percent of the total number of Common Shares offered.

Platinum Holdings estimates that its share of the total expenses for
the Public Offering, excluding underwriting discounts and commissions, will be
approximately $3.5 million.

Several of the underwriters and their affiliates have provided from
time to time, and expect to provide in the future, investment and commercial
banking and financial advisory services to Platinum Holdings, Platinum Finance,
St. Paul and their respective affiliates in the ordinary course of business, for
which they have received and may continue to receive customary fees and
commissions. The joint book-running managers, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, and Salomon Smith Barney Inc., are
currently acting as the joint book- running managers of the concurrent ESU
Offering.

To a limited extent, St. Paul has agreed to pay certain indemnification
obligations of Platinum to the underwriters if Platinum fails to pay in
specified circumstances.

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VALIDITY OF COMMON SHARES

The validity of the Common Shares under Bermuda law will be passed upon
for the Company by Conyers, Dill & Pearman, Hamilton, Bermuda. Certain legal
matters in connection with the Public Offering will be passed upon for the
Company by Sullivan & Cromwell, New York, New York, and the Underwriters are
being advised as to certain matters by Fried, Frank, Harris, Shriver & Jacobson
(a partnership including professional corporations), New York, New York, in each
case in reliance on the opinions of Conyers, Dill & Pearman with respect to
Bermuda law. Sullivan & Cromwell is also advising St. Paul, the sponsor of the
Company, in connection with the Company's establishment. Furthermore, the
Company is being advised as to certain matters in connection with its
organization and the Public Offering by Sullivan & Cromwell. Dewey Ballantine
LLP has advised Platinum regarding certain matters, including agreements between
Platinum and St. Paul.

EXPERTS

The consolidated balance sheet of Platinum Underwriters Holdings, Ltd.
and the combined statements of identifiable underwriting assets and liabilities,
underwriting results, identifiable underwriting cash flows and combined
financial statement schedules of The St. Paul Companies, Inc. Reinsurance
Underwriting Segment (Predecessor) included in the Registration Statement have
been audited by KPMG LLP, independent auditors, as set forth in their reports
appearing herein. The statements and combined financial statement schedules
referred to above are included in reliance upon such reports of KPMG LLP, given
upon the authority of such firm as experts in accounting and auditing. The audit
report covering Predecessor's December 31, 2001, 2000 and 1999 combined
statements contains an explanatory paragraph that states that the combined
statements are not intended to be a complete presentation of Predecessor's or
St. Paul's financial position, results of operations, or cash flows.

AVAILABLE INFORMATION

Upon completion of the offering, we will file annual, quarterly and
current reports, proxy statements and other information with the SEC. You may
read and copy any documents filed by us at the SEC's public reference room at
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our SEC
filings will also be available over the internet at the SEC's website at
http://www.sec.gov. We intend to list the Common Shares on the NYSE. Upon
listing, periodic reports, proxy statements and other information concerning
Platinum Holdings will be available for review at the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. After the completion of the
Public Offering, we expect to provide annual reports to our shareholders that
include financial information reported on by our independent public accountants
and quarterly reports containing unaudited interim financial information for the
first three fiscal quarters of each fiscal year.

We have filed a registration statement on Form S-1 with the SEC (File
No. 333-86906) relating to the Public Offering. This prospectus is a part of the
registration statement and does not contain all of the information in the
registration statement. Whenever a reference is made in this prospectus to one
of our contracts or other documents, please be aware that the reference is not
necessarily complete and that you should refer to the exhibits that are a part
of the registration statement for a copy of the contract or other document. You
may review a copy of the registration statement at the SEC's public reference
room in Washington, D.C. as well as through the SEC's internet site.

We also have filed a registration statement on Form S-1 with the SEC
(File Nos. 333-99019 and 333-99019-01) relating to the ESU Offering. You also
may review a copy of that registration statement at the SEC's public reference
room in Washington, D.C. as well as through the SEC's internet site.

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ENFORCEABILITY OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES
LAWS AND OTHER MATTERS

Platinum Holdings is a Bermuda company, and certain of its officers and
directors are or will be residents of various jurisdictions outside the United
States. A substantial portion of the assets of Platinum Holdings and of such
officers and directors, at any one time, are or may be located in jurisdictions
outside the United States. In particular, Platinum Bermuda is also a Bermuda
corporation. Therefore, it ordinarily could be difficult for investors to effect
service of process within the United States on Platinum Holdings or any of these
officers and directors who reside outside the United States or to recover
against Platinum Holdings or any such individuals on judgments of courts in the
United States, including judgments predicated upon civil liability under the
U.S. federal securities laws. Notwithstanding the foregoing, Platinum Holdings
has irrevocably agreed that it may be served with process with respect to
actions against us arising out of violations of the U.S. federal securities laws
in any federal or state court in the U.S. relating to the transactions covered
by this prospectus by serving CT Corporation System, 1633 Broadway, 30th Fl.,
New York, New York 10019, telephone (800) 624-0909, its United States agent
appointed for that purpose. Nevertheless, it may be difficult for you to effect
service of process within the United States upon Platinum Holdings' directors,
officers and experts who reside outside the United States or to enforce in the
United States judgments of U.S. courts obtained in actions against Platinum
Holdings or its directors and officers, as well as the experts named in this
document, who reside outside the United States. Platinum Holdings has been
advised by Conyers, Dill & Pearman, its Bermuda counsel, that there is doubt as
to whether the courts of Bermuda would enforce (1) judgments of United States
courts obtained in actions against such persons or Platinum Holdings predicated
upon the civil liability provisions of the United States federal securities laws
and (2) original actions brought in Bermuda against such persons or Platinum
Holdings predicated solely upon United States federal securities laws. There is
no treaty in effect between the United States and Bermuda providing for such
enforcement, and there are grounds upon which Bermuda courts may not enforce
judgments of United States courts. Certain remedies available under the laws of
U.S. jurisdictions, including certain remedies available under the U.S. federal
securities laws, would not be allowed in Bermuda courts as contrary to Bermuda's
public policy.

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THE PREDECESSOR BUSINESS

We present below selected historical combined financial data of St.
Paul Re. Our pro forma underwriting results presented under "Management's
Discussion and Analysis of Pro Forma Financial Condition and Underwriting
Results" in this prospectus show that our 2001 net premiums written, as adjusted
for the business not transferred and the exclusion of the St. Paul corporate
aggregate excess-of-loss reinsurance program, represent approximately 82% of St.
Paul Re's net premiums written for the same period. Also, we are assuming no
premium or loss development on business entered into prior to January 1, 2002.
Accordingly, we caution that St. Paul Re's underwriting results and St. Paul
Re's combined statements presented in this prospectus are not indicative of the
actual results that we will achieve once we commence operations. For a detailed
discussion of our pro forma combined statements of underwriting results, see
"Pro Forma Financial Information".

In addition to the effect of the non-transfer of certain portions of
St. Paul Re's business to us and the exclusion of the St. Paul corporate
aggregate excess-of-loss reinsurance program, other factors may cause our actual
results to differ materially from St. Paul Re's results. For example, although
we continue to be afforded the benefits of St. Paul Re's retrocessional program
for the remainder of 2002, we may enter into reinsurance contracts with
significantly different terms and conditions from those that have been made
available to St. Paul Re from St. Paul and which form the basis of St. Paul Re's
results. Furthermore, the additional premiums recorded in 2001 by St. Paul Re's
finite risk business primarily associated with the September 11, 2001 terrorist
attack were exceedingly high and not necessarily indicative of the recurring
premium volume we expect to write in that business segment. In addition, St.
Paul Re's combined statements reflect the discounting of the liability for
certain assumed reinsurance contracts using rates up to 7.5%, based on its
return on invested assets or, in many cases, on yields contractually guaranteed
to it on funds held by the ceding company, as permitted by the state of domicile
of a company included in St. Paul Re. It is our current intention to make
arrangements to permit such discounting to a similar extent as St. Paul Re,
which may include the organization and licensing of a U.S. subsidiary in
addition to Platinum U.S. If arrangements permitting us to discount reserves to
the same extent as St. Paul Re are not made, reinsurance contracts of a similar
type entered into in the future would be reported on an undiscounted basis.

As further discussed in the Notes under "Pro Forma Combined Statements
of Underwriting Results for the six months ended June 30, 2002 and 2001, and the
year ended December 31, 2001", the following table illustrates the difference
between Platinum's pro forma financial information and St. Paul Re's for the
year ended December 31, 2001.

[Download Table]

YEAR ENDED DECEMBER 31, 2001
--------------------------------
HISTORICAL
ST. PAUL RE PRO FORMA PLATINUM
----------- ------------------
($ IN MILLIONS)

NET PREMIUMS EARNED............................... $ 1,593 $ 1,302
UNDERWRITING LOSSES AND EXPENSES
Losses and loss adjustment expenses............. 1,922 1,440
Underwriting expenses........................... 397 306
------- -------
Total underwriting losses and expenses........ 2,319 1,746
------- -------
UNDERWRITING GAIN (LOSS).......................... $ (726) $ (444)
======= =======

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SELECTED COMBINED FINANCIAL DATA

FIVE-YEAR SUMMARY OF ST. PAUL RE SELECTED COMBINED FINANCIAL DATA

[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30,
----------------
2002 2001 2001 2000 1999 1998 1997
------- ------- -------- -------- ------- -------- --------
($ IN MILLIONS)

Net premiums written......................... $ 663 $ 701 $ 1,677 $ 1,073 $ 913 $ 1,017 $ 1,155
Net premiums earned.......................... 682 600 1,593 1,121 878 1,003 1,198
Losses and loss adjustment expenses.......... 460 426 1,922 811 500 658 819
Underwriting expenses........................ 213 230 397 424 302 341 379
----- ------ ------- ------- ------ ------- -------
Underwriting gain(loss)...................... $ 9 $ (56) $ (726) $ (114) $ 76 $ 4 $ --
===== ====== ======= ======= ====== ======= =======
Statutory combined ratio:
Loss and loss expense ratio................ 67.4% 71.0% 120.6% 72.3% 57.0% 65.6% 68.4%
Underwriting expense ratio................. 29.2% 36.5% 25.1% 39.7% 35.1% 33.3% 31.1%
----- ------ ------- ------- ------ ------- -------
Combined ratio............................. 96.6% 107.5% 145.7% 112.0% 92.1% 98.9% 99.5%
===== ====== ======= ======= ====== ======= =======
Adjusted combined ratio*................... 93.1% 116.2% 117.6% 120.4% 109.2% 98.9% 99.5%
===== ====== ======= ======= ====== ======= =======
Impact of catastrophes on combined ratio** (1.5)% 2.7% 40.4% 12.0% 16.3% 8.6% 0.3%
===== ====== ======= ======= ====== ======= =======

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

* For purposes of meaningful comparison, adjusted combined ratios in 1999
- 2001 exclude the impact of the reinsurance treaties described in Note
8 to the combined statements, and in 2001, the impact of the September
11, 2001 terrorist attack.

** Excludes ceded losses under the St. Paul corporate aggregate
excess-of-loss reinsurance program and St. Paul Re's aggregate
excess-of-loss treaties.

RECENT DEVELOPMENTS

As discussed below, St. Paul Re was not affected by catastrophes in the
first six months of 2002. However, in August 2002, heavy rains and flooding
caused substantial loss of life and property in parts of Europe. Based on
preliminary information available to it, and applying customary actuarial
techniques applicable to catastrophe events, St. Paul Re has incurred estimated
losses of $ million in respect of this event as of September 30, 2002. St.
Paul Re and after the completion of the Public Offering, Platinum, will revise
this estimated if additional information suggests that such action is
appropriate. Total catastrophe losses to date in 2002 have been lower than
management's expectations.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
UNDERWRITING RESULTS OF THE PREDECESSOR BUSINESS

The following discussion and analysis pertains to the operating results
of the Reinsurance underwriting segment of St. Paul, for the years ended
December 31, 2001, 2000 and 1999, and for the six-month periods ended June 30,
2002 and 2001. This discussion and analysis should be read in conjunction with
St. Paul Re's combined statements and related notes found on pages F-14 to F-36,
because they contain important information that is helpful in evaluating St.
Paul Re's operating results and financial condition.

St. Paul Re's operations include the underwriting results of certain
insurance and reinsurance subsidiaries in St. Paul's group of companies, as well
as the underwriting results of the reinsurance departments of St. Paul Fire and
Marine Insurance Company, and United States Fidelity and Guaranty Company
("USF&G"), St. Paul's two largest U.S. insurance subsidiaries. The financial
results reported herein for St. Paul Re reconcile to St. Paul's reinsurance
segment results reported in St. Paul's audited consolidated financial statements
for each year in the three-year period ended December 31, 2001, which are
included in St. Paul's 2001 Annual Report to Shareholders, and in St. Paul's
June 30, 2002 Quarterly Report on Form 10-Q (unaudited).

It is the practice of St. Paul to evaluate the performance of its
property-casualty insurance underwriting segments on the basis of underwriting
results. Therefore, this discussion focuses on each segment's performance based
on underwriting results. St. Paul does not allocate assets or investment income
to its respective underwriting segments, and therefore, neither assets nor
surplus are specifically identifiable for St. Paul Re. As a result, the
following discussion and analysis focuses almost exclusively on those factors
influencing underwriting performance for each of St. Paul Re's four business
segments. Those segments, whose results are analyzed in more detail later in
this discussion, are as follows: North American Casualty, North American
Property, International, and Finite Risk.

In the years prior to 2002, St. Paul Re generally underwrote
traditional treaty and facultative reinsurance for property, casualty, ocean
marine, surety, accident and health and certain specialty classes of coverage
for leading property and casualty insurance companies worldwide. St. Paul Re
also underwrote certain types of "non-traditional" reinsurance, which provides
limited traditional underwriting risk combined with financial risk protection.
In late 2001, St. Paul announced a series of actions designed to improve its
profitability, including plans to narrow the product offering and geographic
presence of its reinsurance operations. As a result, in January 2002, St. Paul
Re began focusing almost exclusively on the following types of reinsurance
coverages: property catastrophe, excess-of-loss casualty, marine and traditional
finite.

CRITICAL ACCOUNTING POLICIES

St. Paul Re's significant accounting policies are described in the
notes to St. Paul's Reinsurance Underwriting Segment (Predecessor)'s Combined
Statements. The following is a summary of the critical accounting policies that
affected the components comprising St. Paul Re's underwriting performance:
premiums, reserves and reinsurance.

PREMIUMS

Premiums were recorded at the inception of each policy, based upon
information received from ceding companies and their brokers. For excess-of-loss
contracts, the amount of premium was usually contractually documented at
inception, and no management judgment was necessary in accounting for this.
Premiums were earned on a pro rata basis over the contract period. For
proportional treaties, the amount of premium was normally estimated at inception
by the ceding company. St. Paul Re accounted for such premium using the initial
estimates, and then adjusted

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them once a sufficient period for actual premium reporting had elapsed, normally
around three years. For the year ended December 31, 2001 the net amount of
premium written resulting from estimate accruals was less than 25% of total
premiums written. St. Paul Re also accrued for reinstatement premiums resulting
from losses. Such accruals were based upon actual contractual terms, and the
only element of management judgment involved was with respect to the amount of
loss reserves, as described below.

RESERVES

Under U.S. GAAP, St. Paul Re was not permitted to establish loss
reserves until the occurrence of an event which may give rise to a loss. Once
such an event occurred, St. Paul Re established reserves based upon estimates of
total losses incurred by the ceding insurers as a result of the event and St.
Paul Re's estimate of the portion of such loss it has reinsured. As a result,
only loss reserves applicable to losses incurred up to the reporting date may be
set aside, with no allowance for the provision of a contingency reserve to
account for expected future losses. Losses arising from future events will be
estimated and recognized at the time the loss is incurred and could be
substantial.

Setting appropriate reserves is an inherently uncertain process. Loss
reserves represent St. Paul Re's estimates, at a given point in time, of
ultimate settlement and adjustment costs of losses incurred (including IBNR
losses). St. Paul Re regularly reviewed and updated these estimates, using the
most current information available. Consequently, the ultimate liability for a
loss was likely to differ from the original estimate. Whenever St. Paul Re
determined that any existing loss reserves were inadequate, St. Paul Re was
required to record such change in estimate; increasing the loss reserves with a
corresponding negative impact, which could be material, in St. Paul Re's
underwriting results in the period in which the deficiency was identified. The
establishment of new reserves, or the adjustment of reserves for reported
claims, could result in significant upward or downward changes to St. Paul Re's
financial condition or results of underwriting in any particular period.

The reserve for losses and loss adjustment expenses was based upon
reports, individual case estimates received from ceding companies, and
management's estimates. St. Paul Re management's estimates were used mostly to
estimate IBNR loss amounts. For certain catastrophic events, there was
considerable uncertainty underlying the assumptions and associated estimated
reserves for losses and loss adjustment expenses. Reserves were reviewed
regularly and, as experience developed and additional information became known,
the reserves were adjusted as necessary. Such changes in estimate, if necessary,
were reflected in results of operations in the current period.

Liabilities for unpaid losses and LAE related to certain assumed
reinsurance contracts are discounted to the present value of estimated future
payments. The liabilities related to these reinsurance contracts were discounted
based on our return on invested assets, or in many cases, on yields
contractually guaranteed to us on funds held by the ceding company, as
permitted.

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REINSURANCE

Written premiums, earned premiums, and incurred losses and LAE
reflected the net effects of assumed and ceded reinsurance transactions.
Reinsurance accounting was followed for assumed and ceded transactions when risk
transfer requirements had been met. These requirements involved significant
assumptions being made related to the amount and timing of expected cash flows,
as well as the interpretation of underlying contract terms. Assumed reinsurance
contracts that did not transfer significant insurance risk were required to be
accounted for as deposits. These deposits were accounted for as financing
transactions, with interest expense credited to the contract deposit. Premiums
received on retroactive reinsurance contracts are not reflected in the statement
of operations, but rather are recorded in the combined statement of identifiable
underwriting assets and liabilities as an increase to loss and loss adjustment
expenses reserves for the liabilities assumed and as assets based on the
consideration received. A deferred charge or credit is recorded for any
difference between liabilities assumed and consideration received.

CONSOLIDATED OVERVIEW

The following table summarizes St. Paul Re's results for the periods
presented.

[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------- --------------------------
2002 2001 2001 2000 1999
---- ---- ---- ---- ----
($ IN MILLIONS)

NET PREMIUMS EARNED
Net premiums written ................... $663 $ 701 $1,677 $1,073 $913
Change in unearned premiums ........... 19 (101) (84) 48 (35)
---- ----- ------ ------ ----
Net premiums earned .................. 682 600 1,593 1,121 878

LOSSES AND UNDERWRITING EXPENSES
Losses and loss adjustment expenses..... 460 426 1,922 811 500
Policy acquisition expenses ............ 178 188 315 336 220
Other underwriting expenses ........... 35 42 82 88 82
---- ----- ------ ------ ----
Total losses and underwriting expenses.. 673 656 2,319 1,235 802
---- ----- ------ ------ ----
Underwriting gain (loss) ............. $ 9 $ (56) $ (726) $ (114) $ 76
==== ===== ====== ====== ====

SIX MONTHS ENDED JUNE 30, 2002 VS. SIX MONTHS ENDED JUNE 30, 2001

Net premiums written declined $38 million for the six months ended June
30, 2002 compared to the six months ended June 30, 2001. The decrease in net
premiums written in 2002 was primarily due to the reduced volume from the lines
of business targeted for exit as part of St. Paul's strategic initiative to
improve profitability. In addition, the rescission of a large quota share
contract in the second quarter of 2002 also contributed to the decrease in
volume. The premium decline was partially offset by new business written in the
accident and health line of business and by rate increases. Reinsurance rates
continued to increase in 2002, primarily in response to the terrorist attack in
the United States in September 2001. Rate increases on business renewed on
January 1, 2002 averaged approximately 29% across all business segments.

The $65 million improvement in underwriting results reflected the
impact of substantial rate increases on 2002 renewals, as well as favorable
prior year development on catastrophe losses, absence of current year
catastrophe losses and benefits derived from exiting unprofitable lines of
business.

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YEAR ENDED DECEMBER 31, 2001 VS. YEAR ENDED DECEMBER 31, 2000

The 56% increase in net written premiums in 2001 was principally driven
by new business growth in the North American Casualty and North American
Property segments, additional premiums recorded for prior underwriting years in
the North American Casualty segment, and strong price increases in all segments.
Price increases continued throughout 2001 in response to the growing demand for
reinsurance coverages, and those increases accelerated during the fourth quarter
in the aftermath of the September 11, 2001 terrorist attack. In 2000, net
premium growth was driven by new business opportunities in the non-traditional
reinsurance market and price increases across virtually all lines of traditional
reinsurance coverage.

Underwriting results in 2001 were dominated by losses resulting from
the terrorist attack, which totaled $556 million. Excluding those losses,
underwriting results in 2001 were still significantly worse than in 2000, with
deterioration centered in the North American Casualty and Finite Risk segments.
Catastrophe losses (excluding the September 11, 2001 terrorist attack) totaled
$92 million in 2001, driven by losses from the explosion of a chemical plant in
Toulouse, France and Tropical Storm Allison in the United States. Catastrophe
losses in 2000 totaled $135 million and were primarily the result of additional
loss development from European storms occurring near the end of 1999.

The deterioration in 2000 underwriting results compared with 1999 was
due to significant adverse loss development from years prior to 2000, including
development from the European storms at the end of 1999. Adverse prior-year loss
development on retrocessional business written in St. Paul Re's London
operations also played a significant role in 2000's underwriting loss. In
addition, the North American treaty casualty business accounted for $131 million
of underwriting losses in 2000.

RETROCESSIONAL REINSURANCE

St. Paul Re's underwriting results for 2001, 2000 and 1999 reflect the
benefits of its retrocessional reinsurance program. Under this program, St. Paul
Re purchases reinsurance for its own benefit, to limit the effect on its
financial condition and operating results of large and multiple losses. Under
this program, St. Paul Re ceded the following amounts to reinsurers:

[Download Table]

SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
------------- --------------------
2002 2001 2001 2000 1999
---- ---- ---- ---- ----
($ IN MILLIONS)

Net premiums written ................ $ 39 $102 $177 $254 $318

Net premiums earned ................. 29 94 172 260 314
Losses and loss adjustment expenses.. (28) 144 396 386 377
Underwriting expenses ............... 4 6 14 13 30
---- ---- ----
Net underwriting benefit .......... $(53) $ 56 $238 $138 $ 93
==== ==== ==== ==== ====

Included in the above totals were the impacts of the St. Paul corporate
aggregate excess-of-loss reinsurance programs that were entered into effective
on January 1 of each year except 2002 and St. Paul Re's aggregate
excess-of-loss-treaty, a separate aggregate excess-of-loss treaty exclusive to
St. Paul Re. St. Paul chose not to have a corporate aggregate excess-of-loss
reinsurance program in place in 2002. Coverage under the St. Paul corporate
aggregate excess-of-loss reinsurance programs was triggered when incurred
insurance losses and loss adjustment expenses spanning all segments of St.
Paul's business exceeded accident year attachment loss ratios specified in the
treaty. In addition, St. Paul Re's results benefited from St. Paul Re's
aggregate excess-of-loss-treaty in each year. These treaties are collectively
referred to hereafter as the "reinsurance treaties".

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The following table describes the combined impact of these cessions
under the reinsurance treaties on St. Paul Re's results.

[Enlarge/Download Table]

SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
------------ ----------------------
2002 2001 2001 2000 1999
---- ---- ---- ---- ----
($ IN MILLIONS)

ST. PAUL CORPORATE AGGREGATE EXCESS-OF-LOSS REINSURANCE
PROGRAM:
Ceded premiums written .............................. $ -- $ 2 $ (67) $ 80 $ 89
Ceded losses and loss adjustment expenses ........... -- -- (126) 140 164
Ceded earned premiums ............................... -- 1 (67) 80 89
---- ---- ----- ---- ----
Net pretax benefit (detriment) .................... -- (1) (59) 60 75
---- ---- ----- ---- ----

ST. PAUL RE'S AGGREGATE EXCESS-OF-LOSS TREATIES:
Ceded premiums written .............................. 5 45 119 55 62
Ceded losses and adjustment expenses ................ (25) 102 278 122 150
Ceded earned premiums ............................... (3) 43 119 55 62
---- ---- ----- ---- ----
Net pretax benefit (detriment) .................... (22) 59 159 67 88
---- ---- ----- ---- ----

COMBINED TOTAL:
Ceded premiums written .............................. 5 47 52 135 151
Ceded losses and loss adjustment expenses ........... (25) 102 152 262 314
Ceded earned premiums ............................... (3) 44 52 135 151
---- ---- ----- ---- ----
Net pretax benefit (detriment) .................... $(22) $ 58 $ 100 $127 $163
==== ==== ===== ==== ====

St. Paul was not party to a corporate all-lines aggregate
excess-of-loss treaty in 2002. In 2001, St. Paul did not cede any losses to the
St. Paul corporate aggregate excess-of-loss reinsurance program, but did
reallocate benefits from its 2000 and 1999 treaties among its business segments,
resulting in a detriment to St. Paul Re's reported results for calendar year
2001. This reallocation was necessary to reflect the impact of differences
between St. Paul's actual 2001 experience on losses ceded to the St. Paul
corporate aggregate excess-of-loss reinsurance program in 2000 and 1999, by
segment, and the anticipated experience on those losses in 2000 and 1999, when
the initial segment allocation was made. The impact of the 2000 and 1999 St.
Paul corporate aggregate excess-of-loss reinsurance program was allocated to St.
Paul Re based on St. Paul Re's underwriting results relative to the underwriting
results of St. Paul's other underwriting segments.

Net underwriting detriment in the 2002 six-month period was driven by a
commutation of a certain portion of the St. Paul Re aggregate excess-of-loss
treaty. The commutation of this treaty resulted in a net loss of $14 million.
This was done in conjunction with the commutation of similar assumed reinsurance
treaties which resulted in a net gain of $10 million. The combined effect of
these commutations resulted in a net loss of $4 million.

The combined net pretax benefit (detriment) of the reinsurance treaties
was allocated to St. Paul Re's business segments as follows:

[Download Table]

SIX MONTHS
ENDED YEAR ENDED DECEMBER
JUNE 30, 31,
------------- --------------------
2002 2001 2001 2000 1999
---- ---- ---- ---- ----
($ IN MILLIONS)

North American Casualty .. $ (6) $ 4 $ 13 $ 42 $ 28
North American Property .. (3) 35 40 49 60
International ............ (4) 16 30 36 51
Finite Risk .............. (9) 3 17 0 24
---- ---- ---- ---- ----
Total .................... $(22) $ 58 $100 $127 $163
==== ==== ==== ==== ====

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SEPTEMBER 11, 2001 TERRORIST ATTACK

On September 11, 2001, terrorists hijacked four commercial passenger
jets in the United States. Two of the jets were flown into the World Trade
Center towers in New York, N.Y., causing their collapse. The third jet was flown
into the Pentagon building in Washington, D.C., causing severe damage, and the
fourth jet crashed in rural Pennsylvania. This terrorist attack caused
significant loss of life and resulted in unprecedented losses for the property
and casualty insurance industry. St. Paul Re's estimated net pretax loss
incurred as a result of the terrorist attack totaled $556 million in 2001,
distributed among business segments as follows:

[Download Table]

YEAR ENDED
DECEMBER 31, 2001
-----------------
($ IN MILLIONS)

North American Property .. $233
North American Casualty .. 32
International ............ 162
Finite Risk .............. 129
----
Total ................ $556
====

St. Paul Re continually evaluated the adequacy of the net loss
provision recorded, based on claim experience, collections from its reinsurers,
and other factors. In the first six months of 2002, St. Paul Re did not record
any additions or reductions to its original estimated loss provision recorded in
2001 for the terrorist attack. Through June 30, 2002, St. Paul Re had made net
loss payments totaling $110 million related to the attack since it occurred, of
which $107 million were made in the first six months of 2002.

For further information related to the terrorist attack, refer to the
Notes to The St. Paul Companies, Inc. Reinsurance Underwriting Segment
(Predecessor) Combined Statements beginning on page F-16 of this prospectus.

ELIMINATION OF ONE-QUARTER REPORTING LAG

In the first quarter of 2000, St. Paul Re eliminated the one-quarter
reporting lag for its reinsurance operations based in the United Kingdom ("St.
Paul Re-U.K.") in order to report the results of those operations on a current
basis. As a result, St. Paul Re's results for 2000 include St. Paul Re-U.K.'s
results for the fourth quarter of 1999 and all of 2000. The incremental impact
of eliminating the reporting lag, which consists of St. Paul Re-U.K.'s results
for the three months ended December 31, 2000, was as follows.

[Download Table]

YEAR ENDED
DECEMBER 31, 2000
-----------------
($ IN MILLIONS)

Net premiums written .... $ 7
Net premiums earned ..... 51
Underwriting loss ....... (10)

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UNDERWRITING RESULTS BY SEGMENT

The following table summarizes written premiums, underwriting results,
statutory combined ratios and adjusted combined ratios (as described in the
footnote to the table) for each of St. Paul Re's business segments for the last
three years. These segments are managed in a carefully coordinated fashion with
strong elements of centralized control. As a result, management monitors and
evaluates the financial performance of these segments principally based on their
underwriting results. Following the table are detailed analyses of each
segment's results.

[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
2002 2001 2001 2000 1999
------ ------ ------ ------ ------
($ IN MILLIONS)

NORTH AMERICAN CASUALTY
Net premiums written .......................... $ 228 $ 296 $ 667 $ 340 $ 262

Net premiums earned ........................... 271 261 588 319 245
Losses and loss adjustment expenses ........... 230 274 584 261 61
Underwriting expenses ......................... 91 96 219 134 109
------ ------ ------ ------ ------
Underwriting gain (loss) ...................... $ (50) $ (109) $ (215) $ (76) $ 75
====== ====== ====== ====== ======
Combined ratio ................................ 117.9% 141.4% 135.4% 124.9% 68.8%
Adjusted combined ratio* ...................... 115.3% 142.6% 131.5% 131.4% 82.2%

NORTH AMERICAN PROPERTY
Net premiums written .......................... $ 110 $ 75 $ 216 $ 170 $ 207

Net premiums earned ........................... 125 75 216 204 196
Losses and loss adjustment expenses ........... 74 36 381 133 153
Underwriting expenses ......................... 35 33 67 72 71
------ ------ ------ ------ ------
Underwriting gain (loss) ...................... $ 16 $ 6 $ (232) $ (1) $ (28)
====== ====== ====== ====== ======
Combined ratio ................................ 88.0% 92.8% 207.3% 104.6% 112.6%
Adjusted combined ratio* ..................... 85.1% 127.6% 116.9% 122.2% 134.8%

INTERNATIONAL
Net premiums written .......................... $ 174 $ 174 $ 248 $ 145 $ 160

Net premiums earned ........................... 120 108 242 188 160
Incurred losses and loss adjustment expenses .. 52 25 289 128 102
Underwriting expenses ......................... 28 30 62 70 79
------ ------ ------ ------ ------
Underwriting gain (loss) ...................... $ 40 $ 53 $ (109) $ (10) $ (21)
====== ====== ====== ====== ======
Combined ratio ................................ 62.5% 45.5% 143.8% 111.6% 114.0%
Adjusted combined ratio* ...................... 58.9% 64.0% 89.5% 125.0% 134.7%

FINITE RISK
Net premiums written .......................... $ 151 $ 156 $ 546 $ 418 $ 284

Net premiums earned ........................... 166 156 547 410 277
Incurred losses and loss adjustment expenses .. 104 91 668 289 184
Underwriting expenses ......................... 59 71 49 148 43
------ ------ ------ ------ ------
Underwriting gain (loss) ...................... $ 3 $ (6) $ (170) $ (27) $ 50
====== ====== ====== ====== ======
Combined ratio ................................ 97.8% 106.7% 131.6% 106.2% 85.8%
Adjusted combined ratio* ...................... 91.8% 108.3% 114.2% 106.2% 94.9%

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[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
2002 2001 2001 2000 1999
------ ------ ------ ------ ------
($ IN MILLIONS)

TOTAL
Net premiums written .......................... $ 663 $ 701 $1,677 $1,073 $ 913

Net premiums earned ........................... 682 600 1,593 1,121 878
Incurred losses and loss adjustment expenses .. 460 426 1,922 811 500
Underwriting expenses ......................... 213 230 397 424 302
------ ------ ------ ------ ------
Underwriting result ....................... $ 9 $ (56) $ (726) $ (114) $ 76
====== ====== ====== ====== ======
Loss and loss expense ratio .................. 67.4% 71.0% 120.6% 72.3% 57.0%
Underwriting expense ratio .................... 29.2% 36.5% 25.1% 39.7% 35.1%
------ ------ ------ ------ ------
Combined ratio ................................ 96.6% 107.5% 145.7% 112.0% 92.1%
====== ====== ====== ====== ======
Adjusted combined ratio* ...................... 93.1% 116.2% 117.6% 120.4% 109.2%

-----------------------------
* For purposes of meaningful comparison, adjusted combined ratios in all
periods presented exclude the impact of the reinsurance treaties
described before the table and the September 11, 2001 terrorist attack.

SIX MONTHS ENDED JUNE 30, 2002 VS. SIX MONTHS ENDED JUNE 30, 2001

Loss Ratio

The loss ratio measures insurance losses and loss adjustment expenses
incurred as a percentage of earned premiums.

St. Paul Re's reported loss ratio for the six months ended June 30, 2002 was
67.4%, compared with 71.0% in the same 2001 period. The 3.6 percentage point
improvement in the loss ratio was primarily due to rate increases across all
segments and the exit of unprofitable lines of business, tempered by
deteriorating results in discontinued lines of business (surplus lines, bond and
credit).

Expense Ratio

St. Paul Re's reported expense ratio for the six months ended June 30,
2002 was 29.2%, compared with 36.5% in the same period of 2001. The significant
improvement in the expense ratio was due to the exiting of unprofitable lines of
business.

YEAR ENDED DECEMBER 31, 2001 VS. YEARS ENDED DECEMBER 31, 2000 AND
DECEMBER 31, 1999

Loss Ratio

St. Paul Re's reported loss ratio in 2001 included a 42.6 percentage
point detriment from losses incurred in the terrorist attack. The reported loss
ratios in 2001, 2000 and 1999 also included benefits from the reinsurance
treaties.

Catastrophe losses totaled $880 million in 2001, of which $788 million
was due to the September 11, 2001 terrorist attack. Most of the other $92
million of catastrophe losses were the result of a variety of storms throughout
the year in the U.S. and the explosion of a chemical

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manufacturing plant in Toulouse, France. In 2000 and 1999, catastrophe losses
totaled $135 million and $143 million, respectively. Additional loss development
arising from severe windstorms that struck portions of Europe in late 1999 and
severe flooding in the United Kingdom drove the 2000 total. Major events
contributing to the 1999 total included Hurricane Floyd, earthquakes in Taiwan
and Turkey, and European windstorms.

Expense Ratio

St. Paul Re's reported expense ratio in 2001 included an 8.2 percentage
point benefit resulting from a $91 million reduction in contingent commissions
that had been accrued prior to September 11, 2001. The magnitude of losses from
the terrorist attack resulted in the reversal of that accrual. The reported
expense ratios in 2001, 2000 and 1999 included detriments from the reinsurance
treaties. No underwriting expenses were ceded under the treaties; however, the
expense ratios in all three years included the effects of written premiums ceded
under the treaties.

During 2000, St. Paul Re reduced its estimate of ultimate losses on
certain non-traditional reinsurance business by $56 million, and made a
corresponding increase in its estimate of reserves for contingent commissions by
$66 million. Although these changes in estimate did not have a significant
impact on underwriting results for the year, they did distort the components of
the combined ratio in 2000. Excluding these changes, the loss ratio would have
been 89.8%, and the expense ratio would have been 29.8% (both excluding the
benefits of the reinsurance treaties).

The following pages provide a more detailed discussion of results for
the years ended December 2001, 2000 and 1999 and for the three month and
six-month periods ended June 30, 2002 and 2001 produced by St. Paul Re's four
business segments. To provide a more meaningful analysis of the underlying
performance of St. Paul Re's business segments, the discussion of segment
results excludes the impact of the September 11, 2001 terrorist attack in 2001
and the reinsurance treaties in all three years. The impact of the terrorist
attack on individual segment results, and the impact of the reinsurance treaties
was discussed earlier in this prospectus.

NORTH AMERICAN CASUALTY

The North American Casualty segment consisted of casualty reinsurance
underwritten for customers with exposures in the United States and Canada. In
2001, the following types of casualty coverages were offered: general, workers'
compensation, auto, medical professional, non-medical professional, directors
and officers, employment practices, surplus lines, umbrella and environmental
impairment. This segment also included accident and health reinsurance
coverages. As discussed earlier in this prospectus, in 2002, St. Paul narrowed
its reinsurance product focus in an effort to improve profitability. As a
result, the North American Casualty segment offered the following coverages in
the first six months of 2002: general and automobile liability, professional
liability, workers' compensation, accident and health coverages and casualty
clash. The following

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table summarizes results for this segment for the periods presented, and
excludes the impact of the reinsurance treaties and the September 11, 2001
terrorist attack.

[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
2002 2001 2001 2000 1999
------ ------ ------ ------ ------
($ IN MILLIONS)

Net premiums written ............................ $ 233 $ 296 $ 679 $ 400 $ 288

Percentage increase (decrease) over prior year .. (21)% 70% 39%
Underwriting gain (loss) ........................ $ (44) $ (113) $ (195) $ (114) $ 47

Loss and loss adjustment expense ratio .......... 82.9% 106.2% 95.7% 94.6% 42.1%
Underwriting expense ratio ...................... 32.4% 36.4% 35.8% 36.8% 40.1%
------ ------ ------ ------ ------
Combined ratio .................................. 115.3% 142.6% 131.5% 131.4% 82.2%
====== ====== ====== ====== ======

SIX MONTHS ENDED JUNE 30, 2002 VS. SIX MONTHS ENDED JUNE 30, 2001

The $63 million decrease in net premiums written was primarily due to
the rescission of a large quota share contract in the second quarter of 2002.
The premium volume was also impacted by a decline in premiums resulting from
lines of business being exited. Rate increases averaged 29% in the first six
months of 2002, and new business written in the accident and health reinsurance
market served to partially offset the decline in premiums.

The $69 million reduction in underwriting losses compared with the six
months ended June 30, 2001 is attributable to improved rates and risk selection,
as well as less unfavorable development in casualty business written in prior
years.

2001 VS. 2000

A significant portion of the 70% increase in net written premium volume
over 2000 was due to additional premiums recorded on business from the
underwriting years 2000 and 1999. St. Paul Re had been conservative in recording
estimated premiums from ceding companies in a soft market environment, but as
rate increases began to accelerate faster than anticipated, it was determined
that estimated premiums to be received from cedents for the underwriting years
2000 and 1999 were under accrued. St. Paul Re recorded the increase in premium
from those years in 2001 as the revenue materialized. In addition, new business
from large quota share contracts accounted for approximately $65 million of
premium growth in 2001, and accident and health new business contributed
approximately $51 million to premium volume for the year.

The reported underwriting result in 2001 included losses from
underwriting years prior to 2001. These losses were centered in surplus lines
and first-dollar auto reinsurance coverages. The surplus lines losses primarily
resulted from higher than expected frequency of losses associated with program
business. In particular, the experience attributable to certain black car and
tow truck programs was worse than expected. In addition, competitive market
conditions in the earlier underwriting years contributed to a soft pricing
environment for surplus lines reinsurance in those years. The first-dollar auto
losses in 2001 were primarily the result of unfavorable emergence stemming from
the binders and professional indemnity book.

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2000 VS. 1999

The 39% increase in net premium volume in 2000 compared with 1999 was
largely driven by new business. In 2000, St. Paul Re entered the accident and
health market to take advantage of significant improvements in the medical stop
loss market. This business accounted for $33 million of written premiums in
2000. In addition, a large quota share treaty also contributed $45 million in
new premium volume in 2000. North American surplus lines casualty business
written by St. Paul Re's London operations increased by $23 million in 2000, due
to price increases and the withdrawal of other surplus lines underwriters in
London.

The reported underwriting loss for 2000 deteriorated significantly to
$114 million, compared with an underwriting profit of $47 million in 1999. In
2000, St. Paul Re started to experience an increase in claims reported from
underwriting years 1997 through 1999 which had not been evident in 1999.

NORTH AMERICAN PROPERTY

The North American Property segment consisted of property reinsurance
business underwritten for customers with exposures in the United States and
Canada. In 2001, coverages offered included proportional, per-risk,
excess-of-loss reinsurance and excess and surplus lines insurance, and
catastrophe treaties. This segment also included the results of retrocessional
reinsurance business, and crop and agricultural reinsurance. As discussed
earlier in this prospectus, in 2002, St. Paul narrowed its reinsurance product
focus in an effort to improve profitability. As a result, the North American
Property segment offered the following coverage in the first six months of 2002:
property catastrophe, property pro rata and property risk excess-of-loss. The
following table summarizes results for this segment for the periods presented,
and excludes the impact of the reinsurance treaties and the September 11, 2001
terrorist attack.

[Enlarge/Download Table]

SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
2002 2001 2001 2000 1999
------ ------ ------ ------ ------
($ IN MILLIONS)

Net premiums written ............................ $ 110 $ 107 $ 230 $ 218 $ 254

Percentage increase (decrease) over prior year .. 3% 6% (14)%
Underwriting gain (loss) ........................ $ 19 $ (29) $ (39) $ (51) $ (87)

Loss and loss adjustment expense ratio .......... 56.4% 96.0% 88.1% 91.6% 106.1%
Underwriting expense ratio ...................... 28.7% 31.6% 28.8% 30.6% 28.7%
------ ------ ------ ------ ------
Combined ratio .................................. 85.1% 127.6% 116.9% 122.2% 134.8%
====== ====== ====== ====== ======

SIX MONTHS ENDED JUNE 30, 2002 VS. SIX MONTHS ENDED JUNE 30, 2001

The $3 million increase in net premiums written was due to rate
increases that averaged 31% in the first six months of 2002, which more than
offset the significant decline in business volume resulting from St. Paul Re's
withdrawal from or reduction in several lines of business in this segment.

The improvement in underwriting results in 2002 reflected the impact of
exiting unprofitable lines of business, rate increases, a lack of significant
catastrophe losses and favorable development on prior year catastrophe losses.

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2001 VS. 2000

The 6% increase in premium volume in 2001 over 2000 was primarily due
to rate increases throughout this segment, the impact of which were
substantially offset by a deliberate reduction in business volume for crop
reinsurance and retrocessional reinsurance due to unfavorable treaty terms and
conditions. Price increases for risk excess-of-loss reinsurance grew
substantially as the year progressed, reflecting the impact of poor results on
prior treaties. Proportional premium volume grew nearly 40% over 2000, primarily
due to price increases.

The improvement in underwriting results compared with 2000 was
primarily due to a reduction in retrocessional reinsurance losses. St. Paul Re
began exiting unprofitable lines of the retrocessional market in 2000, and by
the end of 2001, underwrote a minimal amount of that business. Proportional
reinsurance coverages produced improved results over 2000, largely due to
favorable loss development on 1999 and prior underwriting years. These
improvements were partially offset by deterioration in North American
reinsurance results from business underwritten in London. In addition,
excess-of-loss reinsurance results in 2001 suffered from the effects of tropical
storm Allison, which struck the southeastern United States in the spring. Crop
reinsurance losses were significant in 2001, due to adverse loss development on
both 2001 and 2000 underwriting year business. Several hailstorms in the U.S.
played a major factor in the 2001 underwriting year losses. In addition, crop
reinsurance results in 2001 reflected the negative impact of competitive market
conditions in prior years that resulted in a soft pricing environment for this
business.

2000 VS. 1999

The 14% decline in net premium volume in 2000 compared with 1999
reflected an intentional reduction in business volume due to concerns about
underlying price levels, catastrophe exposures and unsatisfactory treaty terms.
Retrocessional net premiums declined approximately 27%, and proportional volume
was down 45% from 1999 levels. Near the end of 2000, some underlying price
improvement emerged due to the continuing deterioration in results for
reinsurers.

With the exception of catastrophe business, all lines of business
recorded unprofitable results in 2000. Excess-of-loss business showed
improvement over 1999, due to the lack of catastrophe losses and favorable
prior-year development. Proportional business results deteriorated from 1999,
due to loss development from the 1999 underwriting year. Per risk excess-of-loss
results were also worse than 1999. Crop reinsurance results in 2000 deteriorated
from 1999, and retrocessional business from the London market produced
significant losses despite a declining book of business.

INTERNATIONAL

In 2001, St. Paul Re's International segment underwrote property and
casualty reinsurance for customers domiciled outside of North America. This
segment also included results from marine and aerospace business for customers
located throughout the world, because of the global nature of those exposures.
As discussed earlier in this prospectus, in 2002, St. Paul narrowed its
reinsurance product focus in an effort to improve profitability. As a result,
the International segment offered the following coverages in the first six
months of 2002: property catastrophe, property pro rata, property risk
excess-of-loss and marine coverages. The following table summarizes results for
this segment for the periods presented, and excludes the impact of the
reinsurance treaties and the September 11, 2001 terrorist attack.

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SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
2002 2001 2001 2000 1999
------ ------ ------ ------ ------
($ IN MILLIONS)

Net premiums written ............................ $ 176 $ 184 $ 255 $ 176 $ 212

Percentage increase (decrease) over prior year .. (4)% 45% (17)%
Underwriting gain (loss) ........................ $ 44 $ 37 $ 24 $ (47) $ (73)

Loss and loss adjustment expense ratio .......... 39.6% 42.4% 65.8% 88.9% 96.5%
Underwriting expense ratio ...................... 19.3% 21.6% 23.7% 36.1% 38.2%
------ ------ ------ ------ ------
Combined ratio .................................. 58.9% 64.0% 89.5% 125.0% 134.7%
====== ====== ====== ====== ======

SIX MONTHS ENDED JUNE 30, 2002 VS. SIX MONTHS ENDED JUNE 30, 2001

The $8 million decrease in net premiums written in 2002 was due to St.
Paul Re's decision to exit the aviation market and close certain international
offices. Rate increases averaging 39% in the International segment partially
offset these declines.

The $7 million increase in underwriting gain was mainly attributable to
favorable development on prior year reserves across all lines. Also contributing
to the increase in underwriting gain is the absence of catastrophe losses in the
period and significant rate increases achieved in 2002.

2001 VS. 2000

The 45% increase in net premiums over 2000 reflected improving market
conditions in 2001, characterized by significant rate increases and increasingly
favorable terms and conditions on new and renewal business during the year. The
magnitude of year-over-year premium growth in 2001 was partially aided by St.
Paul Re's deliberate actions in 2000 to reduce premium volume in certain
underperforming lines of business, including proportional treaty business and
low-level per risk excess-of-loss business. Net premium growth in 2001 was
centered in property coverages, where rate increases averaged 33% for the year.
For marine coverages, rate increases averaged 20% in 2001.

During 2001, St. Paul Re sought to take advantage of market conditions
and realign its portfolio by further reducing underperforming business volume,
and expanding new business in virtually all of its remaining operations. The
significant improvement in the loss ratio compared with 2000 reflected the
success of those efforts, and also reflected a significant decline in
catastrophe losses. In 2001, the only major catastrophe affecting the
International segment (excluding the September 11, 2001 terrorist attack) was
the explosion of a chemical plant in Toulouse, France, which resulted in $13
million of incurred losses. By contrast, 2000 results included a cumulative
total of $34 million of catastrophe losses, the majority of which resulted from
additional loss development from severe windstorms that struck portions of
Europe in late 1999.

2000 VS. 1999

The 17% decline in 2000 net premiums written compared with 1999
resulted from St. Paul Re's deliberate reduction in pro rata property business
volume due to unacceptable underwriting conditions. In addition, St. Paul Re
changed the method it used to estimate reinsurance premiums in the International
segment for the 1999 underwriting year following St. Paul's merger with USF&G
Corporation in 1998 and the subsequent integration of F&G Re, the reinsurance
department of USF&G into St. Paul Re's operations. Throughout the majority of
2000, worldwide reinsurance

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market conditions remained unfavorable, and St. Paul Re maintained a cautious
approach to premium growth in the International arena. However, the spate of
large catastrophe losses which occurred in late 1999 and affected calendar year
2000 results proved to be the catalyst for an increase in property catastrophe
reinsurance pricing. In the last quarter of 2000, the soft market conditions
that had prevailed for several years began to improve, laying the groundwork for
significantly improved operating conditions in 2001.

Although 2000 was relatively free from major natural catastrophes,
adverse development from the aforementioned 1999 catastrophic events contributed
significantly to St. Paul Re's reported results in 2000. Of the $34 million of
catastrophe losses incurred in 2000, the only significant events that actually
occurred in 2000 were a series of storm and flood losses in the United Kingdom,
which resulted in losses of $13 million.

In 1999, market conditions were difficult due to excess capacity and
severe competition in the reinsurance sector. Overall pricing continued to be
inadequate as worldwide reinsurers competed for market share in a stagnant
worldwide non-life insurance market. St. Paul Re's International segment loss
ratio in 1999 suffered from a total of $63 million of catastrophe losses
resulting from earthquakes in Taiwan and Turkey, Typhoon Bart in Japan,
Hurricane Floyd, and the severe windstorms in Northern Europe.

FINITE RISK

In 2001, St. Paul Re's Finite Risk segment underwrote non-traditional
reinsurance treaties for leading insurance and reinsurance companies worldwide.
Non-traditional reinsurance combines limited traditional underwriting risk with
financial risk protection and is generally utilized by sophisticated insurers
who are willing to share in a portion of their insurance losses. Products
include multi-year excess-of-loss treaties, aggregate stop loss treaties, finite
quota share treaties, loss portfolio transfers, and adverse loss development
covers. This segment also included bond and credit reinsurance coverages. As
discussed earlier in this prospectus, in 2002, St. Paul narrowed its reinsurance
product focus in an effort to improve profitability. As a result, the Finite
Risk segment offered the following coverages in the first six months of 2002:
multi-year excess-of-loss, aggregate stop loss, finite quota share, loss
portfolio transfer and adverse loss development contracts. The following table
summarizes results for this segment for the periods presented, and excludes the
impact of the reinsurance treaties and the September 11, 2001 terrorist attack.

[Enlarge/Download Table]

SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
---------------- --------------------------
2002 2001 2001 2000 1999
------ ------ ------ ------ ------
($ IN MILLIONS)

Net premiums written ............................ $ 149 $ 161 $ 424 $ 418 $ 311

Percentage increase (decrease) over prior year .. (7)% 1% 34%

Underwriting gain (loss) ........................ $ 11 $ (10) $ (57) $ (28) $ 26
Loss and loss adjustment expense ratio .......... 56.8% 62.2% 80.7% 70.5% 77.3%
Underwriting expense ratio ...................... 35.0% 46.1% 33.5% 35.7% 17.6%
------ ------ ------ ------ ------
Combined ratio .................................. 91.8% 108.3% 114.2% 106.2% 94.9%
====== ====== ====== ====== ======

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SIX MONTHS ENDED JUNE 30, 2002 VS. SIX MONTHS ENDED JUNE 30, 2001

The $12 million decrease in net premiums written in the first six
months of 2002 was due to St. Paul Re's decision to exit the bond and credit
market; however, that decline was offset by a $25 million positive premium
adjustment related to one finite quota share contract.

The $11 million underwriting gain in the first six months of 2002
included a $10 million favorable impact due to a commutation of an aggregate
excess-of-loss treaty, offset by adverse prior-year marine and aviation loss
development, as well as adverse loss experience on the bond and credit business
in runoff. The $10 million loss in the 2001 period was primarily due to an $11
million loss related to the Petrobras oil platform collapse in March 2001.

2001 VS. 2000

Net written premiums grew slightly in 2001 over an abnormally large
premium base in 2000 that had resulted from three large new contracts and
additional premiums related to a specific contract. Bond and credit reinsurance
coverages accounted for $63 million of net written premium volume in 2001,
compared with $62 million in 2000.

The deterioration in underwriting results in 2001 was primarily due to
$31 million of losses generated by bond and credit reinsurance, of which $15
million resulted from surety bond losses related to Enron Corporation's
bankruptcy filing in late 2001. Bond and credit losses in 2000 totaled $2
million. In addition, the Finite Risk segment incurred $39 million of losses
from three major marine and aviation events: the collapse of the Petrobras oil
platform; a terrorist group's ground attack on commercial airliners in Sri
Lanka; and the chemical plant explosion in Toulouse, France.

2000 VS. 1999

Net written premiums in 2000 increased $107 million over 1999, of which
$67 million collectively resulted from the origination of two new loss portfolio
transfer contracts and one new finite quota share treaty. In addition, $47
million of additional written premiums were recognized on a specific aggregate
stop-loss contract due to adverse loss development.

Additional loss development from the severe storms that struck portions
of Europe in late 1999 accounted for $36 million of underwriting losses in 2000
in the Finite Risk segment. However, $52 million in underwriting profits were
recognized in 2000 from five large treaties that were either commuted or
experienced favorable loss development.

During 2000, the Finite Risk segment reduced its estimate of ultimate
losses on certain non-traditional reinsurance business by $56 million, and
correspondingly increased its estimate of profit commission reserves by $66
million. Excluding these changes, the loss ratio would have been 84.2%, and the
expense ratio would have been 19.6%.

CAPITAL RESOURCES AND LIQUIDITY

St. Paul Re's primary sources of capital resources and liquidity were
premium revenues received from its reinsurance business, and capital
contributions, when necessary, from St. Paul. As a component of St. Paul's
consolidated operations, St. Paul Re was dependent upon St. Paul to provide the
necessary capital to adequately support the level of its business operations.

EXPOSURES TO MARKET RISK

Market risk can be described as the risk of change in fair value of a
financial instrument due to changes in interest rates, equity prices,
creditworthiness, foreign exchange rates or other factors. As a component of St.
Paul's consolidated operations with no invested assets of its own, St. Paul Re

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had no direct exposure to these various types of market risk, except for the
potential impact of changes in foreign currency exchange rates on its insurance
reserves. St. Paul actively managed its exposure to such foreign currency risks
by purchasing investments denominated in foreign currencies to hedge insurance
reserves denominated in the same currencies, which effectively reduced its
foreign currency exchange rate exposure.

RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES FOR
PREDECESSOR BUSINESS

GENERAL INFORMATION

Losses represent the amounts paid, or expected to be paid, to ceding
companies for events that have occurred. The cost of investigating, resolving
and processing these claims are known as loss adjusting expenses, or LAE.
Reserves are established that reflect the estimated unpaid total cost of these
two items. These reserves include estimates of the total cost of claims that
were reported, but not yet paid, and the cost of claims incurred but not yet
reported or IBNR. The reserves for unpaid losses, and LAE at December 31, 2001
cover claims that were incurred not only in 2001 but also in prior years. Loss
reserves are reduced for estimates of salvage and subrogation.

Because many of the reinsurance coverages offered by St. Paul Re
involve losses that may not ultimately be settled for many years after they are
incurred, subjective adjustments as to ultimate exposure to losses are an
integral and necessary component of the loss reserving process. The inherent
uncertainties of estimating loss reserves are further exacerbated for reinsurers
by the significant times that often elapse between the occurrence of an insured
loss, the reporting of that loss to the primary insurer and, ultimately to the
reinsurer, and the primary insurers payment of that loss and subsequent
indemnification by the reinsurer. Reserves are recorded by considering a range
of estimates bounded by a high point and a low point. Within that range,
management's best estimate is recorded. Reserves are continually reviewed, using
various statistical and actuarial techniques to analyze current claim costs,
frequency and severity data, and prevailing economic, social and legal factors.
Reserves established in prior years are adjusted as loss experience develops and
new information becomes available. Adjustments to previously estimated reserves
are reflected in financial results in periods in which they are made.

While the carried reserves make a reasonable provision for unpaid loss
and LAE obligations, it should be noted that the process of estimating required
reserves does, by its very nature, involve uncertainty. The level of uncertainty
can be influenced by factors such as the existence of long-tail coverage (when
loss payments may occur for several years) and changes in claims handling
practices, as well as factors noted above, and actual claim payments and LAE
could be significantly different than estimates.

Liabilities for unpaid losses and LAE related to certain assumed
reinsurance contracts are discounted to the present value of estimated future
payments. Prior to discounting, these liabilities totaled $306.4 million, $198.7
million, and $72.7 million at December 31, 2001, 2000 and 1999 respectively. The
total discounted liability reflected on our combined statements of identifiable
underwriting assets and liabilities was $264.9 million, $146.7 million and $47.6
million at December 31, 2001, 2000 and 1999, respectively. During 2001, $33
million of discount was amortized and $85 million of additional discount was
accrued. The liabilities related to these reinsurance contracts were discounted
using rates up to 7.5%, based on our return on invested assets or, in many
cases, on yields contractually guaranteed to us on funds held by the ceding
company, as permitted by the state of domicile, the Vermont Department of
Banking, Insurance, Securities and Healthcare Administration.

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TEN-YEAR DEVELOPMENT

The table below presents a development of net loss and LAE reserve
liabilities and payments for the years 1992 through 2001. The top line on the
table shows the estimated liability for unpaid losses and LAE, net of
reinsurance recoverables, recorded at the balance sheet date for each of the
years indicated.

In 1997, St. Paul changed the method by which it assigned loss activity
to a particular year for assumed reinsurance written by our U.K.-based
reinsurance operation, a component of St. Paul Re. Prior to 1997, that loss
activity was assigned to the year in which the underlying reinsurance contract
was written. In 1997, our analysis indicated that an excess amount of loss
activity was being assigned to prior years because of this practice. As a
result, we implemented an improved procedure in 1997 that more accurately
assigns loss activity for this business to the year in which it occurred. This
change had the impact of increasing favorable development on previously
established reserves by approximately $110 million in 1997. There was no net
impact on total incurred losses, however, because there was a corresponding
increase in the provision for current year loss activity in 1997. Development
data for individual years prior to 1997 in this table were not restated to
reflect this new procedure because reliable data to do so was not available.

The upper portion of the table, which shows the re-estimated amounts
relating to the previously recorded liabilities, is based upon experience as of
the end of each succeeding year. These estimates are either increased or
decreased as further information becomes known about individual claims and as
changes in the trend of claim frequency and severity become apparent.

The "Cumulative redundancy (deficiency)" line on the table for any
given year represents the aggregate change in the estimates for all years
subsequent to the year the reserves were initially established. For example, the
1992 net reserve of $2,265 million developed to $2,231 million, or a $34 million
redundancy, by the end of 1994. By the end of 2001, the 1992 reserve had
developed a redundancy of $518 million. The changes in the estimate of 1992 loss
reserves were reflected in operations during the past nine years. Likewise, the
deficiency that developed with respect to year-end 2000 reserves was reflected
in our results of operations for 2001.

In 1993, St. Paul Re adopted the provisions of SFAS No. 113,
"Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration
Contracts". This statement required, among other things, that reinsurance
recoverables on unpaid losses and LAE be shown as an asset, instead of the prior
practice of netting this amount against insurance reserves for balance sheet
reporting purposes.

The middle portion of the table, which includes data for only those
periods impacted since the adoption of SFAS No. 113 (the years 1992 through
2001), represents a reconciliation between the net reserve liability as shown on
the top line of the table and the gross reserve liability as shown in St. Paul
Re's combined statements of identifiable underwriting assets and liabilities on
page F-13 of this prospectus. This portion of the table also presents the gross
re-estimated reserve liability as of the end of the latest re-estimation period
(December 31, 2001) and the related re-estimated reinsurance recoverable.

The lower portion of the table presents the cumulative amounts paid
with respect to the previously recorded liability as of the end of each
succeeding year. For example, as of December 31, 2001, $1,573 million of the
currently estimated $1,747 million of net losses and LAE that have been incurred
for the years up to and including 1992 have been paid. Thus, as of December 31,
2001, it is estimated that $174 million of net incurred losses and LAE have yet
to be paid for the years up to and including 1992.

Caution should be exercised in evaluating the information shown in this
table. It should be noted that each amount includes the effects of all changes
in amounts for prior periods. For

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example, the portion of the development shown for year-end 1996 reserves that
relates to 1991 losses is included in the cumulative redundancy (deficiency) for
the years 1991 through 1996.

In addition, the table presents calendar year data. It does not present
accident or policy year development data, which some readers may be more
accustomed to analyzing. The social, economic and legal conditions and other
trends which have had an impact on the changes in the estimated liability in the
past are not necessarily indicative of the future. Accordingly, readers are
cautioned against extrapolating any conclusions about future results from the
information presented in this table.

Note 4 to the combined statements, on page F-23 St. Paul Re's combined
statements, includes a reconciliation of beginning and ending loss reserve
liabilities for each of the last three years and is incorporated herein by
reference. Additional information about our reserves is contained in Note 4 of
St. Paul Re's combined statements on page F-23 of this prospectus.

ANALYSIS OF LOSS AND LOSS ADJUSTMENT EXPENSE (LAE) DEVELOPMENT

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
($ IN MILLIONS)

Net liability for unpaid
losses and LAE ................ $2,265 $2,189 $2,241 $2,424 $2,695 $3,116 $3,226 $2,855 $2,666 $3,693
====== ====== ====== ====== ====== ====== ====== ====== ====== ======

Liability re-estimated as of:
One year later ................ 2,225 2,179 2,218 2,431 2,758 3,040 3,058 2,730 2,761
Two years later ............... 2,231 2,158 2,246 2,476 2,689 2,712 2,754 2,744
Three years later ............. 2,211 2,179 2,272 2,423 2,239 2,447 2,739
Four year later ............... 2,231 2,202 2,225 2,065 2,094 2,439
Five years later .............. 2,262 2,168 1,874 1,853 2,073
Six years later ............... 2,238 1,803 1,681 1,841
Seven years later ............. 1,870 1,649 1,669
Eight years later ............. 1,749 1,646
Nine years later .............. 1,747
Ten years later................
Gross cumulative
redundancy
(deficiency) ................
Cumulative redundancy
(deficiency) .................. $ 518 $ 542 $ 572 $ 583 $ 622 $ 677 $ 487 $ 111 $ (95) --
====== ====== ====== ====== ====== ====== ====== ====== ====== ======

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[Enlarge/Download Table]

Net liability for unpaid
losses and LAE ................ $2,265 $2,189 $2,241 $2,424 $2,695 $3,116 $3,226 $2,855 $2,666 $3,693
Reinsurance recoverable on
unpaid losses ................. 714 687 694 674 669 613 251 596 902 1,256
Gross Liability ............... 2,979 2,876 2,935 3,098 3,365 3,729 3,477 3,451 3,568 4,949
Gross re-estimated
liability ...................
One year later ................ 2,931 2,865 2,909 3,113 3,436 3,208 3,356 3,325 3,664
Two years later ............... 2,939 2,841 2,946 3,166 2,917 3,039 3,069 3,428
Three years later ............. 2,916 2,871 2,979 2,715 2,714 2,784 3,123
Four year later ............... 2,944 2,901 2,579 2,491 2,474 2,837
Five years later .............. 2,984 2,553 2,352 2,279 2,505
Six years later ............... 2,684 2,302 2,154 2,312
Seven years later ............. 2,423 2,143 2,182
Eight years later ............. 2,294 2,176
Nine years later .............. 2,324
Ten years later ...............
Gross cumulative
redundancy
(deficiency) ................ $ 655 $ 700 $ 754 $ 786 $ 860 $ 893 $ 354 $ 23 $ (96) --
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Cumulative amount of net
liability paid through:
One year later ................ $ 492 $ 369 $ 339 $ 365 $ 357 $ 414 $ 696 $ 780 $ 663
Two years later ............... 768 620 579 599 640 967 1,318 1,343
Three years later ............. 951 792 736 780 1,071 1,425 1,650
Four years later .............. 1,079 905 863 1,117 1,416 1,640
Five years later .............. 1,154 998 1,134 1,375 1,544
Six years later ............... 1,212 1,217 1,336 1,453
Seven years later ............. 1,399 1,391 1,387
Eight years later ............. 1,544 1,431
Nine years later .............. 1,573
Ten years later................

Cumulative amount of
gross liability paid
through:
One year later ................ $ 551 $ 410 $ 376 $ 397 $ 381 $ 439 $ 746 $ 838 $ 706
Two years later ............... 861 689 643 650 685 1,033 1,410 1,435
Three years later ............. 1,068 882 817 847 1,152 1,523 1,760
Four years later .............. 1,212 1,007 957 1,217 1,525 1,749
Five years later .............. 1,297 1,110 1,258 1,500 1,661
Six years later ............... 1,362 1,355 1,483 1,584
Seven years later ............. 1,572 1,548 1,539
Eight years later ............. 1,734 1,593
Nine years later .............. 1,767
Ten years later ...............

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL INFORMATION

[Download Table]

PAGE
----

PLATINUM UNDERWRITERS HOLDINGS, LTD.

Independent Auditors' Report ............................................. F-2

Consolidated Balance Sheet ............................................... F-3

Notes to Consolidated Balance Sheet ...................................... F-4

THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)

Independent Auditors' Report ............................................. F-13

Combined Statements--As of December 31, 2001, 2000 and 1999 .............. F-14

Notes to Combined Statements--As of December 31, 2001, 2000 and 1999 ..... F-17

Combined Statements--As of June 30, 2002 and 2001 (unaudited) ............ F-30

Notes to Combined Statements--As of June 30, 2002 and 2001 (unaudited) ... F-33

[F-pages omitted]
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EX-2.1 288th Page of 301 TOC 1st Previous Next ↓Bottom Just 288th
================================================================================

No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.

TABLE OF CONTENTS

[Download Table]

PAGE
----

Prospectus Summary ................................................ 1
Risk Factors ...................................................... 22
Dilution .......................................................... 43
Use of Proceeds ................................................... 45
Dividend Policy ................................................... 48
Capitalization .................................................... 49
Pro Forma Financial Information ................................... 50
Management's Discussion and Analysis of
Pro Forma Financial Condition and
Underwriting Results ............................................ 56
Business .......................................................... 81
Management ........................................................ 114
St. Paul Investment, RenaissanceRe
Investment and Principal Shareholders ........................... 125
Certain Relationships and Related
Transactions .................................................... 128
Description of our Common Shares .................................. 147
Shares Eligible for Future Sale ................................... 154
Description of the Equity Security Units .......................... 155
Certain Tax Considerations ........................................ 158
Underwriting ...................................................... 169
Validity of Common Shares ......................................... 171
Experts ........................................................... 172
Available Information ............................................. 172
Enforceability of Civil Liabilities Under
United States Federal Securities Laws
and Other Matters ............................................... 172
The Predecessor Business .......................................... 174
Index to Consolidated Financial
Statements and Financial Information ............................ F-1

Through and including , 2002 (the 25th day after the date of
this prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to a dealer's obligation to deliver a prospectus
when acting as an underwriter and with respect to an unsold allotment or
subscription.

================================================================================

30,040,000 Shares

PLATINUM UNDERWRITERS
HOLDINGS, LTD.

Common Shares

----------

PROSPECTUS

----------

GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY

BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON
JPMORGAN
Representatives of the Underwriters

================================================================================

EX-2.1 289th Page of 301 TOC 1st Previous Next ↓Bottom Just 289th
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth expenses and costs payable by Platinum
Underwriters Holdings, Ltd. (the "Company") expected to be incurred in
connection with the issuance and distribution of the securities described in
this Registration Statement. All amounts are estimated except for the Securities
and Exchange Commisson's registration fee and the National Association of
Securities Dealers Inc.'s filing fee.

[Download Table]

AMOUNT TO BE PAID
-----------------

Securities and Exchange Commission registration fee ..... $ 84,534
NASD filing fee ......................................... 30,500
Legal fees and expenses.................................. 4,000,000
Fees and expenses of qualification under state
securities laws (including legal fees).................. 10,000
NYSE listing fees and expenses .......................... 250,000
Accounting fees and expenses ............................ 50,000
Printing and engraving fees ............................. 1,118,500
Registrar and transfer agent's fees ..................... 5,000
Miscellaneous ........................................... 10,000
-----------
Total $ 5,558,534
===========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 98 of the Companies Act 1981 provides generally that a Bermuda
company may indemnify its directors, officers and auditors against any liability
which by virtue of Bermuda law otherwise would be imposed on them, except in
cases where such liability arises from the fraud or dishonesty of which such
director, officer or auditor may be guilty in relation to the company. Section
98 further provides that a Bermuda company may indemnify its directors, officers
and auditors against any liability incurred by them in defending any proceeding,
whether civil or criminal, in which judgment is awarded in their favor or in
which they are acquitted if granted relief by the Supreme Court of Bermuda in
certain proceedings arising under Section 281 of the Companies Act.

The Company has adopted provisions in its bye-laws that provide that
the Company shall indemnify its officers and directors to the maximum extent
permitted under the Companies Act.

In addition, the Underwriting Agreement filed as Exhibit 1 to the
Registration Statement provides for indemnification of the Company, its officers
and its directors by the Underwriters under certain circumstances.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The Company was incorporated in April 19, 2002 under the laws of
Bermuda. The Company expects to enter into a Formation and Separation Agreement
pursuant to which, among other things, the Company will sell 6,000,000 Common
Shares in a private placement to The St. Paul Companies, Inc. (the number of
shares being subject to adjustment as provided therein), contingent upon
completion of the offering registered by this Registration Statement. The
Company has

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entered into an Investment Agreement pursuant to which, among other things, the
Company will sell 3,960,000 Common Shares in a private placement to
RenaissanceRe Holdings Ltd. (the number of shares being subject to adjustment as
provided therein), contingent upon completion of the offering registered by this
Registration Statement. The St. Paul Companies, Inc. and RenaissanceRe Holdings
Ltd. are the sole purchasers in the private placements and are each a "qualified
institutional buyer" as such term is defined in Rule 144A under the Securities
Act of 1933. Accordingly, the private placements will be made in reliance upon
the exemptions from registration provided in such circumstance by the no-action
letters regarding Black Box Incorporated (publicly available June 26, 1990) and
Squadron, Ellenoff, Plesent & Lehrer (publicly available February 28, 1992). The
Formation and Separation Agreement is filed as Exhibit 2 to this Registration
Statement. The Investment Agreement is filed as Exhibit 10.44 to this
Registration Statement.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

1 Form of Underwriting Agreement.**

2 Form of Formation and Separation Agreement.

3.1 Memorandum of Association of Platinum Holdings.**

3.2 Form of Restated Bye-Laws of Platinum Holdings.

4.1 Form of Certificate of the Common Shares, par value $0.01 per share,
of Platinum Holdings.**

4.2 Form of Indenture.*

4.3 Form of Indenture Supplement.*

4.4 Form of Purchase Contract Agreement.*

4.5 Form of Pledge Agreement.*

5.1 Opinion of Conyers, Dill & Pearman.**

8.1 Opinion of Sullivan & Cromwell as to certain tax matters.**

8.2 Opinion of Conyers, Dill & Pearman as to certain tax matters.**

8.3 Opinion of Slaughter and May as to certain tax matters.**

8.4 Opinion of A. & L. Goodbody as to certain tax matters.**

10.1 Employment Agreement between Jerome T. Fadden and The St. Paul
Companies, Inc.**

10.2 Letter Agreement between Steven H. Newman and The St. Paul Companies,
Inc.**

10.3 Employment Agreement between Michael D. Price and St. Paul Re, Inc.**

10.4 Letter Agreement between Steven H. Newman and The St. Paul Companies,
Inc.**

10.5 Form of Employee Benefits and Compensation Matters Agreement.**

10.6 Form of Master Services Agreement.**

10.7 Form of U.K. Master Services Agreement.**

10.8 Form of Runoff Services Agreement.**

10.9 Form of U.K. Runoff Services Agreement.**

10.10 Form of Transitional Trademark License Agreement.**

10.11 Form of Registration Rights Agreement.

10.12 Form of Underwriting Management Agreement.**

10.13 Form of U.K. Underwriting Agency and Underwriting Management
Agreement.**

10.14 Form of Assignment and Assumption Agreement.**

10.15 Form of Sub Lease Agreement.**

10.16 Form of Option Agreement.

10.17 Form of 100% Quota Share Retrocession Agreement (Traditional).**

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EX-2.1 291st Page of 301 TOC 1st Previous Next ↓Bottom Just 291st
10.18 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
D-1).**

10.19 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
A).**

10.20 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
B-1).**

10.21 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
B-2).**

10.22 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
C).**

10.23 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
D-2).**

10.24 Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D
Stop Loss).**

10.25 Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D
Spread Loss).**

10.26 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
D-3).**

10.27 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
D-4).**

10.28 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
E).**

10.29 Form of U.K. Business Transfer Agreement.**

10.30 Form of UK 100% Quota Share Retrocession Agreement (Traditional).**

10.31 Form of UK 100% Quota Share Retrocession Agreement (Non-traditional -
A).**

10.32 Form of UK 100% Quota Share Retrocession Agreement (Non-traditional -
B-1).**

10.33 Form of 364-Day Credit Agreement.**

10.34 Amendment to the Letter Agreement between Jerome T. Fadden and The
St. Paul Companies, Inc.**

10.35 Amendment to the Letter Agreement between Steven H. Newman and The
St. Paul Companies, Inc.**

10.36 Amendment to the Letter Agreement between Michael D. Price and
St. Paul Re., Inc.**

10.37 Form of Trust Agreement.**

10.38 Form of Trust Agreement.**

10.39 Form of Trust Agreement.**

10.40 Employment Agreement between William A. Robbie and St. Paul Re, Inc.**

10.41 Employment Agreement between Michael E. Lombardozzi and St. Paul Re,
Inc.**

10.42 Amendment to the Employment Agreement between William A. Robbie and
St. Paul Re, Inc.**

10.43 Amendment to the Employment Agreement between Michael E. Lombardozzi
and St. Paul Re, Inc.**

10.44 Investment Agreement by and among Platinum Underwriters Holdings,
Ltd., The St. Paul Companies, Inc., and RenaissanceRe Holdings Ltd.**

10.45 Form of Transfer Restrictions, Registration Rights and Standstill
Agreement (included in Exhibit 10.44).**

10.46 Form of RenaissanceRe Option Agreement (included in Exhibit 10.44).**

10.47 Form of Services and Capacity Reservation Agreement (included in
Exhibit 10.44).**

10.48 Letter Amendment to 364-Day Credit Agreement.

21 Subsidiaries of Platinum Holdings.**

23.1 Consent of KPMG LLP.

23.2 Consent of Conyers, Dill & Pearman (included in Exhibit 5.1).**

23.3 Consent of Sullivan & Cromwell (included in Exhibit 8.1).**

23.4 Consent of Conyers, Dill & Pearman (included in Exhibit 8.2).**

23.5 Consent of Slaughter and May (included in Exhibit 8.3).**

23.6 Consent of A. & L. Goodbody (included in Exhibit 8.4).**

24 Power of Attorney (included on the signature page of Amendment No. 3
to the Registration Statement).**

24.1 Power of Attorney of William A. Robbie.

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EX-2.1 292nd Page of 301 TOC 1st Previous Next ↓Bottom Just 292nd
99.1 Consent of Jay S. Fishman.**

99.2 Consent of Steven H. Newman.**

99.3 Consent of H. Furlong Baldwin.**

99.4 Consent of Peter T. Pruitt.**

99.5 Consent of Jonathan F. Bank.**

99.6 Consent of Dan R. Carmichael.**.

99.7 Resignation of Charles G.R. Collis.**

99.8 Resignation of David J. Doyle.**

--------------
* Incorporated by reference from Registration Statement Nos. 333-99019 and
333-99019-01 of Platinum Underwriters Holdings, Ltd. and Platinum
Underwriters Finance, Inc.

** Filed previously.

(b) Financial Statement Schedules of Predecessor

Schedule III Supplementary Insurance Information

Schedule IV Reinsurance

Schedule V Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(a) To provide to the underwriters at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each
purchaser.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions described under
"Item 14. Indemnification of Directors and Officers" above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment to the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.

(c)(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 7 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Hamilton, Bermuda on the 11th day of October, 2002.

PLATINUM UNDERWRITERS HOLDINGS, LTD.

By: /s/ JEROME T. FADDEN
-----------------------------------------
Name: Jerome T. Fadden
Title: President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 7 to the Registration Statement has been signed by the
following persons in the capacities indicated on October 11, 2002:

NAME TITLE
---- -----

STEVEN H. NEWMAN* Chairman of the Board of
----------------------------------- Directors
Steven H. Newman

JEROME T. FADDEN President, Chief Executive
----------------------------------- Officer and Director
Jerome T. Fadden

WILLIAM A. ROBBIE* Executive Vice President,
----------------------------------- Chief Financial Officer
William A. Robbie and Principal Accounting
Officer

H. FURLONG BALDWIN* Director
-----------------------------------
H. Furlong Baldwin

JONATHAN F. BANK* Director
-----------------------------------
Jonathan F. Bank

DAN R. CARMICHAEL* Director
-----------------------------------
Dan R. Carmichael

JAY S. FISHMAN* Director
-----------------------------------
Jay S. Fishman

PETER T. PRUITT* Director
-----------------------------------
Peter T. Pruitt

DONALD PUGLISI* Authorized Representative
----------------------------------- in the United States
Donald Puglisi

*By: /s/ JEROME T. FADDEN
------------------------------
Jerome T. Fadden
Attorney-in-Fact

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EX-2.1 294th Page of 301 TOC 1st Previous Next ↓Bottom Just 294th
THE ST. PAUL COMPANIES, INC.
REINSURANCE UNDERWRITING SEGMENT (PREDECESOR)

SCHEDULE III--SUPPLEMENTARY INSURANCE INFORMATION
($ IN MILLIONS)

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DEFERRED POLICY GROSS LOSS AND GROSS
ACQUISITION LOSS ADJUSTMENT UNEARNED
EXPENSES EXPENSE RESERVES PREMIUMS
--------------- ---------------- --------

AT DECEMBER 31,
2001
North American Property ..... $ 14 $ 694 $ 54
North American Casualty ..... 73 2,286 242
International ............... 9 902 59
Finite Risk ................. 11 1,067 46
----- ------- -----
Total ...................... $ 107 $ 4,949 $ 401
===== ======= =====
2000
North American Property ..... $ 14 $ 439 $ 53
North American Casualty ..... 51 1,903 162
International ............... 10 669 51
Finite Risk ................. 11 557 49
----- ------- -----
Total ...................... $ 86 $ 3,568 $ 315
===== ======= =====
1999
North American Property ..... $ 20 $ 414 $ 95
North American Casualty ..... 38 1,821 140
International ............... 18 711 102
Finite Risk ................. 11 505 39
----- ------- -----
Total ...................... $ 87 $ 3,451 $ 376
===== ======= =====

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EX-2.1 295th Page of 301 TOC 1st Previous Next ↓Bottom Just 295th
THE ST. PAUL COMPANIES, INC.
REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
SCHEDULE III--SUPPLEMENTARY INSURANCE INFORMATION
($ IN MILLIONS)

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INSURANCE
LOSSES AND AMORTIZATION OF
LOSS POLICY OTHER
PREMIUMS ADJUSTMENT ACQUISITION OPERATING PREMIUMS
EARNED EXPENSES EXPENSES EXPENSES WRITTEN
-------- ---------- --------------- -------- --------

2001
North American Property ...... $ 216 $ 381 $ 53 $ 14 $ 216
North American Casualty ...... 588 584 190 29 667
International ................ 242 289 39 23 248
Finite Risk .................. 547 668 33 16 546
------- ------- ----- ---- -------
Total ....................... $ 1,593 $ 1,922 $ 315 $ 82 $ 1,677
======= ======= ===== ==== =======
2000
North American Property ...... $ 204 $ 133 $ 55 $ 17 $ 170
North American Casualty ...... 319 261 110 24 340
International ................ 188 128 38 32 145
Finite Risk .................. 410 289 133 15 418
------- ------- ----- ---- -------
Total $ 1,121 $ 811 $ 336 $ 88 $ 1,073
======= ======= ===== ==== =======
1999
North American Property ...... $ 196 $ 153 $ 58 $ 13 $ 207
North American Casualty ...... 245 61 85 24 262
International ................ 160 102 47 32 160
Finite Risk .................. 277 184 30 13 284
------- ------- ----- ---- -------
Total ....................... $ 878 $ 500 $ 220 $ 82 $ 913
======= ======= ===== ==== =======

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EX-2.1 296th Page of 301 TOC 1st Previous Next ↓Bottom Just 296th
THE ST. PAUL COMPANIES, INC.
REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
SCHEDULE IV--REINSURANCE
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
($ IN MILLIONS)

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PERCENTAGE
CEDED TO ASSUMED OF AMOUNT
GROSS OTHER FROM OTHER ASSUMED TO
AMOUNT COMPANIES COMPANIES NET AMOUNT NET
------ --------- --------- ---------- -----------

INSURANCE PREMIUMS EARNED:
2001 ......................... $ -- $ 172 $ 1,765 $ 1,593 110.8%
2000 ......................... $ -- $ 260 $ 1,381 $ 1,121 123.2%
1999 ......................... $ -- $ 314 $ 1,192 $ 878 135.8%

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EX-2.1 297th Page of 301 TOC 1st Previous Next ↓Bottom Just 297th
THE ST. PAUL COMPANIES, INC.
REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
SCHEDULE V--VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
($ IN MILLIONS)

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ADDITIONS
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(1) OF YEAR
------------ ---------- ---------- ------------- -------

DESCRIPTION
2001
Premiums receivable from
underwriting activities..... $ 11.0 2.6 -- 0.5 $ 13.1
Reinsurance .................. $ 11.5 6.9 -- -- $ 18.4
2000
Premiums receivable from
underwriting activities..... $ 9.6 2.2 -- 0.8 $ 11.0
Reinsurance .................. $ 11.2 0.3 -- -- $ 11.5
1999
Premiums receivable from
underwriting activities..... $ 9.9 0.8 -- 1.1 $ 9.6
Reinsurance .................. $ 12.7 -- -- 1.5 $ 11.2

--------------
(1) Deductions include write-offs of amounts determined to be uncollectible
and unrealized foreign exchange gains and losses.

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INDEX TO EXHIBITS

EXHIBIT
NO. DESCRIPTION
------- -----------
1 Form of Underwriting Agreement.**

2 Form of Formation and Separation Agreement.

3.1 Memorandum of Association of Platinum Holdings.**

3.2 Form of Restated Bye-Laws of Platinum Holdings.

4.1 Form of Certificate of the Common Shares, par value $0.01 per share, of
Platinum Holdings.**

4.2 Form of Indenture.*

4.3 Form of Indenture Supplement.*

4.4 Form of Purchase Contract Agreement.*

4.5 Form of Pledge Agreement.*

5.1 Opinion of Conyers, Dill & Pearman.**

8.1 Opinion of Sullivan & Cromwell as to certain tax matters.**

8.2 Opinion of Conyers, Dill & Pearman as to certain tax matters.**

8.3 Opinion of Slaughter and May as to certain tax matters.**

8.4 Opinion of A. & L. Goodbody as to certain tax matters.**

10.1 Employment Agreement between Jerome T. Fadden and The St. Paul
Companies, Inc.**

10.2 Letter Agreement between Steven H. Newman and The St. Paul Companies,
Inc.**

10.3 Employment Agreement between Michael D. Price and St. Paul Re., Inc.**

10.4 Letter Agreement between Steven H. Newman and The St. Paul Companies,
Inc.**

10.5 Form of Employee Benefits and Compensation Matters Agreement.**

10.6 Form of Master Services Agreement.**

10.7 Form of U.K. Master Services Agreement.**

10.8 Form of Runoff Services Agreement.**

10.9 Form of U.K. Runoff Services Agreement.**

10.10 Form of Transitional Trademark License Agreement.**

10.11 Form of Registration Rights Agreement.

10.12 Form of Underwriting Management Agreement.**

10.13 Form of U.K. Underwriting Agency and Underwriting Management
Agreement.**

10.14 Form of Assignment and Assumption Agreement.**

10.15 Form of Sub Lease Agreement.**

10.16 Form of Option Agreement.

10.17 Form of 100% Quota Share Retrocession Agreement (Traditional).**

10.18 Form of 100% Quota Share Retrocession Agreement (Non-Traditional -
D-1).**