major business schools and universities in Paris. Mr. Damerval holds an M.B.A. degree in corporate finance and accounting from the Institut D’Etudes Politques, the first part of a PhD in international finance from Paris Economics University and is a graduate of the Association of International Bond Dealers in Montreux, Switzerland.

Michael French has served as a director since May 1998. He served as Chief Executive Officer of the Company from May 1998 to January 2005, and served as our President from May 1998 to March 2000. Mr. French has also been Chairman of the Board since March 2000. He was a Managing Director of Maverick Capital, Ltd. from 1993 to 1996, and a consultant to the law firm of Jones, Day, Reavis & Pogue from 1995 to January 2000. From 1996 to May 1998, Mr. French was a Managing Director of The Scottish Annuity Company (Cayman) Ltd. He was a director of Sterling Software, Inc. from July 1992 until its acquisition by another company in March 2000 and a director of Michaels Stores, Inc., a national specialty retail chain, from 1992 to August 2000. Mr. French was a partner with the law firm of Jackson & Walker, L.L.P. from 1976 through 1995. Mr. French received a B.B.A. and J.D. from Baylor University.

Lord Norman Lamont has served as a director since December 2001. From 1990 to 1993, Lord Lamont served as Chancellor of the Exchequer (Treasury Secretary), chairing the G7 group of Finance Ministers and the European Union Finance Ministers. Lord Lamont served as a Conservative Member of Parliament from 1972 to 1993, served as a Minister in the Departments of Energy, Trade & Industry, Defense and Treasury from 1979 to 1997, and became a member of the British House of Lords in 1998. Lord Lamont currently serves as a director of the Balli Group plc, a commodities trading company that specializes in steel, petrochemicals and non-ferrous metals. He is also an advisor to Rotch Property Group Ltd., one of Britain’s largest private property companies. He is also a director of Compagnie Internationale de Participations Bancaires et Financieres, Banca Commerciala Robank, European Growth and Income Trust, and Jupiter Finance and Income Trust. He is Chairman of the East European Food Fund. Lord Lamont previously was a director of N.M. Rothschild & Sons Ltd. for whom he worked for more than 15 years.

Hazel O’Leary has served as a director since February 2001. Ms. O’Leary currently serves as the President of Fisk University and is the President of O’Leary & Associates, Inc., an energy consulting firm with a diverse mix of domestic and international energy producers and consumers as clients. Ms. O’Leary was the President and Chief Operating Officer of Blaylock & Partners, an investment banking firm, from 1997 to 2002. From 1993 to 1997, Ms. O’Leary served as United States Secretary of Energy, and from 1977 to 1981 served as Administrator and Deputy Administrator of the Department of Energy’s Economic Regulatory Administration. Ms. O’Leary serves as a director on the boards of UAL Inc., the parent of United Airlines; AES Corporation, a global independent power producer; and Alchemix Corporation, an energy technology company.

Glenn Schafer was elected to the Board of Directors in February 2006 to fill a vacancy created by the increase in the size of the Board to ten directors. Previously, Mr. Schafer was elected as a Class I director in 2001 in connection with our acquisition of World-Wide Holdings from Pacific Life and resigned his position as director in 2005. In accordance with our Articles of Association, since Mr. Schafer was initially elected by our Board and not our shareholders, he is required to stand for election by our shareholders at our 2006 Annual General Meeting. From January 1995 until December 2005, Mr. Schafer was President of Pacific Life Insurance Company. Mr. Schafer is a member of the board of directors of Court Appointed Special Advocates (CASA) and of Beckman Coulter, Inc., a NYSE-listed company. Mr. Schafer also serves as a director of the Michigan State University Foundation Board. Mr. Schafer graduated from Michigan State University with a Bachelor of Science degree in accounting. He received an MBA in finance from the University of Detroit in 1976 and is a CPA.

William L. Spiegel is the President of The Cypress Group, which manages over $3.5 billion in private equity funds. He has been with the Cypress Group since its formation in 1994. Prior to joining the Cypress Group, he was a member of the Merchant Banking Group at Lehman Brothers. Over the course of his career, he has worked on private equity transactions in a wide range of industries. Mr. Spiegel currently manages the Cypress Group’s efforts in the healthcare and financial services industries. Mr. Spiegel is a director of Catlin Group Ltd., FGIC Corporation, GoldBanc, Med Pointe Inc., and Montpelier Re Holdings Ltd. He has an M.B.A. from The University of Chicago, an M.A. in Economics from the University of Western Ontario, and a B.Sc. in Economics from The London School of Economics.

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Scott E. Willkomm was appointed Chief Executive Officer effective January 1, 2005. He has served as a director since June 2000, and as our President since March 2000. He also served as the Company’s Chief Financial Officer from September 2000 to April 2002. Mr. Willkomm was a Managing Director of Prudential Securities Incorporated from March 1999 to March 2000 and a Director from July 1996 to February 1999. Mr. Willkomm served as a Senior Vice President of Oppenheimer & Co., Inc. from May 1995 to July 1996 and a Vice President from March 1992 to April 1995. He is a graduate of Bowdoin College.

Executive Officers

Name				Age				Position
Scott Willkomm				40				President and Chief Executive Officer
Paul Goldean				39				Executive Vice President and General Counsel
David Huntley				45				Chief Executive Officer, Scottish Re Holdings Limited
Thomas McAvity				63				Executive Vice President and Chief Investment Strategist
Hugh McCormick				61				Executive Vice President, Corporate Development
Dean Miller				43				Executive Vice President and Chief Financial Officer
Seth Vance				45				President and Chief Executive Officer, Scottish Holdings, Inc.
Clifford Wagner				47				Executive Vice President and Chief Actuary

Paul Goldean has been Executive Vice President and General Counsel since February 2004. He joined the Company in February 2002 as its Senior Vice President and General Counsel. Prior to joining the Company, Mr. Goldean worked at Jones, Day, Reavis & Pogue from March 2000 to February 2002 where, among other things, he acted as outside counsel to the Company. From 1997 to 2000, Mr. Goldean worked with the law firm of Strasburger & Price, L.L.P. Mr. Goldean received his B.B.A. from the University of Texas at El Paso and his J.D. from Southern Methodist University.

David Huntley has served as Chief Executive Officer of Scottish Re Holdings Limited since May 2003. Prior to joining Scottish Re Holdings Limited, Mr. Huntley served as Chief Executive Officer of Swiss Re Life & Health Australia Ltd. from September 2000 to March 2003. From February 1999 to September 2000 he served as Technical Operations Manager, Swiss Re Life & Health Ltd. and from February 1997 to February 1999 as Business Manager, Swiss Re Life & Health Ltd. Prior to his employment with Swiss Re, Mr. Huntley served as Directeur Général of Mercantile and General Gestion de Reassurance SA, Paris and held positions with Prudential Financial Services and the National Provident Institution. Mr. Huntley holds a B.A. degree (honors) in Mathematics & Statistics from York University. He is a Fellow of the Institute of Actuaries.

Thomas McAvity has served as Executive Vice President and Chief Investment Strategist since August 2005. Mr. McAvity joined the Company in September 2000 and from then until August 2005 he and served as Executive Vice President and Chief Investment Officer. Mr. McAvity’s investment management career spans 30 years and all major asset classes. From 1996 to 2000, he was Vice President-Asset Liability Management with Allstate Life Insurance Company in Northbrook, Illinois. From 1989 to 1996, he was Vice President-Quantitative Research in the investment management subsidiary of Lincoln National Corporation. Prior to that, he held positions at Alex. Brown & Sons, Inc. and B. F. Saul Company. He is a graduate of Yale University and holds an MBA from Harvard Business School.

Hugh McCormick has served as Executive Vice President, Corporate Development since February 2005. Prior to joining the Company, Mr. McCormick worked at LeBoeuf, Lamb, Greene & MacRae LLP from 1983 to 2005 where, among other things, he acted as outside counsel to the Company. During his tenure at LeBoeuf, Lamb, Greene & MacRae LLP, Mr. McCormick, serving as a partner for the last 13 years, advised domestic and foreign insurance and reinsurance companies on tax, regulatory and corporate matters arising in connection with mergers and acquisitions, demutualizations, reinsurance transactions and insurance products. He is a correspondent member of the Reinsurance Section of the Society of Actuaries, and chairs the Regulation and Tax Committee of the Reinsurance Section. Mr. McCormick also regularly speaks and writes on insurance issues. From 2002 to 2004, he served as President and Chairman of the Board of Directors of the Insurance Tax Conference, Inc., and is a member

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of the Board of Advisors and Contributors of the Journal of Taxation of Investments. He contributed the chapter on ‘‘US Regulatory Issues’’ for International Life Insurance (Chancellor Publications Ltd. (UK), 2002), and is a co-author of Insurance Industry Mergers and Acquisitions, which is to be published in 2005 by the Society of Actuaries. From 1977 to 1981, he was an attorney-advisor with the Interpretative Division of the Office of Chief Counsel of the Internal Revenue Service. Mr. McCormick received a B.A. from the University of Michigan, a J.D. from Rutgers University School of Law and an LL.M. (Taxation) from Georgetown University.

Dean Miller has served as Executive Vice President and Chief Financial Officer since August 2005. He is responsible for the day to day financial operations of the Company and its subsidiaries. From May 2003 to July 2005, Mr. Miller was Chief Executive Officer of Swiss Re’s Admin Re (SM) business in the United Kingdom. During that same time, he was also Chief Executive Officer of Swiss Re Services Limited, with responsibility for shared service activities in Swiss Re’s UK operations. From 2001 to 2003, Mr. Miller was Chief Financial Officer of Swiss Re’s Life and Health Business Group, and was a member of its Life Executive Board. Mr. Miller joined Swiss Re in 2000 as Senior Vice President — Finance, North American Life and Health. From 1997 to 2000, he was a partner with Ernst & Young in the New York office. Mr. Miller commenced his professional career in 1985 with Ernst & Young in Columbus, Ohio. Mr. Miller is a graduate of Miami University, Oxford, Ohio and is a Certified Public Accountant.

Seth Vance has served as President and Chief Executive Officer of Scottish Holdings, Inc. since April 2004. Prior to joining Scottish Holdings, Inc., Mr. Vance worked in London, England from 2000 to 2004, where he served as a Managing Director and Head of European CDOs with Deutsche Bank from 2002 to 2004, and as Managing Director and Head of European Global Structured Bonds and CDOs with Salomon Brothers from 2000 to 2002. From 1996 until 2000, Mr. Vance was the Director of Trading at Koch Industries, Inc., while also holding the position of Chief Operating Officer and Executive Vice President of Koch Petroleum Group. Prior to joining Koch, Mr. Vance spent eight years in Investment Banking, starting in Financial Institutions M&A with Salomon Brothers in 1988. After graduating college, Mr. Vance spent three years in public accounting and then attended business school. Mr. Vance holds a B.B.A. from Brigham Young University and an M.B.A. from Harvard Business School. Mr. Vance is also a Certified Public Accountant.

Clifford Wagner has been Executive Vice President and Chief Actuary since January 2002. Mr. Wagner served as Executive Vice President and Chief Actuary, Risk Management of Scottish Re (U.S.), Inc. from December 1999 to December 2001. Prior to joining Scottish Re (U.S.), Inc., Mr. Wagner worked as a marketing actuary with Transamerica Reinsurance Company from November 1995 to December 1999. His 20-plus-year career in the actuarial profession includes 10 years with Time Insurance (now part of the Fortis Group) and three years with the Hartford Insurance Group. Mr. Wagner holds a B.S. degree in actuarial mathematics from the University of Wisconsin, Madison. He is a Fellow of the Society of Actuaries (FSA) and a Member of the American Academy of Actuaries (MAAA).

BOARD MEETINGS AND COMMITTEES

The Board met five times during fiscal year 2005. Each of the individual Board committees held separate meetings during fiscal year 2005. Overall attendance at board and committee meetings was approximately 96%. The Board has adopted the New York Stock Exchange’s standards for determination of director independence. In 2005, the Board concluded that the following directors are independent in accordance with the director independence standards of the New York Stock Exchange, and it has also determined that none of them has a material relationship with the Company that would impair their independence from management or otherwise compromise his or her ability to act as an independent director: Michael Austin, Bill Caulfeild-Browne, Robert Chmely, Jean Claude Damerval, Lord Norman Lamont, Hazel O’Leary and William Spiegel.¹ Accordingly, the majority of the Board is comprised of independent directors. Directors are encouraged to attend the Company’s Annual General Meeting of shareholders. All nine (9) directors attended the 2005 Annual General Meeting of shareholders held on May 4, 2005.

1	The Board has determined that Mr. Spiegel is not independent for purposes of the Audit Committee pursuant to Rule 10A-3 of the Securities Exchange Act of 1934.

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The non-management directors of the Company meet at regularly scheduled executive sessions without management. Pursuant to the Company’s Corporate Governance Guidelines, executive sessions of the non-management directors are scheduled at every regular Board meeting, and as requested by a director. Mr. Caulfield-Browne has been selected to preside at all regularly scheduled executive sessions of non-management directors.

The Board had four standing committees in fiscal year 2005: the Audit Committee, the Compensation Committee, the Corporate Governance Committee and the Finance and Investment Committee (renamed the Investments Committee in fiscal year 2006). Each of these committees operates pursuant to a written charter, which may be found on our website at www.scottishre.com.

•

The Audit Committee: (1) recommends to the Board annually, and at other appropriate times, the firm to be retained as our independent registered public accounting firm and, in connection therewith, reviews the professional services to be provided by the independent registered public accounting firm and the proposed fees therefore, and the independence of such firm from our management, considering, among other things, non-auditing services to be provided by the independent registered public accounting firm; (2) reviews with the independent registered public accounting firm their plans for and scope of their annual audit and other examinations; (3) reviews with the independent registered public accounting firm the report of their annual audit, or proposed report of their annual audit, the accompanying management letter, if any, and the reports of the results of such other examinations that they may undertake; (4) reviews with our appropriate officers and the independent registered public accounting firm the annual financial statements; (5) reviews with the appropriate officers our ongoing audit activities, examinations, and the results thereof; (6) reviews with the appropriate officers and the independent registered public accounting firm the adequacy of our internal accounting controls over financial reporting, auditing procedures, and practices and its financial, auditing, and accounting organizations and personnel; (7) reviews with the appropriate officers any recommendations made by the independent registered public accounting firm, as well as such other matters, if any, as such persons may desire to bring to the attention of the Audit Committee; and (8) reviews such other matters in relation to our accounting, auditing, and financial reporting practices and procedures as the Audit Committee may deem desirable in connection with the review function described above. In fiscal year 2005, the Audit Committee members were Michael Austin, Lord Norman Lamont, Robert Chmely, Jean Claude Damerval and Hazel O’Leary. The Audit Committee met ten times during fiscal year 2005. The Board, in its business judgment, has determined that all of the members of the Audit Committee are ‘‘independent,’’ as defined in Section 303A.02 and 303A.06 of the New York Stock Exchange’s listing standards and as required under Rule 10(a)(3) of the Securities Exchange Act of 1934. The Audit Committee has determined that Michael Austin qualifies as an ‘‘audit committee financial expert’’ under the rules of the Securities and Exchange Commission.

•

The Compensation Committee met five times during fiscal year 2005. The Compensation Committee oversees the administration of the Company’s Second Amended and Restated 1998 Stock Option Plan, the 1999 Stock Option Plan, the Harbourton Employee Options, the 2001 Stock Option Plan and the 2004 Equity Compensation Plan (collectively, the ‘‘Option Plans’’). The Compensation Committee: (1) recommends the Company’s compensation policies and procedures to the Board; (2) reviews performance of Company officers; (3) approves base salary levels; (4) oversees the administration of the Option Plans and other incentive compensation plans; (5) reviews corporate goals and objectives, approved by the full Board relevant to CEO compensation, evaluates the performance of the CEO in light of these goals and objectives and sets the CEO’s compensation level based on this evaluation; and (6) reviews committee member qualifications. The Compensation Committee members were William Spiegel, Hazel O’Leary and Bill Caulfeild-Browne. The Board, in its business judgment, has determined that all of the members of the Compensation Committee are ‘‘independent,’’ as defined in Section 303A.06 of the New York Stock Exchange’s listing standards.

•	The Corporate Governance/Nominating Committee: (1) identifies and makes recommendations to the Board on individuals qualified to serve as Board members; (2) develops and recommends

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to the Board corporate governance guidelines applicable to the Company, which may be found on our website at www.scottishre.com; (3) takes a leadership role in shaping the corporate governance of the Company; (4) reviews and recommends the renomination of incumbent directors; (5) reviews and recommends committee appointments; (6) leads the Board in its annual review of the Board’s performance; and (7) performs other related tasks, such as studying the size, committee structure, and meeting frequency of the Board. In addition, the Corporate Governance/Nominating Committee develops and reviews background information for candidates for the Board, including those recommended by shareholders, and makes recommendations to the Board regarding such candidates. Any shareholder wishing to propose a nominee to the Board should submit a recommendation in writing to the Company’s Secretary, indicating the nominee’s qualifications and other relevant information and providing confirmation of the nominee’s consent. In fiscal year 2005, the Corporate Governance/Nominating Committee members were Robert Chmely, Michael Austin and Bill Caulfeild-Browne. The Corporate Governance/Nominating Committee met four times during fiscal year 2005. The Board, in its business judgment, has determined that all of the members of the Corporate Governance/Nominating Committee are ‘‘independent,’’ as defined in Section 303A.06 of the New York Stock Exchange’s listing standards, and the Corporate Governance/Nominating Committee is made up of each of the independent directors of the Company. For the fiscal year ended December 31, 2005, all of the non-managing Directors of the Company were also independent directors. Therefore, the meetings of the Corporate Governance/Nominating Committee constitute the regulatory scheduled executive sessions of non-management directors. The Corporate Governance/Nominating Committee charter is attached as Annex A.

In carrying out its function to nominate candidates for election to the Board, the Corporate Governance/Nominating Committee considers a mix of skills, experience, character, commitment, and diversity of background, all in the context of the requirements of the Board at that point in time. The Corporate Governance/Nominating Committee believes that each candidate should be an individual who has demonstrated integrity and ethics in such candidate’s personal and professional life, have an understanding of elements relevant to the success of a publicly-traded company and have established a record of professional accomplishment in such candidate’s chosen field. Each candidate should be prepared to participate fully in Board activities, including attendance at, and active participation in, meetings of the Board, and not have other personal or professional commitments that would, in the Corporate Governance/Nominating Committee’s judgment, interfere with or limit such candidate’s ability to do so. Each candidate should also be prepared to represent the best interests of our shareholders and not just one particular constituency. Additionally, in determining whether to recommend a director for re-election, the Corporate Governance/Nominating Committee also considers the director’s past attendance at Board and Committee meetings and participation in and contributions to the activities of the Board. The Corporate Governance/Nominating Committee has no stated specific, minimum qualifications that must be met by a candidate for a position on our Board.

The Corporate Governance/Nominating Committee’s methods for identifying candidates for election to the Board (other than those proposed by our shareholders, as discussed below) include the solicitation of ideas for possible candidates from a number of sources — members of the Board; our executives; individuals personally known to the members of the Board; and other research, including database and Internet searches. The Corporate Governance/Nominating Committee may also from time to time retain one or more third-party search firms to identify suitable candidates.

Any of our shareholders may nominate one or more persons for election as a director at the annual meeting of shareholders if the shareholder complies with the notice, information and consent provisions contained in our Articles of Association. In addition, the notice must include any other information required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. The Corporate Governance/Nomincating Committee will consider all candidates identified through the processes described above, and will evaluate each of them, including incumbents, based on the same criteria.

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•

The Investments Committee establishes and monitors the Company’s investment policies, the performance of the Company’s investment managers and the Company’s banking and/or financing relationships. The Investments Committee members were Robert Chmely, Jean Claude Damerval, Michael French, Hazel O’Leary, Lord Norman Lamont and William Spiegel. The Investments Committee met five times during fiscal year 2005.

How to Contact the Board of Directors

Shareholders who wish to communicate with the Board or a particular director may send a letter to the Secretary of the Company at Scottish Re Group Limited, P.O. Box HM 2939, Crown House, Third Floor, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda. The mailing envelope must clearly identify the correspondence as a ‘‘Shareholder-Board Communication’’ or ‘‘Shareholder-Director Communication.’’ All such letters must identify the author as a shareholder and clearly state whether the intended recipients are members of the Board or just certain specified individual directors. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors.

PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP

The following table sets forth the beneficial ownership of the ordinary shares of the Company by all persons who beneficially own 5% or more of the ordinary shares, by each director and named executive officer and by all directors, director nominees and executive officers as a group as of March 8, 2006.

Name and Address of Beneficial Owners (1)				Amount of Ordinary Shares Beneficial Ownership				Percent of Class
Michael Austin (2)					30,000					*
Bill Caulfeild-Browne (2)					32,000					*
Robert Chmely (3)					28,000					*
Jean Claude Damerval (4)					20,000					*
Michael French (5)					919,067				1.72	%
Paul Goldean (6)					33,039					*
David Huntley (7)					20,000					*
Lord Norman Lamont (8)					16,000					*
Thomas McAvity (9)					95,934					*
Hugh McCormick (10)					18,556					*
Dean Miller					—					*
Hazel O’Leary (11)					20,700					*
Glenn S. Schafer (12)					10,000					*
William Spiegel (13)					11,300					*
Seth Vance (14)					83,334					*
Clifford Wagner (15)					72,186					*
Scott Willkomm (16)					387,581					*
CMBP II (Cayman) Ltd. (17)(13)					9,330,510				17.44	%
Wellington Management Company, LLP (18)					4,166,083				7.79	%
T. Rowe Price Associates, Inc. (19)					1,136,544				2.12	%
Boston Partners Asset Management, LLC (20)					3,608,190				6.75	%
FMR Corp. (21)					5,189,026				9.70	%
Wells Fargo & Company (22)					3,043,349				5.69	%
Wells Capital Management Incorporated (22)					2,941,650				5.50	%
All directors, director nominees and executive officers as a group (seventeen persons)					1,797,697				3.36	%

(1)	Less than 1%

(1)	Except as otherwise indicated, the address for each beneficial owner is c/o Scottish Re Group Limited, P.O. Box HM 2939, Crown House, Third Floor, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda.

(2)	Includes 22,000 ordinary shares of the Company subject to options exercisable within 60 days.

(3)	Includes 22,000 ordinary shares of the Company subject to options exercisable within 60 days. Also includes 500 ordinary shares of the Company held by Mr. Chmely’s spouse.

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(4)	Includes 10,000 ordinary shares of the Company subject to options exercisable within 60 days. Also includes 10,000 ordinary shares of the Company held by a trust of which Mr. Damerval is a beneficiary.

(5)

Includes 227,000 ordinary shares of the Company, 200,000 ordinary shares of the Company issuable upon the exercise of Class A warrants exercisable within 60 days and 266,667 ordinary shares of the Company subject to options exercisable within 60 days, all of which are beneficially owned by an irrevocable trust of which Mr. French and certain family members are beneficiaries. Mr. French disclaims beneficial ownership of such ordinary shares. Also includes 150,000 ordinary shares of the Company issuable upon the exercise of Class A warrants exercisable within 60 days. Also includes 135,000 ordinary shares of the Company subject to options exercisable within 60 days.

(6)	Includes 31,334 ordinary shares of the Company subject to options exercisable within 60 days.

(7)	All of which are subject to options exercisable within 60 days.

(8)	All of which are subject to options exercisable within 60 days.

(9)	Includes 93,334 ordinary shares of the Company subject to options exercisable within 60 days.

(10)	Includes 16,667 ordinary shares of the Company subject to options exercisable within 60 days.

(11)	Includes 18,000 ordinary shares of the Company subject to options exercisable within 60 days.

(12)	All of which are subject to options exercisable within 60 days.

(13)	Includes 10,000 ordinary shares of the Company subject to options exercisable within 60 days. Mr. Spiegel, CMBP II (Cayman) Ltd. and Cypress Associates II (Cayman) L.P. disclaim beneficial ownership of the ordinary shares of the Company owned by the Cypress Entities.

(14)	All of which are subject to options exercisable within 60 days.

(15)	Includes 71,334 ordinary shares of the Company subject to options exercisable within 60 days.

(16)	Includes 335,000 ordinary shares of the Company subject to options exercisable within 60 days.

(17)

Based on a Schedule 13D/A filed by CMBP II (Cayman) Ltd. with the Securities and Exchange Commission on May 11, 2005, as a joint filer with Cypress Associates II (Cayman) L.P., Cypress Merchant B Partners II (Cayman) L.P., Cypress Merchant B II-A C.V., Cypress Side-by-Side (Cayman) L.P. and 55th Street Partners II (Cayman) L.P. The address of the joint filers is Cypress Associates II (Cayman) L.P., c/o The Cypress Group L.L.C., 65 East 55th Street, 28th Floor, New York, New York 10022.

(18)	Based on a Schedule 13G/A filed by Wellington Management Company, LLP with the Securities and Exchange Commission on February 14, 2006. The address of Wellington Management Company, LLP is 75 State Street, Boston, MA 02109.

(19)	Based on a Schedule 13G/A filed by T. Rowe Price Associates, Inc. with the Securities and Exchange Commission on February 14, 2006. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202.

(20)	Based on a Schedule 13G/A filed by Boston Partners Asset Management, LLC with the Securities and Exchange Commission on February 14, 2006. The address of Boston Partners Asset Management, LLC is 28 State Street, 20th Floor, Boston, MA 02109.

(21)

Based on a Schedule 13G filed jointly by FMR Corp., Edward C. Johnson, 3d and Fidelity Management & Research Company with the Securities and Exchange Commission on February 14, 2006. Fidelity Management & Research Company (‘‘Fidelity’’) a wholly-owned subsidiary of FMR Corp. and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 4,836,626 ordinary shares of the Company as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The number of ordinary shares of the Company owned by the investment companies at December 31, 2005 included 221,096 ordinary shares of the Company resulting from the assumed conversion of $4,800,000 principal amount of the Company’s senior convertible notes (46.0617 ordinary shares of the Company for each $1,000 principal amount of debenture). Edward C. Johnson 3d, FMR Corp., through its control of Fidelity, and the funds each has sole power to dispose of the 4,836,626 shares owned by the Funds. Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR Corp., has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds’ Boards of Trustees. Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp. and a bank as defined in Section 3(a)(6) of the Securities and Exchange Act of 1934, is the beneficial owner of 2,400 ordinary shares of the Company as a result of its serving as investment manager of the institutional account(s). Edward C. Johnson 3d and FMR Corp., through its control of Fidelity Management Trust Company, each as sole dispositive power over 2,400 ordinary shares of the Company and sole power to vote or to direct the voting of 2,400 ordinary shares of the Company owned by the institutional account(s) as reported above. Members of the Edward C. Johnson 3d family are the predominant owners of Class B shares of common stock of FMR Corp., representing approximately 49% of the voting power of FMR Corp. The Johnson family group and all other Class B shareholders have entered into a shareholders’ voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Accordingly, through their ownership of voting common stock and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR Corp. Fidelity International Limited and various foreign-based subsidiaries provide investment advisory and management services to a number of non-U.S. investment companies and certain institutional investors. Fidelity International Limited (‘‘FIL’’), and various foreign-based subsidiaries provide investment advisory and management services to a number of non-U.S. investment companies and certain institutional investors. FIL, which is a qualified institution under section 240.13d-1(b)(1) pursuant to an SEC No-Action letter dated October 5, 2000, is the beneficial owner of 350,000 ordinary shares of the Company. A partnership controlled predominantly by members of the family of Edward C. Johnson 3d, Chairman of FMR Corp. and FIL, or trusts for their benefit, owns shares of FIL voting stock with the right to cast approximately 38% of the total votes which may be cast by all holders of FIL voting stock. FMR Corp. and FIL are separate and independent corporate entities, and their Boards of Directors are generally composed of different individuals. FMR Corp. and FIL are of the view that they are not acting as a ‘‘group’’ for purposes of Section 13(d) under the Securities Exchange Act of 1934 (the ‘‘1934’’ Act) and that they are not otherwise required to attribute to each other the ‘‘beneficial ownership’’ of securities ‘‘beneficially owned’’ by the other corporation within the meaning of Rule 13d-3 promulgated under the 1934 Act. Therefore, they are of the view that the shares held by the other corporation need not be aggregated for purposes of Section 13(d).

(22)	Based on a Schedule 13G filed by Wells Fargo & Company and Wells Capital Management Incorporated with the Securities and Exchange Commission on March 3, 2006. The address of Wells Fargo & Company is 420 Montgomery Street, San Francisco, California 94104. The address of Wells Capital Management Incorporated is 525 Market Street, San Francisco, California 94105.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 31, 2004 (the ‘‘Closing Date’’), pursuant to the terms of the Securities Purchase Agreement, we issued to Cypress Merchant B Partners II (Cayman) L.P., Cypress Merchant Banking II-A C.V., 55th Street Partners II (Cayman) L.P. and Cypress Side-by-Side (Cayman) L.P. (collectively, the ‘‘Cypress Entities’’) (i) 3,953,183 ordinary shares (the ‘‘Ordinary Shares’’), (ii) Class C Warrants to purchase an aggregate of 3,206,431 ordinary shares (the ‘‘Class C Warrants’’) and (iii) $41,282,479 aggregate principal amount of 7.00% Convertible Junior Subordinated Notes due 2034 (the ‘‘Cypress Notes’’). The Class C Warrants were exercisable on receipt of shareholder and regulatory approvals. On April 7, 2005, our shareholders approved amendments to our Articles of Association permitting certain affiliates of The Cypress Group to own up to 24.9% of our ordinary shares and the issuance of ordinary shares to the Cypress Entities upon the conversion of the 7.0% Convertible Junior Subordinated Notes. With this shareholder approval, the Cypress Notes and accrued interest thereon were exchanged for Class C Warrants to purchase 2,170,896 ordinary shares. On May 4, 2005, the Cypress Entities obtained insurance regulatory approval in Delaware and the United Kingdom to hold more than 10% of our outstanding shares. On May 7, 2005 the Class C Warrants were exercised and converted into 5,377,327 ordinary shares. As of March 8, 2006, the Cypress Entities collectively hold 9,330,510 ordinary shares, approximately 17% of our issued and outstanding ordinary shares as the same date.

As long as the Cypress Entities continue to hold the lesser of (i) 9.9% or more of the voting power of our voting securities on an as-converted basis or (ii) 35% or more of the Purchased Securities on an as-converted basis, the Cypress Entities have the non-assignable right to designate one director and one non-voting observer to be appointed to our Board of Directors. Subject to satisfaction of applicable legal criteria, this director is also entitled to be on our Compensation Committee, Corporate Governance Committee and Investments Committee. On January 3, 2005, the Cypress Entities designated William Spiegel as a director. He currently serves on the Compensation, Corporate Governance and the Investments Committees. The Cypress Entities also designated Gene Lee as a non-voting observer. Mr. Spiegel and Mr. Lee were appointed to their respective positions on the Board of Directors effective January 3, 2005. In connection with the sale of the securities to affiliates of the Cypress Group, we paid on January 4, 2005 an equity commitment fee to the Cypress Advisors, Inc., an affiliate of the Cypress Group, in the amount of $2,000,000.

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MANAGEMENT COMPENSATION

Summary Compensation Table

The following table includes certain summary information concerning the compensation awarded to, earned by or paid for services rendered in all capacities during 2003, 2004 and 2005 by the Company’s Chief Executive Officer and the four most highly compensated executive officers who were serving as executive officers at the end of 2005.

								Annual Compensation												Long-Term Compensation
																				Awards								Payouts
Name and Principal Position				Year				Salary ($)				Bonus ($)				Other Annual Compensation ($)(1)				Restricted Stock Award(s) ($)(2)				Shares Underlying Options/ SARs (#)(3)				LTIP Payouts ($)				All Other Compensation (4)
Scott Willkomm (5)				2005					746,635				1,000,000	(6)			0				1,230,750				50,000								185,681	(7)
President and Chief Executive Officer				2004					575,000				750,000				0				0				0								111,812
				2003					510,000				300,000				0				0				0								67,784
Clifford Wagner (8)				2005					350,000				335,000	(9)			120,000	(10)			492,300				20,000								76,568	(11)
Executive Vice President and Chief Actuary				2004					300,000				175,000				120,000				0				0								64,531
				2003					250,000				90,000				0				0				0								151,750
Seth Vance (12)				2005					400,000				450,000	(13)			0				0				0								105,832	(14)
President and Chief Executive Officer — Scottish Holdings, Inc.				2004					292,308				385,000				0				1,519,000				125,000								73,993
Hugh McCormick				2005					450,000				500,000	(15)			160,172	(16)			1,163,000				50,000								63,975	(17)
Executive Vice President Corporate Development
Paul Goldean				2005					349,038				365,000	(18)			0				492,300				20,000								71,594	(19)
Executive Vice President And General Counsel				2004					300,000				175,000				0				0				0								63,659
				2003					210,000				100,000				0				0				0								37,990

(1)	Perquisites and personal benefits furnished to the named executive officers that do not meet the disclosure thresholds established under the Securities and Exchange Commission regulations are not included in this column.

(2)

Restricted shares granted pursuant to the 2004 Equity Incentive Plan are separated into two types: (a) restricted shares and (b) performance shares. Included in Messrs. Willkomm’s, Wagner’s and Goldean’s restricted stock awards were grants of 25,000, 10,000 and 10,000 shares respectively, all of which are performance shares that vest in total to the extent we achieve average annual operating earning per share growth of 10% over the period 2004 to 2006. Additionally, in order for the above performance goal to be deemed achieved, the operating earnings per share growth must be 10% or greater in either 2005 or 2006. Otherwise, restricted shares represent 25% of every grant (excluding options) and are time vested, with final cliff vesting occurring at the end of three years from the date of issuance and performance shares represent 75% of every grant and vest only to the extent performance goals are achieved over a three-year period. The performance shares will vest in total to the extent we achieve the following targets, in aggregate, for each of the years 2005 to 2007 (the ‘‘performance period’’): (a) 20% growth of operating earnings per share; (b) 14% growth of book value per share; and (c) an operating return on equity of 15%. Performance shares are granted at the end of the performance period.

(3)

Stock options granted prior to January 1, 2002 vest one-third each year commencing on the first anniversary of the grant, and stock options granted from January 1, 2002 to November 2, 2004 vest one-fifth each year commencing on the first anniversary of the grant. All stock options issued pursuant to the 2004 Equity Incentive Plan and all stock options issued after November 2, 2004 vest one-third each year commencing on the first anniversary of the date of grant.

(4)	Includes contributions on behalf of the named executive officers under the 401(k) plan, pension contributions and specified premiums paid by the Company for certain life, health and disability insurance arrangements covering the named executive officers.

(5)	Mr. Willkomm became Chief Executive Officer effective January 1, 2005 and has served as President since March 8, 2000.

(6)	Mr. Willkomm’s incentive bonus was approved by the Compensation Committee on February 16, 2006.

(7)	Represents 401(k) and pension contributions in the amount of $149,663, club membership dues in the amount of $7,132, and life, health and disability insurance expenses in the amount of $28,885.

(8)	Mr. Wagner became Executive Vice President and Chief Actuary on January 1, 2002 and served previously as Executive Vice President and Chief Actuary, Risk Management of Scottish Re (U.S.), Inc. from December 1999.

(9)	Mr. Wagner’s incentive bonus was approved by the Compensation Committee on February 16, 2006.

(10)	Represents a housing allowance as provided under Mr. Wagner’s employment agreement.

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(11)	Represents pension contributions in the amount of $64,500 and life, health and disability insurance expenses in the amount of $12,068.

(12)	Mr. Vance became Chief Executive Officer of Scottish Holdings, Inc. on April 5, 2004.

(13)	Mr. Vance’s incentive bonus was approved by the Compensation Committee on February 16, 2006.

(14)	Represents 401(k) and pension contributions in the amount of $65,000, club membership dues in the amount of $5,754 and life, health and disability insurance expenses in the amount of $35,078.

(15)	Mr. McCormick received a $200,000 signing bonus upon execution of his employment agreement. Mr. McCormick’s $300,000 incentive bonus for 2005 was negotiated as part of his employment agreement and was approved by the Compensation Committee on February 16, 2006.

(16)	Represents $99,565 in relocation benefits and $60,606.58 in gross ups for the payment of taxes.

(17)	Represents pension contributions in the amount of $45,000, club membership dues in the amount of $4,414 and life, health and disability insurance expenses in the amount of $14,561.

(18)	Mr. Goldean’s incentive bonus was approved by the Compensation Committee on February 16, 2006.

(19)	Represents 401(k) and pension contributions in the amount of $52,404 and life, health and disability insurance expenses in the amount of $19,190.

Options Granted During Fiscal Year 2005

The following table provides information related to options granted to the named executive officers during fiscal year 2005.

				Individual Grants (1)																Potential Realized Value at Assumed Annual Rate of Common Share Price Appreciation for Option Term (2)
Name				Number of Common Shares Underlying Options Granted				Percent of Total Options Granted to Employees				Exercise Price Per Share				Expiration Date				0%				5%				10%
Scott Willkomm					30,000				4.75	%		$	25.817				02/18/2015			$	(70,410	)		$	372,395			$	1,051,744
Paul Goldean					10,000				1.58				25.817				02/18/2015				(23,470	)			124,132				350,581
Hugh McCormick					50,000				7.92				25.586				02/01/2015				(116,300	)			615,104				1,737,222
Clifford Wagner					10,000				1.58				25.817				02/18/2015				(23,470	)			124,132				350,581
Seth Vance					—				—				—				—				—				—				—

(1)

The stock options issued between January 1, 2002 and November 2, 2004 under the Second Amended and Restated 1998 Stock Option Plan, the 1999 Stock Option Plan, the Harbourton Employee Options and the 2001 Stock Option Plan (the ‘‘Option Plans’’) are exercisable in five equal installments commencing the first anniversary of their issuance. All other options issued under the Option Plans or the 2004 Equity Incentive Compensation Plan are exercisable in three equal installments commencing on the first anniversary of their issuance.

(2)

The potential realizable value columns of the table above illustrate the value that might be realized upon exercise of the options immediately prior to the expiration of their terms, assuming the specified compounded rates of appreciation of the price of the ordinary shares over the terms of the options. The use of the assumed 5% and 10% returns is established by the Securities and Exchange Commission and is not intended by the Company to forecast possible future appreciation of the price of the ordinary shares.

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Options Exercised During Fiscal Year 2005 and Fiscal Year-End Option Values

The following table provides information, for each of the named executive officers, regarding the exercise of options during 2005 and unexercised options held as of December 31, 2005.

Name				Shares Acquired on Exercise				Value Realized				Number of Shares Underlying Unexercised Options/SARs December 31, 2005								Value of Unexercised In-the-Money Options/SARs at December 31, 2005
												Exercisable				Unexercisable				Exercisable				Unexercisable
Scott Willkomm					60,000			$	1,028,026				320,000				40,000			$	4,754,625			$	72,500
Paul Goldean					—				—				21,000				24,000				152,250				101,500
Hugh McCormick					—				—				—				50,000				—				—
Clifford Wagner					25,000				432,010				66,000				14,000				941,813				29,000
Seth Vance					—				—				41,667				83,333				28,334				56,666

Equity Compensation Plan Information

The following table provides information as of December 31, 2005 with respect to the Company’s equity compensation plans.

Plan Category				Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights				Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
				(a)				(b)				(c)
Equity compensation plans approved by security holders (1)					2,088,737			$18.20					440,029
Equity compensation plans not approved by security holders (2)					497,500			$14.78					59,225
Total					2,587,237			$17.54					499,254

(1)	Includes the 2001 Stock Option Plan and the 2004 Equity Incentive Compensation Plan.

(2)	Includes the Second Amended and Restated 1998 Stock Option Plan, 1999 Stock Option Plan and Harbourton Employee Options.

The equity plans set forth below have not been approved by the Company’s shareholders. The Second Amended and Restated 1998 Stock Option Plan was implemented in connection with the Company’s initial public offering in November 1998. The 1999 Stock Option Plan and Harbourton Employee Options are broad-based plans that were not required by rules applicable at the time the plans were put in place to be approved by the shareholders.

Second Amended and Restated 1998 Stock Option Plan. The plan became effective June 18, 1998. The plan provides for grants of nonqualified stock options to officers, employees, directors, advisors and consultants of the Company and its subsidiaries. The plan provides for automatic annual grants of 2,000 nonqualified stock options to non-employee directors. Grants to other participants are made at the discretion of the Compensation Committee. The plan requires that options be granted at not less than fair market value on the date of grant. Except with respect to the automatic grants to non-employee directors, which are fully vested at grant, options under the plan originally vested in tranches with one-third vesting on each of the first three anniversaries of the date of grant. Pursuant to a Compensation Committee resolution, all option granted between January 1, 2002 and November 3, 2004 vest in tranches with one-fifth vesting on each of the first five anniversaries of the date of grant. Pursuant to a Compensation Committee resolution, all option grants after November 3, 2004 vest in tranches with one-third vesting on each of the first three anniversaries of the date of grant. The participants’ options agreements may provide for accelerated vesting of options upon a change in control of the Company. Options granted under the plan have a maximum term of 10 years.

The plan is administered by the Compensation Committee. The plan may be amended or terminated at any time, but no termination of the plan may adversely affect the rights of participants under prior

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awards. The plan provides that the exercise price and number of shares subject to outstanding options will be appropriately adjusted upon a stock split, stock dividend, recapitalization, combination, merger, consolidation, liquidation, or similar transaction involving a change in the Company’s capitalization. The maximum number of shares that could be issued under the plan is 1,600,000 shares.

1999 Stock Option Plan. The plan became effective December 20, 1999. The plan provides for grants of nonqualified stock options to officers, employees, directors, advisors and consultants of the Company and its subsidiaries. The plan provides for automatic annual grants of 2,000 nonqualified stock options to non-employee directors. Grants to other participants are made at the discretion of the Compensation Committee. The plan requires that options be granted at not less than fair market value on the date of grant. Except with respect to the automatic grants to non-employee directors, which are fully vested at grant, options under the plan originally vested in tranches with one-third vesting on each of the first three anniversaries of the date of grant. Pursuant to a Compensation Committee resolution, all option granted between January 1, 2002 and November 3, 2004 vest in tranches with one-fifth vesting on each of the first five anniversaries of the date of grant. Pursuant to a Compensation Committee resolution, all option grants after November 3, 2004 vest in tranches with one-third vesting on each of the first three anniversaries of the date of grant. The participants’ options agreements may provide for accelerated vesting of options upon a change in control of the Company. Options granted under the plan have a maximum term of 10 years.

The plan is administered by the Compensation Committee. The plan may be amended or terminated at any time, but no termination of the plan may adversely affect the rights of participants under prior awards. The plan provides that the exercise price and number of shares subject to outstanding options will be appropriately adjusted upon a stock split, stock dividend, recapitalization, combination, merger, consolidation, liquidation, or similar transaction involving a change in the Company’s capitalization. The maximum number of shares that could be issued under the plan is 750,000 shares.

Harbourton Employee Options. The plan became effective December 20, 1999. The plan provides for grants of nonqualified stock options to officers, employees, directors, advisors and consultants of the Company and its subsidiaries. These options originally vested in tranches with one-third vesting on each of the first three anniversaries of the date of grant, provided that vesting is accelerated upon a change in control (as defined in the option agreements). Pursuant to a Compensation Committee resolution, all option granted between January 1, 2002 and November 3, 2004 vest in tranches with one-fifth vesting on each of the first five anniversaries of the date of grant. Pursuant to a Compensation Committee resolution, all option grants after November 3, 2004 vest in tranches with one-third vesting on each of the first three anniversaries of the date of grant. The options generally expire seven years from the date of grant, although they may expire earlier if the employee dies, retires, becomes permanently disabled or otherwise leaves the employ of the Company (in which case the options expire at various times ranging from 60 days to 2 years). The option agreements provide that the exercise price and number of shares subject to outstanding options will be appropriately adjusted upon a stock split, stock dividend, recapitalization, combination, merger, consolidation, liquidation, or similar transaction involving a change in the Company’s capitalization.

The Plan is administered by the Compensation Committee. The plan may be amended or terminated at any time, unless such termination would adversely effect the rights of the participants under prior awards. The plan provides that the exercise price and number of shares, subject to outstanding options will be appropriately adjusted upon a stock split, stock dividend, recapitalization, combination, merger, consolidation, liquidation or similar transactions involving a change in the Company’s capitalization. The maximum number of shares that could be issued under the plan is 750,000.

Compensation of Directors

Directors who are also our employees are not paid any fees or additional compensation for services as members of our Board or any committee thereof. In 2005, non-employee directors received cash in the amount of $65,000 per annum and $3,000 per Board or committee meeting attended. In addition, members of our Board received $500 per Board meeting attended that was held via teleconference, and an additional $500 if a teleconference meeting ran for one hour or longer. The chairman of the Audit

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Committee received a fee of $5,000 per meeting and the chairman of each of the other committees received a fee of $3,500 per meeting.

Employment and Change of Control Agreements

Scott Willkomm. Under his employment agreement, Mr. Willkomm has agreed to serve as President for a term commencing on July 8, 2002 and ending on July 8, 2005, to be automatically extended on each July 8 for an additional one year term, subject to 90 days’ advance written notice by either the Company or Mr. Willkomm of an intention not to renew the employment agreement. On January 1, 2005, Mr. Willkomm was appointed as Chief Executive Officer of the Company. No other terms of his employment agreement were modified.

Paul Goldean. Under his employment agreement, Mr. Goldean has agreed to serve as Executive Vice President and General Counsel for a term commencing on July 1, 2002 and ending on July 1, 2005, to be automatically extended on each July 1 for an additional one year term, subject to 90 days’ advance written notice by either the Company or Mr. Goldean of an intention not to renew the employment agreement.

Hugh McCormick. Under his employment agreement, Mr. McCormick has agreed to serve as Executive Vice President Corporate Development for a term commencing on February 1, 2005 and ending on February 1, 2008, to be automatically extended on each February 1 for an additional one year term, subject to 90 days’ advance written notice by either the Company or Mr. McCormick of an intention not to renew the employment agreement.

Seth Vance. Under his employment agreement, Mr. Vance agreed to serve as Chief Executive Officer of Scottish Holdings, Inc., for a term commencing on April 21, 2004 and ending on April 21, 2007, to be automatically extended on each April 21 for an additional one year term, subject to 90 days’ advance written notice by either the Company or Mr. Vance of an intention not to renew the employment agreement.

Clifford Wagner. Under his employment agreement, Mr. Wagner has agreed to serve as Executive Vice President and Chief Actuary for a term commencing on June 1, 2002 and ending on June 1, 2005, to be automatically extended on each June 1 for an additional one year term, subject to 90 days’ advance written notice by either the Company or Mr. Wagner of an intention not to renew the employment agreement.

Confidentiality. Each employment agreement provides that the executive will maintain in confidence all confidential matters and that the executive will not:

	•	during employment or, upon receipt of severance compensation upon termination of employment, for one year thereafter, participate in the management of any business enterprise that engages in substantial and direct competition with us; or

	•	during employment or for one year thereafter, attempt to influence, persuade or induce (or assist any other person in so persuading or inducing) any employee to leave us.

Severance. In addition, each executive is entitled to severance compensation in the event of:

	•	termination by us of the executive’s employment in any case other than death, disability or cause;

	•	termination by the executive of employment for ‘‘good reason’’ which shall mean

(A)	prior to a change in control:

	(i)	the Company’s failure to comply with any material provision of the employment agreement;

	(ii)	liquidations, dissolution, merger, consolidation or reorganization of the Company or all of its business and/or assets, unless a successor assumes all duties and obligations under the executive’s employment agreement; or

	(iii)	upon our notification to the executive of our intent not to renew the executive’s employment agreement at the expiration of the initial term or any anniversary thereafter.

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(B)	on or after a change in control:

	(i)	any of the events referenced above;

	(ii)	any material and adverse change to the executive’s duties or authority inconsistent with the executive’s title;

	(iii)	diminution of executive’s title or positions;

	(iv)	the relocation of executive’s office;

	(v)	a reduction of executive’s base salary; or

	(vi)	a mutual reduction of executive’s benefits.

In the case of Mr. McCormick, good reason prior to a change in control shall also be for any reason or without reason on or after November 29, 2009.

In the case of Messrs. McCormick and Willkomm, good reason after a change of control shall also be for any reason or without reason.

The minimum severance compensation that each executive will be entitled to upon any such termination includes a lump sum payment equal to either one (Messrs. Goldean and Wagner) or two (Messrs. McCormick, Willkomm, and Vance) times the sum of:

	•	the executive’s respective annual base pay at the highest rate in effect for any year prior to the termination; and

	•	the annual incentive compensation at the highest rate in effect for any year prior to the termination.

For Mr. Wagner, the sum listed above also includes the housing allowance at the highest rate in effect for any year prior to termination.

Change of Control. In the instance of a change of control, each executive will be entitled to a lump sum payment equal to three times the sum of:

	•	the executive’s respective annual base pay at the highest rate in effect for any year prior to the termination; and

	•	the annual incentive compensation at the highest rate in effect for any year prior to termination.

For Mr. Wagner, the sum listed above also includes the housing allowance at the highest rate in effect for any year prior to termination.

Compensation Committee Interlocks and Insider Participation

During fiscal year 2005, the Compensation Committee had responsibility for our executive compensation practices and policies. No officer or employee of the Company or its subsidiaries is a member of the Compensation Committee.

REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board had responsibility for our executive compensation practices and policies in 2005. The three directors on the Compensation Committee were independent, outside directors. Of the nine directors on the Board at the end of 2005, seven were independent, outside directors who were not officers or employees.

Executive Pay Policy and Objectives

Our compensation is intended to attract, retain and motivate the key people necessary to lead us to achieve our strategic objective of increased shareholder value over the long term, reflecting our belief that executive compensation should seek to align the interests of our executives with those of our shareholders.

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In addition, we believe compensation should be determined within a competitive framework based on overall financial results, teamwork and individual contributions that help build shareholder value. The primary objectives of our compensation program are to:

	•	provide a direct link between pay and performance;

	•	allocate a larger percentage of executive compensation to pay that is conditional or contingent in order to positively influence behavior and support accountability;

	•	offer total compensation opportunities that are fully competitive with external markets in design and pay level; and

	•	emphasize the need to focus on shareholder value, in addition to providing competitive value to our customers.

Our compensation program utilizes four components to meet our compensation objectives: base salary, bonuses, short-term incentives and long-term compensation in the form of restricted shares and stock options.

In establishing base salaries, we have adopted a strategy of setting executive salaries at or above market to retain and attract key executives, while providing incentive compensation pay opportunities, based on performance achievement. We set the salary ranges in this manner to ensure that our base salary practices do not put us at a competitive disadvantage in retaining and attracting key executives while ensuring an appropriate cost structure.

Annual bonus compensation is based on individual and corporate performance during the prior fiscal year in relationship to performance targets. Under their respective employment contracts, each executive is eligible to receive a cash bonus at the sole discretion of the Board. Factors taken into consideration include, but are not limited to, ordinary share performance relative to our industry peer group, revenue and earnings growth, investment management results, return on shareholder equity and other key financial and operational measures. The bonuses awarded in 2005 were based on the aforementioned factors and were consistent with the level of accomplishment and appropriately reflected individual and Company performance in 2005.

We believe that our current program of a base salary, bonuses and long- and short- term performance-based compensation that can be earned by our executive officers will increase long-term shareholder value.

Base Salary and Bonuses

The Board has reviewed and adjusted the salaries of its named executive officers for 2006. Messrs. Goldean’s, Vance’s, and Wagner’s 2006 annual base salary was increased to $450,000, $550,000 and $450,000, respectively. Messrs. Willkomm’s and McCormick’s annual base salary for 2006 was not increased. In February 2006 the Company paid Messrs. Willkomm, Goldean, McCormick, Vance, and Wagner a bonus in the amount of $1,000,000, $365,000, $300,000, $450,000 and $335,000, respectively, in recognition of the performance and contribution of each to our business in 2005.

The base salary adjustments for Messrs. Goldean, Vance, and Wagner for 2006 were determined by the Compensation Committee’s evaluation of their individual contributions toward the creation of shareholder value and the competitive market for the services of individuals possessing their skills and experience. Bonuses awarded to the above named executives were determined upon the same factors used for all executive management of the Company, including but not limited to our ordinary share performance, revenue and business growth, investment management results, return on shareholders’ equity and growth of our operating income.

Compensation of Chief Executive Officer

Mr. Willkomm has served as the Company’s Chief Executive Officer since January 1, 2005. The Compensation Committee approved all components of Mr. Willkomm’s 2005 compensation. The compensation reported for Mr. Willkomm in the compensation tables and discussed in this report represents amounts paid for Mr. Willkomm’s services in 2005.

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Mr. Willkomm’s 2005 compensation was determined pursuant to the same policy and philosophy used for all executive officers. In determining Mr. Willkomm’s total compensation for 2005, the Compensation Committee reviewed the strong financial results of the Company, Mr. Willkomm’s superior leadership during his tenure, his industry experience, his role in the continued strategic positioning of the Company and achievement of operational goals.

Equity Compensation

Prior to February 11, 2002, the Option Committee oversaw the administration of the Equity Compensation Plans. The Equity Compensation Plans are designed to provide incentive compensation to our directors, executive officers, and other key employees, consultants and advisors. Since February 11, 2002 the Compensation Committee has overseen the administration of the Option Plans.

The foregoing report on executive compensation is provided by the Compensation Committee of the Board of Directors of the Company during 2005:

Bill Caulfeild-Browne
Hazel O’Leary
William Spiegel

Code of Ethics

We have adopted a Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer, senior officers of the Company and certain other financial executives, which is a ‘‘code of ethics’’ as defined by applicable rules of the SEC. We have also adopted a Business Code of Conduct applicable to all officers, directors and employees of the Company. A copy of our Code of Ethics and/or our Business Code of Conduct may be obtained without charge by written request to the attention of the Secretary of Scottish Re Group Limited, P.O. Box HM 2939, Crown House, Third Floor, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda, or on our website at www.scottrshre.com.

Performance Graph

The following graph compares the cumulative shareholder return on our ordinary shares with the Standard & Poor’s 500 Stock Index, Standard & Poor’s (Life/Health) Index. The indices are included for comparative purposes only, do not necessarily reflect management’s opinion that such indices are an appropriate measure of relative performance of the Company’s ordinary shares, and are not intended to forecast or be indicative of future performance of the ordinary shares. The comparison assumes $100 was invested as of November 24, 1998 (the date our ordinary shares began trading on a ‘‘when issued’’ basis) and the reinvestment of all dividends. The closing market price of the Company’s ordinary shares on Friday, December 30, 2005 was $24.55 per share.

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Comparison of Cumulative Shareholder Return

Total Return To Shareholders
(Includes reinvestment of dividends)

ANNUAL RETURN PERCENTAGE
Years Ending

Company / Index

Dec 01

Dec 02

Dec 03

Dec 04

Dec 05

SCOTTISH RE GROUP LIMITED

63.46

−8.77

20.29

25.75

−4.42

S&P 500 INDEX

−11.89

−22.10

28.68

10.88

4.91

S&P 500 LIFE & HEALTH INSURANCE

−7.73

−16.23

27.09

22.15

22.51

INDEXED RETURNS
Years Ending

Company / Index				Base Period Dec 00				Dec 01				Dec 02				Dec 03				Dec 04				Dec 05
SCOTTISH RE GROUP LIMITED					100				163.46				149.13				179.38				225.58				215.61
S&P 500 INDEX					100				88.11				68.64				88.33				97.94				102.75
S&P 500 LIFE & HEALTH INSURANCE					100				92.27				77.29				98.23				119.99				147.00

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PROPOSAL FOR RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
(Proposal No. 2)

On February 15, 2006, the Audit Committee selected, and the Board unanimously approved the selection, subject to ratification by the Company’s shareholders, of Ernst & Young LLP to continue to serve as independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending December 31, 2006. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since 1998.

Representatives of Ernst & Young LLP are expected to be present at the Annual General Meeting and will have the opportunity to make statements and to respond to appropriate questions raised at the Annual General Meeting.

Ratification of the independent registered public accounting firm requires the affirmative vote by ordinary resolution of the holders of at least a majority of the issued and outstanding ordinary shares of the Company present and voting in person or by proxy at the Annual General Meeting. Abstentions and broker non-votes will be deemed present and entitled to vote but will not be counted as a vote for or against ratification of the independent registered public accounting firm, and therefore will not have the effect of a vote against ratification of the independent registered public accounting firm. The Company intends to conduct all voting at the Annual General Meeting by poll.

Audit Committee Report

On May 31, 2002, the Board adopted an Audit Committee Charter, which was last reviewed and amended on February 15, 2006. A copy of this amended Audit Committee Charter is included as Annex B to this Proxy Statement. The Audit Committee is currently composed of five outside directors who are not officers of employees of the Company or its subsidiaries. All members of the Audit Committee are independent as defined by Section 303 of the New York Stock Exchange Listed Company Manual.

As more fully described in the Audit Committee Charter, the Audit Committee reviews the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process. The Company’s independent registered public accounting firm is responsible for performing an audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and expressing an opinion on the conformity of the financial statements to generally accepted accounting principles. Additionally, the independent registered public accounting firm is responsible for performing an audit of management’s assessment of internal control over financial reporting and an audit of the effectiveness of the internal control over financial reporting. The internal auditors are responsible to the Audit Committee for testing the integrity of the financial accounting and reporting control systems and such other matters as the Audit Committee determines.

The Audit Committee has reviewed and discussed with the Company’s management and Ernst & Young LLP, the Company’s independent registered public accounting firm, the audited financial statements and the report on the audit of internal control over financial reporting contained in the Company’s Annual Report to Shareholders on Form 10-K for the year ended December 31, 2005. The Audit Committee has also discussed with the Company’s independent registered public accounting firm the matters required to be discussed pursuant to SAS No. 61 and SAS No. 90 (Codification of Statements on Auditing Standards, Communication with Audit Committees).

The Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young LLP required by Independence Standards Board Standard No. 1 (‘‘Independence Discussions with Audit Committees’’), and has discussed with Ernst & Young LLP their independence. The Audit Committee has also considered whether the provision of non-audit services to the Company by Ernst & Young LLP is compatible with maintaining their independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

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The foregoing report is provided by the following independent directors who constitute the Audit Committee:

Michael Austin				Lord Norman Lamont				Robert Chmely (Chairman)
Jean Claude Damerval				Hazel O’Leary

Fees Billed to the Company by Ernst & Young LLP

The following is a description of the fees billed to the Company by Ernst & Young LLP during the years ended December 31, 2004 and 2005:

Audit Fees.    Audit fees include fees paid in connection with the annual audit of the Company’s financial statements and internal control, audits of subsidiary financial statements and review of interim financial statements. Audit fees also include fees for services that are closely related to the audit and in many cases could only be provided by our independent registered public accounting firm. Such services include comfort letters and consents related to Securities and Exchange Commission registration statements and other capital raising activities and certain reports relating to regulatory filings. The aggregate fees billed to the Company by Ernst & Young LLP for audit services for the years ended December 31, 2004 and December 31, 2005 totaled approximately $2,498,000 and $1,800,000, respectively.

Audit-Related Fees.    Fees for audit related services include due diligence services related to mergers and acquisitions and accounting consultations. The aggregate fees billed to the Company by Ernst & Young LLP for audit relating services for the years ended December 31, 2004 and December 31, 2005 totaled approximately $1,184,000 and $710,000, respectively.

Tax Fees.    Tax fees include corporate tax compliance, counsel and advisory services, and tax planning. The aggregate fees billed to the Company by Ernst & Young LLP for tax related services for the years ended December 31, 2004 and December 31, 2005 totaled approximately $1,004,000 and $1,675,000, respectively.

All Other Fees.    Fees billed to the Company by Ernst & Young LLP for all non-audit services rendered to the Company during the years ended December 31, 2004 and December 31, 2005 totaled approximately $305 and $132,000 respectively.

The Audit Committee has considered whether the provision of non-audit services by Ernst & Young LLP is compatible with maintaining Ernst & Young LLP’s independence with respect to the Company and has determined that the provision of non-audit services is consistent with and compatible with Ernst & Young LLP maintaining its independence.

Pre-Approval Policy for Ernst & Young Services

The policy of the Audit Committee is to pre-approve all audit and non-audit services of Ernst & Young LLP during the fiscal year. The Audit Committee pre-approves such services by authorizing specific projects and categories of services, subject to a specific budget for each category. The Audit Committee Chairman has the authority to address specific requests for pre-approval of services between Audit Committee meetings, and must report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

Vote Required

The required vote for the ratification of the independent registered public accounting firm is the affirmative vote by ordinary resolution of the holders of at least a majority of the issued and outstanding ordinary shares of the Company present and voting in person or by proxy at the Annual General Meeting. The Company intends to conduct all voting at the Annual General Meeting by poll.

THE BOARD RECOMMENDS A VOTE ‘‘FOR’’ RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s officers and directors and persons who own more than 10% of a registered class of the Company’s equity securities to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission (the ‘‘SEC’’). Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms received by it with respect to fiscal year 2005, or written representations from certain reporting persons, during the year ended December 31, 2005, all Section 16(a) filing requirements applicable to the directors, officers and greater than 10% shareholders were complied with by such persons with the exception of the following: Michael French, Paul Goldean, David Huntley, Thomas McAvity, Jr., Hugh McCormick, Elizabeth Murphy, Oscar Scofield, Seth Vance, Clifford Wagner and Scott Willkomm each filed a late Form 4 due to a delay in the resolution of issues regarding the issuance of restricted share units. David Huntley, Scott Willkomm and Michael Austin each filed a late Form 4 due to delays in obtaining and processing the necessary information. Gene Lee and Hugh McCormick each filed a late Form 3 and Form 4 due to a delay in resolution of issues regarding the issuance of the initial grant of options to directors.

SHARED ADDRESS SHAREHOLDERS

With respect to eligible shareholders who share a single address, the Company is sending only one annual report to shareholders and proxy statement to that address unless the Company received instructions to the contrary from any shareholder at that address. This practice, known as ‘‘householding,’’ is designed to reduce the Company’s printing and postage costs. However, if a shareholder of record residing at such address wishes to receive a separate annual report to shareholders or proxy statement in the future, he or she may contact Scottish Re Group Limited, P.O. Box HM 2939, Crown House, Third Floor, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda, Attn: Secretary. Eligible shareholders of record receiving multiple copies of the Company’s annual report to shareholders or proxy statement can request householding by contacting the Company in the same manner. Shareholders who own shares through a bank, broker or other nominee can request householding by contacting the nominee.

The Company hereby undertakes to delivery promptly, upon written request, a copy of the annual report to shareholders, or proxy statement, as applicable, to a shareholder at a shared address to which a single copy of the document was delivered. Requests should be directed to the address set forth above.

ANNUAL REPORT

The Annual Report on Form 10-K of the Company, accompanies this proxy statement. The Annual Report on Form 10-K is not to be deemed part of this Proxy Statement. Upon written request of a shareholder, the Company will furnish, without charge, a copy of the Company’s Annual Report on Form 10-K, as filed with the SEC. If you would like a copy of this Annual Report, please contact Scottish Re Group Limited, P.O. Box HM 2939, Crown House, Third Floor, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda, Attn: Secretary.

By Order of the Board of Directors,

Scott E. Willkomm President and Chief Executive Officer

Hamilton, Bermuda
April 3, 2006

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Annex A

Scottish Re Group Limited

Corporate Governance/Nominating Committee Charter

A-1

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CORPORATE GOVERNANCE / NOMINATING COMMITTEE CHARTER
ORGANIZATION AND RESPONSIBILITIES

Committee's Purpose

The Corporate Governance/Nominating Committee (the ‘‘Committee’’) is appointed by the Board of Directors of Scottish Re Group Limited (the ‘‘Board’’), in consultation with the Chairman/CEO, to (a) identify and make recommendations to the Board on individuals qualified to serve as Board members of Scottish Re Group Limited (‘‘Company’’); (b) develop and recommend to the Board a set of Corporate Governance Guidelines applicable to the Company; (c) take a leadership role in shaping the corporate governance of the Company; (d) review and recommend the renomination of incumbent directors; (e) review and recommend committee appointments; (f) lead the Board in its annual review of the Board's performance; and (g) perform other related tasks, such as studying the size, committee structure, or meeting frequency of the Board.

Committee Organization and Membership

The Board shall, in consultation with the Chairman/CEO, select three or more of its members to the Committee. All members of the Committee shall meet the ‘‘independence’’ requirements of the New York Stock Exchange (‘‘NYSE’’). Each member shall serve at the pleasure of the Board and for such term or terms as the Board shall determine.

Committee Chairman

The Board will, or will delegate to the members of the Committee, the responsibility to appoint a chairman of the Committee (the ‘‘Chairman’’). The Chairman shall (a) chair all meetings of the Committee; (b) coordinate an annual performance evaluation of the Board; and (c) perform such other activities as from time to time are requested by the other directors or as circumstances indicate.

Meetings

The Committee will meet, when reasonably practicable, at least four times a year. The agenda of each meeting will be, whenever reasonably practicable, circulated to each member prior to the meeting date.

Committee's Goals and Responsibilities

1.	The Committee shall establish the Board's criteria for selecting new directors.

2.	The Committee shall provide oversight of the evaluation of the Board, the committees and management.

3.	The Committee shall provide an annual performance evaluation of the Board and committees.

4.	The Committee shall make regular reports to the Board.

5.	The Committee shall review Committee member qualifications, appointments to and removal from the Committee, Committee structure, and Committee operations (including the Committee’s authority to delegate to subcommittees).

6.	The Committee shall have sole authority to retain and terminate any search firm to be used to identify director candidates and shall have sole authority to approve the search firm's fees and other retention terms.

7.	The Committee shall lead the Board in its annual performance evaluation, including, soliciting comments from all directors, preparing a report to the Board with an assessment of the performance of the Board and making recommendations for improvements of the Board's operations.

8.	The Committee shall lead the Board in its annual review of the skills and characteristics of individual Board members as well as the composition of the Board as a whole, including assessments of independence of nonmanagement directors, and shall take action to effect changes in incumbent directors if deemed appropriate.

A-2

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9.	The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.

10.	The Committee shall conduct an annual performance evaluation of the Committee and report the results to the Board.

Procedural Matters

One-third of the members, but not less than two, will constitute a quorum. A majority of the members present at any meeting at which a quorum is present may act on behalf of the Committee. The Committee will meet at such times as shall be determined by its Chairperson, or upon the request of any two of its members. The Chairperson will preside, when present, at all meetings of the Committee. The Committee will keep a record of its meetings and report on them to the Board. The Committee may meet by telephone or video conference and may take action by written consent.

A-3

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Annex B

Scottish Re Group Limited

Audit Committee Charter

B-1

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INDEX

				Page
Mission Statement					B-3
Organization					B-3
•        Size of Committee					B-3
•        Membership Qualifications					B-3
•        Frequency of Meetings					B-4
•        Appointment of Committee					B-4
•        External Auditor					B-4
Members of the Audit Committee					B-4
Audit Committee Roles and Responsibilities					B-5
Reporting Responsibilities					B-6
Procedural Matters					B-6

B-2

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Mission Statement

The Audit Committee (‘‘Committee’’) is established to assist the Board of Directors (‘‘Board’’) of Scottish Re Group Limited (‘‘Company’’) in fulfilling its oversight responsibilities relating to (a) the quality and acceptability of the accounting for the Company's financial position and results of operations, (b) compliance with legal and regulatory requirements, (c) the external auditor’s qualifications and independence, (d) performance of the Company’s internal audit function and external auditors, and (e) preparation of all necessary reports the SEC may require to be included in the Company’s annual proxy statement as well as such other matters as may from time to time be specifically delegated to the Committee by the Board.

While the Committee has the powers and responsibilities set forth in this Charter and the Company's Memorandum and Articles of Association, it is not the responsibility of the Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate or are in compliance with generally accepted accounting principles, which is the responsibility of management and the external auditor. Likewise, it is not the responsibility of the Committee to conduct investigations, to resolve disputes, if any, between management and the external auditor. Management has the responsibility for preparing financial statements and internal controls and the external auditor has the responsibility for auditing the financial statements.

In performing its duties, the Committee will maintain effective working relationships with the Board, management, and the internal and external auditors. In carrying out its responsibilities, the Committee will maintain flexible policies and procedures in order to best react to a changing environment. To effectively perform his or her role, each Committee member will obtain an understanding of the responsibilities of Committee membership as well as the Company's business operations, and risks. The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and has the ability to retain special legal, accounting, or other consultants or experts it deems necessary in the performance of its duties.

Organization

Size of Committee

The Committee will be comprised of at least three directors, but the exact size of the Committee will be subject to future review. The Committee will elect one of its members to serve as Chairman of the Committee (the ‘‘Chairman’’) on an annual basis. The retiring Chairman may, however, be re-elected.

Membership Qualifications

All of the Committee Members shall meet the following requirements:

(i)	Shall be independent of management and free from any relationship with the Company that would interfere with the exercise of independent judgment as a Committee Member. In determining independence, the Board will observe the requirements of Sections 303A.02 of the NYSE Listed Company Manual.

(ii)	Shall be financially literate or must become financially literate within a reasonable period of time after appointment to the Committee. The Board will determine, in its business judgment, whether a director meets the financial literacy requirement.

(iii)	At least one member of the Committee must have accounting or related financial management expertise, as determined by the Board in its business judgment.

(iv)	A director who meets the definition of independence mandated for a Committee Member but who also holds 20% or more of the Company’s stock (or who is a general partner, controlling shareholder or officer of any such holder) cannot chair, or be a voting member of, the Committee.

(v)	Committee Members are prohibited from receiving any consulting, advisory or compensation fees from the Company.

In addition, one member of the Committee shall qualify as a ‘‘financial expert,’’ subject to the SEC’s definition of ‘‘financial expert.’’

B-3

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Frequency of Meetings

The Committee shall meet at least four times a year or more frequently as it may determine necessary, to comply with its responsibilities as set forth herein. The Committee may request any officer or employee of the Company or the Company’s outside legal counsel or external auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee may meet with management, the external auditors and others in separate private sessions to discuss any matter that the Committee, management, the external auditor or such other persons believe should be discussed privately.

Appointment of Committee

The Board will appoint the members of the Committee. The Board will, or will delegate to the members of the Committee the responsibility to, appoint a Chairman. The Chairman will, in consultation with the other members of the Committee, the Company's external auditor and the appropriate officers of the Company, be responsible for calling the meetings of the Committee, establishing agenda therefore and supervising the conduct thereof.

External Auditor

The external auditor for the Company is ultimately accountable to the Board and the Committee. The Committee and the Board have the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the external auditor. Alternatively, the Committee and the Board may nominate the external auditor to be proposed for shareholder approval in any proxy statement.

Internal Auditor

The Senior Internal Auditor Executive is ultimately accountable to the Chairman of the Committee.

Members of the Audit Committee

The Committee members appointed by the Board are as follows:

Michael Austin¹

Robert M. Chmely

Jean Claude Damerval

Lord Norman Lamont

1	Michael Austin was elected Chairman of the Audit Committee on 28th April 1999.

B-4

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Audit Committee Roles and Responsibilities

•

Review and confirm the independence of the external auditor by reviewing, among other things, information related to the non-audit services provided and expected to be provided as well as the external auditor’s assertion of independence in accordance with professional standards. The Committee is responsible for (1) ensuring the external auditor submits on a periodic basis to the Committee a formal written statement affirming its independence and delineating all relationships between the external auditor and the Company, (2) actively engaging in dialogue with the external auditor with respect to any disclosed relationship or services that may impact the objectivity and independence of the external auditor, and (3) taking, or recommending that the Board take, appropriate action to oversee the independence of the external auditor.

•	Review the audit fee, the external auditor’s non-audit services and facts related to the independence of the external auditor such as the extent to which non-audit services have been performed.

•	Select, evaluate and where appropriate, replace the external auditor. The Committee shall have sole authority to approve the audit engagement fees and terms as well as all significant non-audit related engagements of the external auditor.

•	Nominate the external auditor for shareholder approval in any Company proxy statement.

•	Gain an understanding of whether internal control recommendations made by the external auditor have been implemented by management.

•

Review with management, the external auditor, the senior internal auditing executive, the General Counsel and, to the extent deemed appropriate by the Chairman, members of their respective staffs, the adequacy and effectiveness of the Company's internal accounting controls, the Company's financial, auditing and accounting organizations and personnel and the Company’s policies and compliance procedures with respect to business practices.

•	Elicit recommendations, if any, from the external auditor for improvements or additions to the Company’s internal control procedures.

•	Ensure that the external auditor keeps the Committee informed about the results of their procedures relating to fraud, illegal acts, and deficiencies in internal control.

•	Review, after consultation with the external auditor and management, the audit plan, scope and procedures.

•	Review the financial statements contained in the annual report with management and the external auditor to determine if the external auditor is satisfied with the disclosures and content to be presented to shareholders.

•	Meet with the external auditor, internal auditor or management privately to discuss any matters that the Committee, the external auditor, internal auditor or management believe should be discussed privately.

•	Review and reassess the Committee’s Charter on an annual basis.

•	Set clear hiring policies for employees or former employees of the external auditors.

•	Be satisfied that all regulatory compliance matters have been considered in the preparation of the financial statements.

•	Require the Company to set up and maintain an internal audit function.

•	Oversee the internal audit function including review of the organization, responsibilities, plans and results. Approve and recommend to the Board of Directors the appointment and retention of the Senior Internal Audit Executive. The Committee will, at least annually, review and concur with the compensation of the Senior Internal Audit Executive.

•	Conduct an annual performance evaluation of the Committee. The Committee shall review: (a) major issues regarding accounting principles and financial statement presentations, including any significant

B-5

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changes in the Company's selection or application of accounting principles, and major issues as to the adequacy of the Company's internal controls and any special audit steps adopted in light of material control deficiencies; (b) analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; (c) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures on the financial statements of the Company; and (d) earnings press releases (paying particular attention to any use of ‘‘pro forma,’’ or ‘‘adjusted’’ non-GAAP, information).

•	Review such other matters in relation to the accounting, auditing and financial reporting practices and procedures of the Company as the Committee may, in its own discretion, deem desirable.

•	Obtain advice and assistance, as appropriate, from outside legal, accounting and other advisors to review any matter under its responsibility. The Committee shall have full authority and funding for such engagements.

•	Make recommendations to the Board on any such matters within the scope of its function, as the Committee believes warrant consideration by the Board.

•	Establish procedures for handling complaints regarding the Company’s accounting practices and for confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Reporting Responsibilities

Regularly update the Board about Committee activities and make appropriate recommendations.

The Committee will prepare, with the assistance of management, the external auditor and legal counsel, a report for inclusion in the Company's proxy or information statement relating to the annual meeting of security holders at which directors are to be elected that complies with the requirements of the federal securities laws.

Procedural Matters

One-third of the members, but not less than two, will constitute a quorum. A majority of the members present at any meeting at which a quorum is present may act on behalf of the Committee. The Committee will meet as such times as shall be determined by its Chairperson, or upon the request of any two of its members. The Chairperson will preside, when present, at all meetings of the Committee. The Committee will keep a record of its meetings and report on them to the Board. The Committee may meet by telephone or video conference and may take action by written consent.

B-6

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Annual Meeting Proxy Card

A. ELECTION OF FOUR CLASS II DIRECTORS

1.	ELECTION OF FOUR CLASS II DIRECTORS to serve until Scottish Re Group Limited's 2009 Annual General Meeting of Shareholders. The nominees are Michael Austin, Lord Norman Lamont, Glenn Schafer and Scott Willkomm. The Board of Directors recommends a vote FOR the listed nominees.

					For				Withhold
	01 - Michael Austin
	02 - Lord Norman Lamont
	03 - Glenn Schafer
	04 - Scott Willkomm

B. INDEPENDENT AUDITORS

The Board recommends a vote FOR the following proposal:

For

Against

Abstain

2.

Ratification of Ernst & Young LLP as independent registered public accounting firm.

C. Authorized Signatures - Sign Here - This section must be completed for your instructions to be executed.

This Proxy when executed will be voted in the manner directed herein. If no direction is made, this Proxy will be voted "FOR" the election of the Director nominees in Proposal 1 and "FOR" the Ratification of Ernst & Young LLP as independent registered public accounting firm in Proposal 2.

IMPORTANT: Whether or not you expect to attend the meeting in person, please date, sign and return this proxy. Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.

    0   0   8   0   1   1                       1   U   P   X                                                C   O   Y               &nbs ;        

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Proxy - SCOTTISH RE GROUP LIMITED

The undersigned acknowledge(s) receipt of the Proxy Statement of Scottish Re Group Limited (the "Company") relating to the 2006 Annual General Meeting of Shareholders (the "Annual General Meeting") and hereby constitute(s) and appoint(s) Scott E. Willkomm and Paul Goldean, attorneys and proxies of the undersigned, with full power of substitution and resubstitution to each and with all the powers the undersigned would possess if personally present, to vote for and in the name and place of the undersigned all ordinary shares of the Company held or owned by the undersigned, or standing in the name of the undersigned, at the Annual General Meeting to be held on Wednesday, May 3, 2006, commencing at 11:00 a.m. Bermuda time, at the Elbow Beach Clud Resort, 60 South Shore Road, Paget Parish, Bermuda, or any adjournment or postponement thereof, upon the matters referred to in the Proxy Statement for the Annual General Meeting as stated below and on the reverse side. The proxies are further authorized to vote, in their discretion, upon such other business as may properly come before the Annual General Meeting or any adjournment or postponement thereof. A majority of said attorneys and proxies present and acting at the Annual General Meeting (or if only one shall be present and act, then that one) shall have, and may exercise, all the powers of all said attorneys and proxies hereunder.

This proxy is being solicited on behalf of the Board of Directors of Scottish Re Group Limited. Unless otherwise specified below or on the reverse side, this proxy will be voted "FOR" the Class II nominees to the Board of Directors listed on the reverse side and "FOR" the ratification of Ernst & Young as Scottish Re Group Limited's independent registered public accounting firm. Discretionary authority is hereby conferred as to all other matters that may come before the Annual General Meeting.

Regardless of whether you plan to attend the Annual General Meeting, you can be sure your shares are represented at the Annual General Meeting by promptly returning your proxy in the enclosed envelope.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.

Please date and sign on reverse side and return in the enclosed postage-paid envelope.

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