ADMINISTRATION AGREEMENT

(1)

GREENLIGHT CAPITAL RE, LTD. a company incorporated under the laws of the Cayman Islands whose registered office is at the offices of the Administrator specified immediately below (the “Company”); and

(2)

HSBC FINANCIAL SERVICES (CAYMAN) LIMITED, a company incorporated under the laws of the Cayman Islands whose registered office is at Strathvale House, 90 North Church Street, P.O. Box 1109GT, George Town, Grand Cayman, Cayman Islands, British West Indies (the “Administrator”).

(A)

The Company is an exempted company established in the Cayman Islands and empowered under the laws of the Cayman Islands to issue and repurchase its own Shares (as defined below).

(B)

The Company has requested the Administrator to provide in the Cayman Islands certain administrative, accounting and banking services which the Administrator has agreed to do subject to the terms and conditions hereinafter appearing.

1.

In this Agreement the following words shall have the following meanings, if not inconsistent with the subject or context:

Words

Meanings

“Articles”

the memorandum of association and articles of association of the Company for the time being in force;

“Directors”

the directors of the Company for the tune being or as the case may be the directors assembled as a board;

“Offering Memorandum”

the offering memorandum or other offering document pursuant to which and on the terms and conditions of which the Shares are offered for subscription, as amended or supplemented from time to time;

“Register”

the register of members of the Company;

“Shareholders’ Agreement”

shareholders’ agreement dated as of Aug. 11, 2004, by and among, the Company and each of the other signatories thereto;

“Shares”

ordinary shares (including Class A Ordinary Shares and Class B Ordinary Shares) of the Company in connection with which the Administrator has been engaged to provide the services contemplated hereby.

“Subscription Agreement”

subscription agreement dated as of the date of the last signature between the Company and the Subscribee thereto.

2.

The clause headings are included for convenience only and shall not affect the interpretation of this Agreement. References to any provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time.

3.

The Company hereby appoints the Administrator to be, and the Administrator hereby agrees to act as, administrator of the Company in accordance with the Articles and the terms of this Agreement.

4.

All activities engaged in under the provisions of this Agreement by the Administrator on behalf of the Company shall be subject to the overall policies, directions and control of the Directors.

5.

The Company hereby retains the Administrator and the Administrator agrees to provide such services as are, and subject to the terms and conditions, hereinafter set forth. The Administrator will not have any responsibility or authority to make investment decisions, nor to render any investment advice. The Company shall promptly supply to the Administrator, or shall arrange for the Administrator to be supplied with, all such information, documents and instructions as are required by the Administrator to fulfil its obligations hereunder.

6.

The Administrator shall:

(a)

provide general banking services in such a manner as may be agreed upon in writing from time to time;

(b)

at its own expense, provide or procure such office accommodation, secretarial staff and other facilities as may be required for the purpose of fulfilling its duties wider this Agreement;

(c)

on behalf of the Company determine in accordance with the Offering Memorandum and the Articles and directions in that regard from the Directors and notify the Company of the book value per share to be used in calculating the issue price and repurchase price (howsoever defined in the Articles) of any Share of the Company to be issued or repurchased in accordance with the Articles;

(d)

in providing the information set forth in clause (c), be allowed to rely upon information provided to it by or on behalf of the Company and/or any investment manager, investment adviser, custodian or other service provider thereto and shall not be required to independently verify or compute such information;

(e)

provide registered office facilities, such facilities will include the filing of the Cayman Islands annual return form, and all necessary filings required by the Companies Law of the Cayman Islands;

(f)

receive on behalf of the Company requests for the issue or repurchase of Shares and promptly notify the Directors of the same and deal therewith in accordance with the provisions of this Agreement, the Articles and the Subscription Agreement and, in particular, on receipt of the relevant subscription moneys or on receipt from the Company of confirmation that the necessary subscription moneys have been received shall arrange to allot and issue Shares and/or transfer previously issued Shares, as appropriate, in order to satisfy the relevant applications;

(g)

prepare and submit regular reports not less frequently than monthly to the Company in respect of the Company’s business in such form as may be agreed upon from time to time;

(h)

maintain adequate systems for the verification or identification of all persons interested in the Shares or other securities of the Company, whether beneficially or otherwise, and record the evidence establishing the identities of such persons and retain or procure the retention of such evidence for a period of not less than seven years from the date on which any such person became so interested and shall, during the said period, promptly provide copies of such evidence to the Directors on request;

(i)

provide shareholder services including, if requested, distribution and solicitation of proxies, the coordination of annual and special shareholder meetings, acting as inspector of elections, responding to shareholder written and telephonic communications, and/or acting as transfer agent;

(j)

forthwith on receipt forward to or deposit with or to the order of the Company all monies, bills and notes received on behalf of the Company;

(k)

perform the duties of keeping the accounts of the Company and such books and records as are required by the law of the Cayman Islands, or as may from time to time be agreed in writing with the Directors, and of preparing and forwarding to shareholders of the Company all contract notes, certificates, cheques, warrants,

(l)

deal with and reply to all correspondence and other communications addressed to the Company at its registered office or at the address of the Administrator, whether in relation to the subscription, purchase, transfer or repurchase of Shares or otherwise PROVIDED THAT in the event of any dispute in connection with the issue, ownership, transfer, repurchase or otherwise of any Shares the matter shall be referred to the Directors, and the Administrator shall take such action as may be required by the Company;

(m)

despatch to shareholders of the Company and to the auditors of the Company such notices, reports, financial statements and other written material as may be requested from time to time by the Directors, and to assist as requested in the preparation thereof;

(n)

at any time during business hours to permit any duly appointed agent or representative of the Company, at the expense’ of the Company, to inspect the Register or any other documents or records in relation to the Company kept by and in the possession of the Administrator, and give such agent or representative during business hours all information, explanations and assistance as such agent or representative may reasonably require;

(o)

keep or arrange for the control of the seal and any facsimile seals of the Company and procure that any certificates for Shares (or such other evidence of such shares as the Directors may determine in accordance with the Articles) shall be issued or cancelled only in accordance with the provisions of the Articles and in the case of the issue of Shares, after receipt by or on behalf of the Company of all payments in respect of such issue;

(p)

keep safely such certificates or such other evidence of Shares as aforesaid as may be designated for safekeeping prior to issue from time to time by the Company, accept and keep certificates or such other evidence as aforesaid tendered for replacement, repurchase or transfer by the holders thereof in accordance with the provisions of the Articles and accept and keep safely such forms and certificates as may be submitted to them in connection with any such tender,

(q)

maintain and safeguard the Register and other documents in connection thereto and enter in the Register all original issues of Shares and all transfers and repurchase of such Shares, all in accordance with the provisions of the Articles and to prepare all such lists of Shareholders of the Company as may be required by the Company;

(r)

keep confidential all documents, materials and other information relating to the Company and, except as required by law, not disclose any of the aforesaid without the prior written consent of the Company, unless it shall in good faith determine that such disclosure is necessary to protect the interests of the Administrator or if

(s)

to use reasonable efforts to keep the Company informed of all matters necessary to maintain the Company in good standing under the laws of the Cayman Islands and to keep the Company informed of developments in the Cayman Islands which may affect the business of the Company.

In the execution of its duties set forth above, the Administrator shall have no discretion as to the selection of the securities or any other assets of the Company which may form part of the Company’s investment portfolio from time to time. In addition the Administrator shall not be responsible for ensuring that the Company’s investment transactions comply with the Company’s investment guidelines as described in the Offering Memorandum or as may be amended or modified by the Directors from time to time.

7.

The Administrator shall be at liberty in the performance of its duties and in the exercise of any of the powers and discretions vested in it hereunder to act by responsible officers or a responsible officer for the time being. Further, the Administrator may act or rely upon the opinion or advice of or any information obtained from any broker, lawyer, valuer or other expert and the Administrator shall not be responsible for any loss occasioned by its so acting.

8.

The Administrator may refer any legal question to the legal advisers of the Company for the time being (whose name shall from time to time be notified by the Company to the Administrator) and may authorise any such legal advisers to take the opinion of counsel on any matter or difficulty and may act on any opinion given by such legal advisers or counsel without being responsible for the correctness thereof or for any result which may follow from so doing.

9.

Subject to the overall written direction of the Directors and to any written instructions to the contrary by the Directors, the Administrator shall, on the Directors’ behalf, approve and authorise the transfer of Shares and the issue to the transferee of the appropriate share certificate or other evidence of title as the Directors may permit.